Knox Notes

Jason's thoughts and commentary on the economy and markets.

Monthly Market Insights is our monthly update in video format, please check it out below.  Knox Notes will be produced to provide commentary for economic or market events as they arrive.

11/17/2023:  A few thoughts to consider: 

• U.S. Stocks have risen sharply in 2023 with a small number of technology companies driving an ever-increasing share of stock market gains.  While the year-to-date total return for the large-cap benchmark S&P 500 as of 10/31/2023 shows this as a "good year" for equities, that is not the whole story.  The U.S. stock market has seen the median return for shares in the S&P 500 index rise merely 1.1% in 2023.  The S&P Equal Weight Index is down 2.4% year-to-date, demonstrating how the outsized performance of the Magnificent Seven - AAPL, MSFT, GOOGL, AMZN, NVDA, META, and TESLA has primarily driven the market upward.    
• The combined revenue of the four largest US companies (Apple, Microsoft, Google & Amazon) hit a record $1.45 trillion over the last 12 months. That’s larger than the GDP of all but 13 countries.
• Super Size?  Bank of America analyst Michael Hartnett coined The Magnificent Seven term (The Seven) to describe seven of America's top technology giants. The companies in the S&P 500 index are weighted by their market capitalization. Larger companies have a higher weighting and, therefore, have a greater influence on the index's price. The Seven companies are worth about $10.4 trillion in combined market capitalization, making up about 27.7% of the S&P 500's total $37.7 trillion in total market capitalization.   In other words, 7 companies out of the 500 in the S&P 500 represent about 28% of the market capitalization.

• The influence of The Seven goes both ways. If those tech giants suffer a substantial downdraft, it could drag the entire S&P 500 Index down. The stellar performance of The Seven has also raised the stakes in future earnings reports and more importantly, valuations. The average forward price-to-earnings ratios in The Seven is about 33.5, compared to the S&P 500’s average P/E of 18.92.

• Treasury yields are at 16-year highs, providing investment competition to stocks with U.S. government bonds now offering risk-free yields of around 5% or more. Complicating the outlook is the relentless climb in interest rates and Treasury yields, which has been driven by a mix of Federal Reserve hawkishness in the face of a strong economy and worries over the U.S. fiscal picture.

• Growth and tech companies are seen as being more vulnerable to higher yields, as their typically robust projected future cash flows are valued less when investors can earn more from risk-free government bonds.

• With bonds offering attractive yields, investors have more choices and may ultimately allocate differently.  The reallocation of funds going forward suggests lower returns and more difficulty for The Seven to maintain their leadership, which leads to the benefits of a properly diversified portfolio.  One of the most important characteristics of any investment portfolio is its diversity. Portfolio diversification helps offset exposure in any single position, and helps investors protect themselves against wide swings in key sectors. By spreading your investments across different assets and sectors, you minimize the effect of a specific investment not working out. Diversification allows you to take advantage of different trends and opportunities across asset classes, geographic regions and individual investments.

• If you are concerned about your portfolio,  Let's talk.     I recommend completing our Free Portfolio Risk Analysis, then we talk to help ensure your investments match your true risk tolerance.
• If you don't want to be like Abe, consider our Plan Well financial planning process.  It's like GPS for your financial future.
• “Last year, I had a great joke about inflation. But it’s hardly worth it now.”-Comedian Amos Gill
  
• With the constant headlines about "Market Volatility", "Recession or No Recession",  or "Rising Interest Rates", it may cause one to be worried about their financial future.  Market volatility constantly occurs and the economy constantly evolves.  Market downturns, even severe ones, and changing rate environments are an inevitable part of investing.  Our Financial Planning process assumes market volatility and changing environments will happen over time.  A thorough financial plan may help you stay on course to meet your goals.  If you have a plan, let's revisit it.  If you haven't used our planning services, let's take a look to see if you are on track to meet your desired financial destination.  Plan Well. Invest Efficiently. Relax.  That is my best advice.
  

