2008 Charts of the Week
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- Investment Resolutions for 2009
- MarketView Chart of the Week, posted December 26, 2008
- It's a popular time of the year to start thinking about New Year's resolutions. Along with the other goals you set for yourself in 2009, it's important to think about your financial well-being and retirement. Here at ICMA-RC, we offer you our top ideas for 2009 resolutions:
- Mutual Fund Total Net Assets
- MarketView Chart of the Week, posted December 19, 2008
- According to the Investment Company Institute ("ICI") the total net assets of mutual funds have declined 22% between October 31, 2007 and October 31, 2008. The two pie charts above show the total net assets of mutual funds on the aforementioned days, broken out by asset class. The charts illustrate that not all mutual fund asset classes were affected by the change in value the same way. Equity mutual funds have changed the most with a decline of over $3 trillion in absolute terms. The effect of this decline is that the share of equity mutual funds has declined from 62% to 47% of total net assets. Bond's share of the total assets invested in mutual funds has increased from 14% to 16% of total net assets and the share of money market funds has increased from 24% to 37% of total net assets. These changes were caused by a combination of cash flows and asset depreciation/appreciation.
- S&P 500 Dividend Yield versus 10 Year Treasury Yield*
- MarketView Chart of the Week, posted December 12, 2008
- The 10 year U.S. Treasury yield has been greater than the S&P 500 Index dividend yield since 1958. However, in November 2008 the roles reversed when the S&P 500 yielded more than 10 year Treasuries. The chart above compares these yields from November 1993 to November 2008. Why do stocks, as represented by the S&P 500 Index, now yield more than bonds, as represented by the U.S. 10 Year Treasury?
- The True Cost of The Twelve Days of Christmas
(Including Repetitions) - MarketView Chart of the Week, posted December 05, 2008
- For twenty-four years, PNC Wealth Management ("PNC") has charted the cost of the goods and services given as gifts in the classic "Twelve Days of Christmas" holiday song. This year it would cost $86,609 to give "that special someone" all of the gifts, including the repeats, as detailed in the verses of the song. This is an increase of almost 11% from the total price tag in 2007.
- Investor Returns vs. Category Returns Morningstar Large-Cap Growth
(Period ending 10/31/2008) - MarketView Chart of the Week, posted November 28, 2008
- Mutual funds with attractive past performance tend to gather more assets than funds with less attractive past performance. Investors may be disappointed when they buy today's "hot" fund based on past performance that does not continue in the future - sometimes called "performance chasing". Timing the market successfully requires investors to predict market movements. Unfortunately, few if any, can reliably predict the future and market timing failures tend to detract from performance.
- Rising U.S. Dollar and Falling U.S. Exports
- MarketView Chart of the Week, posted November 21, 2008
- As the chart above illustrates, U.S. Exports have declined and the U.S. Dollar has increased over the last three months. Among the many factors causing a decline in U.S. Exports are the global economic slowdown, the recently settled Boeing strike, and the rise in the U.S. Dollar. The U.S. Dollar has been boosted by investors selling international stocks and/or bonds and repatriating (buying) U.S. Dollars. Also, the U.S. Dollar has benefited from international investors buying U.S. Dollars in the hope that the U.S. will be better able to weather the global slump than other countries.
- S&P 500 Earnings Per Share: Operating vs. Reported
- MarketView Chart of the Week, posted November 14, 2008
- The portion of total earnings allocated to each share of common stock is an important indicator of a company's earning power or profitability. This is commonly referred to as Earnings per Share ("EPS"). EPS can be calculated several ways, two of which are: Reported Earnings per Share ("Reported EPS") and Operating Earnings per Share ("Operating EPS"). Operating EPS excludes one-time costs, or costs that are not related to the company's core business. Investors and analysts use Operating EPS to: (1) smooth the affects of one-time charges on company earnings and (2) gauge the health of a company's core business.
- U.S. Home Sales
- MarketView Chart of the Week, posted November 7, 2008
- The U.S. Census Bureau and the National Association of Realtors recently released figures on new and existing home sales. The figures illustrate what is an oddly bifurcated housing market. Home Sales have historically moved in similar directions as most people that buy a new home have to sell an existing home. Recently, the sales of existing homes increased as those of new homes have decreased. The chart above illustrates this trend by comparing existing home sales and new home sales over the last year. The sales of existing homes are up 1.37% from September 2007, while sales of new homes are down 33% from September of 2007.
