Broker Check

Monday Money Report

| June 12, 2023

Last week the S&P 500 entered bull territory, defined as a 20% increase from the previous market low, in this case in October of 2022.[1] Remember that a bull market is a rising market, like a bull’s horns going up when they charge, as opposed to a bear, which puts its head down to charge.

This week we’ll see fresh inflation data and a Federal Reserve Bank meeting. The market is betting that the Fed will pause its interest rate hikes for now, with the possibility of another one this summer.  The VIX, a commonly used index to gauge stock market volatility, also dropped, which is usually a good indication of a strong stock market.

 Another useful piece of information from the Fed is the average and median net worth for Americans of different ages. If middle school math was a long time ago, the median is the point at which half the people are above and half are below. A few people with very high net worths can skew an average, where we just take total net worth and divide it by the number of people in the survey.

A study by Credit Karma also found that just over half of Americans don’t know how to calculate their net worth, and about a third believe their net worth is zero or negative, meaning they owe more than they own.[2]  

The Fed data show that, Americans aged 45 to 54 have an average net worth of $833,200 but the median is $168,600. For folks 55 to 64, the average increases to $1,175,900 with a median of $212,500.2

For the older set, this means half have a net worth below $212,500, and they are closing in on retirement. Using a conservative 4% withdrawal rate would mean they could draw about $700 a month in income.  If this is you, it’s time to get serious about saving.  Taking a look at where your money goes, and increasing your automatic savings are two good steps. It’s also important to review your investments, to make sure they are allocated appropriately between stocks and bonds. It’s not too late, and sitting down with a financial planner to map out your options can make a big impact.   

Your action item this week is for homeowners.  Check the state’s real property search website to confirm you have been approved for the Homestead Tax Credit.   

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Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. 

The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investment(s) may be appropriate for you, contact the appropriate qualified professional prior to making a decision.

[1] Reuters, S&P 500, Nasdaq hit fresh 2023 highs by Sruthi Shankar, Shristi Achar A, David Carnevali 6/9/23

[2], Here’s the average net worth of Americans at every age by Chris Chlark 6/4/23