If you are concerned about the markets and your portfolio, Let's talk.   If you are curious about the opportunities available in the market, Let's talk.

Jason Knox, AIF®, CRC®

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market.  The Dow Jones Industrial Average (DJIA) is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets.  Investors cannot invest directly in an index.  Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.

The information provided is not intended to be a complete analysis of every material fact with respect to economic or market indicators and has been presented for educational purposes only. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Nothing contained herein should be construed as a recommendation to buy or sell any securities. While there is no assurance that a diversified portfolio will produce better returns than an undiversified portfolio, and it does not assure against market loss, a diversified portfolio may reduce a portfolio’s volatility and potential loss. Government bonds are guaranteed by the U.S. Government, and if held to maturity, offer a fixed rate of return and fixed principal amount. If not held to maturity, principal will fluctuate and may be worth more or less. Guarantee only applies to the timely payment of principal and interest and does not pertain to the portfolio, mutual fund, or variable annuity holding such securities. All investing involves risk, including the risk of principal loss. Past performance is no guarantee of future results.

08/01/2023:  A few thoughts to consider: 

• The Federal Reserve raised it's interest rate benchmark to 5.25-5.50%, the 11th increase since 2022 and the highest level in 22 years.  
• The US national debt is north of $32 trillion, or about $97,458 per person.   A trillion is 1 with 12 zeros.  A trillion seconds is 31,709.8 years. 
• Alternatives investments are increasingly becoming a part of a diversified portfolio, here is an explanation of how their roles may vary.
• Gross domestic product rose at a 2.4% annualized pace in the second quarter, beating the 2% estimate.   
• 30 year fixed conventional mortgages national average is 7.20%, per bankrate.com.
• The CBO baseline economic assumptions include headline inflation (CPI) to be 2.8% in 2024-2025, and 2.1% in 2026-2027.  
• One person's efforts to be included on the Forbes Billionaire List appears to be a tale of fiction.
• On average, those who gave a number, believe they need about $1.27 million to retire comfortably.  The average respondent who shared their retirement savings had just $89,300 in the bank, their 401(k) or other accounts.  
• If you don't want to be like Abe, consider our Plan Well financial planning process.  It's like GPS for your financial future.
• Last year was a record-setting year for income tax payments. Americans paid out an estimated 14.7% of their personal income in 2022, an all-time high.  The main reason for this record-setting tax burden is that asset prices rose so much, and people sold them for big profits.  For many others, there was bracket creep as inflation caused some incomes to get bumped temporarily into higher brackets.
• With the constant headlines about "Debt Default", "Recession or No Recession", "Out of Control Inflation", or "Rising Interest Rates", it may cause one to be worried about their financial future.  Market volatility constantly occurs and the economy constantly evolves.  Market downturns, even severe ones, and changing rate environments are an inevitable part of investing.  Our Financial Planning process assumes market volatility and changing environments will happen over time.  A thorough financial plan may help you stay on course to meet your goals.  If you have a plan, let's revisit it.  If you haven't used our planning services, let's take a look to see if you are on track to meet your desired financial destination.  Plan Well. Invest Efficiently. Relax.  That is my best advice.
  

If you are concerned about the markets and your portfolio, Let's talk.   If you are curious about the opportunities available in the market, Let's talk.

Jason Knox, AIF®, CRC®

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market.  The Dow Jones Industrial Average (DJIA) is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets.  Investors cannot invest directly in an index.  Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.