- U.S. Treasury Yield Curve
- MarketView Chart of the Week, posted October 31, 2008
- The U.S. Treasury yield curve plots the relationship between interest rates and bonds' maturity dates. The graph above compares the yield curve for U.S. Treasury debt on October 28, 2008 with the yield curve on October 29, 2007.
- AAA National Average Gas Prices
- MarketView Chart of the Week, posted October 24, 2008
- According to the American Automobile Association ("AAA"), the national average price for regular gasoline has declined 5.25% on a year-to-date basis. From its recent peak of $4.11 on July 17, 2008 to $2.89 on October 20, 2008, the price has dropped 30%. Factors influencing the falling price of gasoline are decreasing crude oil prices, revived gulf coast refinery production, and lower demand for gasoline. The long-term price of gasoline is uncertain as the decrease in gasoline prices may spur demand.
- Top Ten Countries in the MSCI EAFE Index
- MarketView Chart of the Week, posted October 17, 2008
- The Morgan Stanley Capital International ("MSCI") Europe, Australasia, and the Far East Index ("EAFE") is a benchmark used to measure non-U.S. developed country equity stock market performance. The bar chart above shows the performance in U.S. Dollars of the top 10 countries by weighting in the index as of September 30, 2008, with Japan having the highest weighting listed first and Sweden having the lowest weighting listed last. Also included is the gross return of the MSCI Emerging Markets Index, an index that measures the equity stock market performance of 25 emerging market countries, which are not included in the EAFE index.
- Global Interest Rates
- MarketView Chart of the Week, posted October 10, 2008
- While the U.S. Federal Reserve ("the Fed") cut the Federal Funds Target Rate in the 4th quarter of 2007 and 1st quarter of 2008, other key interest rates around the world held steady or declined only modestly over the same time period. However, on October 8, 2008, the central banks of several countries cut interest rates in an effort to increase the flow of money across the global economic system. The coordinated reduction reflects the recognition by the central banks of the intertwined nature of the global economic system.
- 3rd Quarter Market Review (as of 09/30/2008)
- MarketView Chart of the Week, posted October 3, 2008
- Generally, capital markets were down in the third quarter of 2008. Bonds, as measured by the Lehman Brothers Aggregate Bond Index, posted a negative return of -0.49% (just under one half of one percent) for the most recent quarter but the trailing 1-year return was still a positive 3.65%. U.S. equities, represented by the S&P 500 Index and the Russell 3000 Index, posted negative returns for the third quarter and for the trailing 1-year period. International equity markets, which are often benchmarked relative to the MSCI EAFE Index, also posted negative returns of -20.50% and -30.13% over the quarter and 1-year period, respectively. For the equity and bond markets September's negative returns were a significant contibutor to the quarterly declines.
- Market Volatility
- MarketView Chart of the Week, posted September 26, 2008
- Expected volatility in the stock market, as measured by the Chicago Board of Options Exchange Volatility Index ("VIX"), has risen 45% from January 1, 2008 to September 23, 2008. Over the same time period, the S&P 500 Index has dropped 16%. Between August 22, 2008 and September 23, 2008, the VIX has moved up 78%. The VIX is a commonly used measure of the market's expectation of volatility risk over the next 30-day period. A high VIX level is generally associated with a period of increased volatility and uncertainty in the market, while a lower level corresponds to less volatility and stress in the market. The S&P 500 Index consists of 500 companies representing larger capitalization stocks traded in the U.S.
- Stocks, Bonds, and a Balanced Portfolio Over Twenty Years
- MarketView Chart of the Week, posted September 19, 2008
- Returns on stocks, bonds, and other assets can go up or down unpredictably. This unpredictability is a fundamental risk of investing. Managing risk in volatile markets can be especially challenging. For many investors, over the long-term, investing in a well-diversified portfolio may allow an investor to better manage risk and to seek their return objectives.
