Best Illustration of Bull & Bear Markets

Here’s the best illustration we’ve ever seen of history’s bull and bear markets.  This chart shows the performance of the S&P 500 Index from 1926 through September 2017. Blue denotes past bull markets’ durations and returns (total and annualized).  Orange denotes the bear markets.  The pink vertical bars delineate recessions.

At a 100,000-ft level, this chart underscores the benefits of investing for the long-term. Two specific takeaways:

  1. There’s a lot more blue than orange meaning stocks tend to spend more time going up in value than going down.
  2. The current bull market might feel long, but by historical standards, the length and strength of this bull is not exceptional

Source: First Trust

Lowest Thanksgiving Dinner Cost in Five Years

This year’s turkey dinner will cost you 75 cents less or -1.5% compared to last year. The average cost of a classic Thanksgiving Dinner for 10 people is $49.12 according to the American Farm Bureau Federation’s survey. The mild decrease in the turkey index is somewhat at odds with the government’s Consumer Price Index for food eaten at home which increased 0.5% over the past year.

The bird soaks up the lion’s share of the budget at 46% of the meal’s cost. The 16-pound turkey came in at $22.38 this year or $1.40 per pound. The price of most ingredients was quite stable compared to last year. Biggest losers: turkey down $0.36 (-1.6%) and rolls down $0.20 (-8.1%).  Biggest gainers: cube stuffing up $0.14 (5.2%), pumpkin pie mix up $0.08 (2.6%), and whipping cream up $0.08 (4.0%).

This is the second consecutive year that the average cost of a turkey dinner decreased and it’s the lowest cost in five years.

Happy Thanksgiving!


Source: AFBF

Investing Priorities

keep-calm-and-set-your-prioritiesThe general rule of thumb for investing priorities is:

  1. Invest in your company 401(k) plan up to the match
  2. Pay off short-term, non-tax-deductible debt (e.g., credit card, car loan)
  3. Establish an emergency fund; 6-12 months of living expenses is a good guidepost
  4. Put the maximum allowable amount in a Roth IRA (if eligible)
  5. Put the maximum allowable amount in your company 401(k)
  6. Invest the remainder in taxable accounts
  7. Pay down tax-deductible debt (e.g., home mortgage)

 

Source: Vanguard

A to Z of Behavioral Bias

guessesAn A to Z list of common behavioral biases with brief descriptions, examples, causes, possible mitigations and suggested further reading courtesy the Psy-Fi Blog. Each of the links below takes you to the relevant post at Psy-Fi, so have fun and think about how they apply to your own investing habits:

 

Source:

 

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