07/01/2023:  A few thoughts to consider: 

• The S&P500 finally exited out of the longest bear market since 1948.  It took 248 days for the market to close up more than 20% from it most recent low.  
• How much of your portfolio may you use per year?  4%?  3%  4.7%?   A general rule of thumb likely isn't the best rule to follow, as your situation will vary from others.  Are you interested how your financial future may look?  If you don't want to be like Abe, consider our Plan Well financial planning process.  It's like GPS for your financial future.
• In 1989, when adjusted for inflation, total family wealth in the U.S. was about $38 trillion.  By 2022, that wealth had more than tripled, reaching $140 trillion.  Of the $84 trillion projected to be passed down from older Americans to millennial and Gen X heirs through 2045, $16 trillion will be transferred within the next decade. 
• Last year, Americans spent $95 billion betting on sports in legal jurisdictions.  That is more money than the amount spent on ride-sharing, coffee, or streaming.
• Eight companies (Alphabet, Amazon, Apple, Meta, Microsoft, Tesla, Netflix, and Nvidia) now make up 30% of the S&P 500’s market capitalization, up from 22% at the start of the year.
• U.S. seniors lose $28.3 billion annually as a result of financial exploitation.  The vast majority of funds stolen from older Americans are purloined by someone they know.  Friends, family members, or caregivers are responsible for the theft of $20.8 billion, or 72%.  Exploitation by strangers accounts for $8 billion, or 28%.
• As of April 2023, spending on manufacturing construction - new factories - is tracking at $189 billion annual rate, triple the average rate in the 2010 ($63 billion).  
• It's a great summer for teenagers looking for a job.  Wages for 15-19 year-olds are approaching $15.00 an hour on average, a 41% increase from January 2020.
• UPS trucks currently don't have air conditioning, but that may change.  UPS delivers about 25 million packages per day.
• About 7 out of 10 adults in the US own a grill or roaster.  
• With the constant headlines about "Debt Default", "Recession or No Recession", "Out of Control Inflation", or "Rising Interest Rates", it may cause one to be worried about their financial future.  Market volatility constantly occurs and the economy constantly evolves.  Market downturns, even severe ones, and changing rate environments are an inevitable part of investing.  Our Financial Planning process assumes market volatility and changing environments will happen over time.  A thorough financial plan may help you stay on course to meet your goals.  If you have a plan, let's revisit it.  If you haven't used our planning services, let's take a look to see if you are on track to meet your desired financial destination.  Plan Well. Invest Efficiently. Relax.  That is my best advice.
  

If you are concerned about the markets and your portfolio, Let's talk.   If you are curious about the opportunities available in the market, Let's talk.

Jason Knox, AIF®, CRC®

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market.  The Dow Jones Industrial Average (DJIA) is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets.  Investors cannot invest directly in an index.  Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.

06/01/2023:  A few thoughts to consider: 

• “And since all this loveliness can not be Heaven, I know, in my heart, it is June.” – Abba Goold Woolson
• Humanoid robots may be closer than we think, according to Figure.
• In the most recent quarter, Harley-Davidson reported credit losses of $52.6 million.  There are not enough repossession companies to handle the volume of delinquencies that motorcycle owners are driving.
• According to the latest annual survey, half of current college students say their coursework is “overly difficult.”  The survey also found that 1 in 4 students consider it a “barrier to success” if their classes have “strict attendance or participation requirements,” while 57% believed that deadlines for assignments should be made “flexible.”
• Women currently hold 41, or 8.2% of CEO positions at S&P500 companies.  
• The US debt is approaching $32trillion, or about $248,000 per taxpayer.  A $248,000 debt at 0% interest is about $827 per month for 25 years.  A $248,000 debt at 7% interest is about $1753 per month for 25 years.  A trillion is 1 followed by 12 zeros.  A trillion seconds is about 31,709.8 years.  32 trillion seconds is about 1,01,018 years.  Keep track of the US debt by visiting USdebtclock.org.
• It could be worse: with Argentina’s inflation rate hitting 109%, the government is announcing emergency measures, including raising interest rates by 600 basis points to 97%.  Not a typo, the rate is 97%.  The annual inflation rate soared above 100% last month.  
• Despite the risk of the U.S. defaulting on its debts in the next few weeks, equity traders have kept calm and carried on.  But over in the bond market, investors are sweating.  The cost of credit-default swaps, which act as insurance against a default, is higher in the U.S. than in emerging markets like Mexico and Brazil.  
• Going back to 1982, the S&P500 returned an average of 19% in the 12 months after the federal funds rate peaked.  Of course, past performance is not indicative of future results.
• 54% of Americans told Gallup they didn't have a will.  One in five Americans with investable assets of $1 million or more don't have a will.   One of the easiest estate planning tools, foregoing a will may be a very costly decision.  If you need help with your will, please contact us.
• “Long ago, when men cursed and beat the ground with sticks, it was called witchcraft.  Today it’s called golf.”  -Will Rogers
• With the constant headlines about "Debt Default", "Recession or No Recession", "Out of Control Inflation", or "Rising Interest Rates", it may cause one to be worried about their financial future.  Market volatility constantly occurs and the economy constantly evolves.  Market downturns, even severe ones, and changing rate environments are an inevitable part of investing.  Our Financial Planning process assumes market volatility and changing environments will happen over time.  A thorough financial plan may help you stay on course to meet your goals.  If you have a plan, let's revisit it.  If you haven't used our planning services, let's take a look to see if you are on track to meet your desired financial destination.  Plan Well. Invest Efficiently. Relax.  That is my best advice.
  