- Average Interest Rate for U.S. 30 Year Fixed Rate Mortgage
- MarketView Chart of the Week, posted September 12, 2008
- The average U.S. interest rate for 30-year fixed mortgages has experienced a sharp decline over the last week. Mortgage rates are important because they contribute to the overall cost of home ownership and are one of many factors that possibly indicate the direction of the housing market. Lower rates usually mean good news for the housing market; while higher rates usually mean bad news.
- Ownership of Mutual Funds
- MarketView Chart of the Week, posted September 05, 2008
- An annual survey conducted by the Investment Company Institute ("ICI") found that nearly 51 million U.S. households, 44 percent of all U.S. households, owned mutual funds in 2007. This represents an estimated 88 million individual investors who hold approximately 86 percent of all mutual fund assets.
- S&P 500 Quarterly Operating Earnings
- MarketView Chart of the Week, posted August 29, 2008
- One of the factors that influence stock prices is the earnings or profits of companies. Rising earnings generally lead to higher stock prices. As such, many investors and analysts track earnings to gauge trends in earnings power and to estimate future earnings providing an indication of possible future stock prices. The above chart illustrates recent actual and estimated quarterly operating earnings of companies in the Standard & Poor's ("S&P") 500 Index. The data through the 1st quarter 2008 reflect actual results. Starting with the 2nd quarter 2008, estimates are provided. However, the 2nd quarter estimate is based on the actual reported results of 96% of companies in the index.
- S&P 500 Index Average Annual Returns by Year in the Presidential Cycle from 1932-2007
- MarketView Chart of the Week, posted August 22, 2008
- As the election cycle enters the home stretch, we thought it would be interesting to look at the average annual S&P 500 Index returns each year of a president's term. The chart above illustrates these returns from 1932 to 2007, and the third year of a presidential term appears to perform significantly better than all other years. Although it could be random, some commentators have suggested that the third year results reflect stimulus being added to the economy as Election Day approaches. In the example above the fourth year is an election year.
- Conference Board Leading Economic Indicators
- MarketView Chart of the Week, posted August 15, 2008
- The chart above represents the monthly percentage change in the index from November 2006 to June 2008 (most recent data available). June's 0.1% drop was buoyed by a jump in NY City housing permits and a positively sloped yield curve (10 yr treasury/fed funds spread). Four of the ten indicators that comprise the leading index were positive in June. The top negative contributor was M2 money supply. After five consecutive monthly decreases the index stabilized in March and April and then fell in May and June. The index now sits at its lowest level since November 2004.
- S&P 500 Price Index / Historical Trailing 12-Month Price/Earnings Ratio
- MarketView Chart of the Week, posted August 8, 2008
- Chart detailing the change in the S&P 500 Index Historical Trailing 12-Month P/E ratio and the price of the S&P 500 Index.
- Investment Returns in Retirement
- MarketView Chart of the Week, posted August 1, 2008
- Chart illustrating the hypothetical lifespan of a retirement account and the importance of investing returns after retirement.
- Value Versus Growth Monthly Returns
- MarketView Chart of the Week, posted July 25, 2008
- The chart illustrates that Value stocks, as represented by the Russell 1000 Value Index, have underperformed growth stocks, represented by the Russell 1000 Growth Index. The bars above the 0% mark represent the months that value stocks have outperformed growth stocks, while the bars below the 0% show the months that value stocks have underperformed growth stocks.
- Top Ten Countries in the MSCI EAFE Index
- MarketView Chart of the Week, posted July 18, 2008
- The Morgan Stanley Capital International (MSCI) Europe, Australasia, and the Far East (EAFE) Index is a representative benchmark used to measure developed country, international equity, stock market performance. The graph above shows the performance in U.S. Dollars of the top 10 countries by weighting in the index as of June 30, 2008, with the United Kingdom having the highest weighting, Japan having the second highest, and so forth. Also included is the gross return of the MSCI Emerging Markets Index, which measures the equity stock market performance of 25 emerging market countries.
- S&P 500 Sector Performance (as of 06/30/08)
- MarketView Chart of the Week, posted July 11, 2008
- Individual sectors of the stock market can post good and bad years for investors. A sector can outperform over an extended period and then underperform in subsequent periods. The graph above compares the performance of the S&P 500 Index to its ten underlying industry sectors for the last two 12 month periods ended June 30.
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