Happy Retirement Planning Week! In honor of the celebration, it’s time to take stock of where Americans stand. According to the 2017 Employee Benefit Research Institute (EBRI) Retirement Confidence Survey, we still have some work to do:
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The improving economy, a tighter labor market and rising consumer confidence are fueling the continued housing market recovery. In January, existing home sales jumped to their highest level since early 2007 and nationally, prices rose to a 31-month nominal high, with prices up 5.9 percent from a year ago. The National home price index is up nearly 38 percent from the post-bubble low set in December 2011. (Don’t get too excited-when factoring in the rate of inflation, prices are still at April 2004 levels.)
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There have been four stock market corrections (a decline of 10 percent or more from the recent high) during the current eight-year long bull market. According to research dating back to 1900, corrections have occurred about once a year on average, and lasted on average about 115 days. Over the past thirty years or so, the S&P 500 has seen 21 corrections. Talk is increasing that correction number five of the second longest bull market on record, is just around the corner. If you are a long-term investor, you should be rooting for a correction. After all, wouldn’t you rather buy stocks at a 10 percent discount to where they are today?
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After suffering a stinging defeat on healthcare, what’s next for the Trump economic agenda? The first lesson for the new President is that despite holding a majority in both the House and the Senate, lawmaking is complicated and difficult. That said, because they failed to clear their first legislative hurdle, will Trump and Speaker Ryan be able to enact the next item on their to do list, tax reform, not to mention infrastructure spending?
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"The simple message is the economy is doing well," Federal Reserve Board Chair Janet Yellen said in the press conference that followed the central bank’s third quarter-point rate hike in 15 months. She went on to say "We have confidence in the robustness of the economy and its resilience to shocks." You might be wondering what exactly “well” means. Let’s start with the long-term economic growth rate, which has averaged about three percent annually for the 50 years from 1966 through 2016.
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