If you are concerned about the markets and your portfolio, Let's talk.   If you are curious about the opportunities available in the market, Let's talk.

Jason Knox, AIF®, CRC®

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market.  The Dow Jones Industrial Average (DJIA) is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets.  Investors cannot invest directly in an index.  Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.

05/01/2023:  A few thoughts to consider: 

• The March CPI report was cooler than expected with headline CPI rising by 0.1% m/m and 5.0% y/y, marking the smallest year-over-year increase since May 2021, while core CPI rose by 0.4% m/m and 5.6% y/y. Moderating food and energy prices weighed on the headline print with food at home falling by 0.3% m/m and energy declining by 3.5% m/m. Shelter inflation more than offset these declines and remained the largest contributor. However, it slowed compared to last month. Overall, this report suggests that headline CPI should fall below 4.0% y/y by June, and strengthens the argument for a Fed pause at the upcoming FOMC meeting in May.  
• April 15th, the traditional federal tax deadline was moved to 4/18/2023 because of the weekend and the District of Columbia's Emancipation Day holiday on 4/17.  In history, 4/15 was the day Lincoln died, the Titanic sank, Ray Crock started McDonald's and Babe Ruth hit his first home run.
• U.S. workers 45 and older think it will take about $1,100,000 in savings to retire in comfort.  But only 21% expect to reach even the $1 million mark, down from 24% in 2022.  Furthermore, the study showed more than half of the respondents (59%) expect to have less than $500,000 stashed away for their golden years, including 34% who expect to have less than $250,000 in savings.  Are you on track to meet your goals?  Let's talk!
• Mortgage borrowers with good credit may face higher costs through Fannie Made or Freddie Mac after 5/1/2023.  Under the new Loan-Level Price Adjustment Matrix, borrowers with credit scores above 740 will face higher fees, while those with credit scores of 679 and lower will incur lower fees.  
• Apple and Microsoft alone now account for 13.3% of the S&P 500, the highest level on record.  Not since IBM and AT&T in 1978 have two stocks made up a greater share of the benchmark.
• Foot Locker is closing about 400 stores, with Bed Bath & Beyond closing permanently.
  
• If you made $49,000 in a year, spent $62,700 in a year, and had $309,300 in debt, would you change anything?  Now multiply those numbers by 100,000,000 and you have the US Government revenue, spending and debt for the most recent year, or $4,900,000,000,000; $6,270,000,000,000; and $30,930,000,000,000 respectively.  Learn more about fiscal revenue, spending and debt at https://fiscaldata.treasury.gov/americas-finance-guide/   
• Sales of "dumb phones" are on the rise.   A modern smart cellular phone is about 120,000,000 times faster than the Apollo space program computers.  
• Are you interested on how your financial future may look?  If you don't want to be like Abe, consider our Plan Well financial planning process.  It's like GPS for your financial future.
  
