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  • Writer's pictureDoug MacGray

Stocks Rise, Less Homes and Babies for Millennials, Sketchy Golf

Updated: May 13

April 29, 2024


U.S. ECONOMY GROWS, BUT AT A SLOWER RATE:  According to the U.S. Bureau of Economic Analysis, the economy, as measured by its Gross Domestic Product (GDP), grew at an annualized rate of 1.6% in the first three months of the year. The rate in the prior quarter was 3.4%. Although growing at a slower pace, it still grew, and much of the growth was driven by continued rises in consumer spending on services and government spending. Spending on consumer goods such as cars slowed. 



BIG TECH STOCKS LEAD RALLY:  After a significant decline last week, large U.S. tech stocks led overall stock indices higher last week. Microsoft and Alphabet (Google's parent) posted strong quarterly earnings reports. Of the stocks in the so-called Magnificent Seven, six rose. Only Facebook parent Meta failed to rise after announcing a massive investment in A.I. (too much?). Tesla, Apple, Nvidia, Amazon, Microsoft and Alphabet all rose for the week. The overall rise in stock prices came despite growing expectations that Fed rate cuts will come later, if at all this year.



LONGER-TERM PERFORMANCE:  Below are the annualized three-year and five-year numbers for these same indices.  



LESS U.S. BABIES:  According to the U.S. National Center for Health Statistics, the number of births in the U.S. in 2023 was down 2% from 2022 at about 3.6 million. The overall birth rate in the U.S. has been declining since 2007.



HOME AFFORDABILITY:  According to the National Association of Realtors, home-buying affordability fell last year to the lowest level since 1985. The median U.S. household now needs more than 40% of its income to cover payments on a median-priced home. Older Americans have significant wealth tied up in existing home equity as well as the rising stock market. Americans under age 40 are losing ground. In 1990, Americans under 40 held 15% of the overall wealth in America. That has shrunk to 9% currently. We work with a growing number of clients in the under-40 cohort. Doing the right things at that age to grow and diversify your wealth, little by little, even if you cannot afford a home today, will reap dividends down the line. Even if the current environment is discouraging, get started.


GROWTH IN WORLDWIDE FOSSIL FUEL CONSUMPTION:  From 1997, the year of the Kyoto accords, the world has reduced its relative reliance on fossil fuels. Nearly 86% of the world's energy was created by fossil fuels in 1997, and that has moved down to 82%. However, the world is currently consuming about 55% more in total fossil fuels per year than it did in 1997. China currently emits more greenhouse gasses from fossil fuels than the rest of the world combined at 27%. China, India, Indonesia and Brazil account for about 40% of emissions. The U.S. and European Union countries account for about 16%.


ROTH 401(k) CONTRIBUTIONS:  Eligibility to contribute to a Roth IRA is subject to an income limitation. A single taxpayer with modified, adjusted gross income of greater than $161,000 is not eligible to contribute. If you are married filing jointly, that limit is $240,000. A growing number of 401(k) plans offer a Roth option where you can designate some or all your contributions to be in a Roth 401(k). There is no income limitation for such contributions.   


HOW MUCH DOES YOUR ADVISOR CHARGE?:  AdvisorHQ recently published its findings on how much U.S. advisors charge when managing portfolios. Below are their findings. If you are using a financial advisor, how does your fee measure up? (Hint:  If you are one of our clients, you are paying less.)

Investment Amounts

Average Advisor Fees (%)

$50,000

1.18%

$100,000

1.12%

$150,000

1.09%

$250,000

1.07%

$500,000

1.05%

$1,000,000

1.02%

$1,500,000

0.94%

$2,000,000

0.91%

$2,500,000

0.88%

$5,000,000

0.84%

$7,500,000

0.77%

$10,000,000

0.69%

$20,000,000

0.65%

$30,000,000

0.59%

GO ARMY! GO NAVY!:  My two sons and I had the great privilege to golf at the Army Navy Country Club in Fairfax, Virginia last week. It was a beautiful day (Friday), and the course is in great shape. Although the golf was sketchy, we had a wonderful time.



Have a great week!


Our mission is to help you see the objective, find the path, and navigate past the obstacles to a more prosperous future.


Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545



"If it's not right, don't do it.  If it's not true, don't say it."  Marcus Aurelius


"Unless you speak intelligible words with your tongue, how will anyone know what you are saying?  You will just be speaking into the air."  I Corinthians 14:9 (NIV)


SOURCES:


(c) 2024 A.D., Stonecrop Wealth Advisors, LLC, All Rights Reserved


*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.


Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.

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