• Cakeism is the wish to have or do two good things at the same time when this is impossible.  -Cambridge Dictionary
• With the constant headlines about "Recession or No Recession", "Out of Control Inflation", or "Rising Interest Rates", it may cause one to be worried about their financial future.  Market volatility constantly occurs and the economy constantly evolves.  Market downturns, even severe ones, and changing rate environments are an inevitable part of investing.  Our Financial Planning process assumes market volatility and changing environments will happen over time.  A thorough financial plan may help you stay on course to meet your goals.  If you have a plan, let's revisit it.  If you haven't used our planning services, let's take a look to see if you are on track to meet your desired financial destination.  Plan Well. Invest Efficiently. Relax.  That is my best advice.
  

If you are concerned about the markets and your portfolio, Let's talk.   If you are curious about the opportunities available in the market, Let's talk.

Jason Knox, AIF®, CRC®

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market.  The Dow Jones Industrial Average (DJIA) is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets.  Investors cannot invest directly in an index.  Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.

04/01/2023:  A few thoughts to consider: 

• The Federal Reserve raised interest rates again in March, to a 16 year high, with the rate target between 4.75% and 5.00%.  Notably, the Fed's statement did not refer to any future rate increases.  Chairman Jerome Powell said the US economy is "absolutely" seeing disinflation and projected confidence in the banking sector's health.  Guessing what the Fed may or may not do in the future is a risk. 
• Driving with only a rear view mirror presents some challenges for forward navigation.       
• Bank customers collectively pulled $98.4 billion from bank accounts for the week ended 3/15.  Data shows the money came from small banks.  Bank Deposits are now just over $17.5 trillion, representing a decline since February, 2022.   Money market funds now represent about $5.13 trillion in assets.   Our highest money market yield is presently 4.72%.  Call and we may discuss if a money market is suitable for you.
• Humanoid robots, with dexterous hands will soon be staffing warehouses and retail stores, tending to the elderly and performing household chores, will soon be reality according to a new startup.
• I spoke at a Financial Literacy class last week and we talked about currency (and other topics).  The Bureau of Engraving & Printing website has some great data about currency, including the probable explanation of why the ink is green.  The largest bill ever printed was for $100,000.  Today the largest bill in circulation is $100.  The class agreed they all like money.
• History shows that the S&P 500 index typically leads the turn in the economy (up or down) by 3 to 11 months.-Barron’s, February 24, 2023
• The Federal Railroad Administration, which has been monitoring annual train accidents across America since 1975, has recorded more than 12,500 derailments in the last decade alone. That’s equivalent to some 24 trains veering off track every single week. -Chartr, March 3, 2023
• There are more than four times as many hedge funds as there are Taco Bells.   -Financial Times, February 21, 2023
• The Crunchwrap Supreme  ranked as the favored Taco Bell item.  I enjoyed Conan O'Brien's visit to Taco Bell:  I hope we may try the O'Taco soon.
• I just read many articles about how the changes in banking "are different this time."   I am reminded of Sir John Templeton's thoughts on it's different this time.
• A U.S. homebuyer with a $2,500 monthly budget may now afford a $376,000 home today with the present average national 6.97% mortgage rate, compared with a $593,000 home that the same buyer could have purchased with the 3% rates common in 2021 for 30 year mortgages.  -bankrate.com
• Are you interested on how your financial future may look?  If you don't want to be like Abe, consider our Plan Well financial planning process.  It's like GPS for your financial future.
• Fred Astaire was great, but don’t forget that Ginger Rogers did everything he did, but backward and in high heels. -Frank and Ernest comic strip in 1982
• A special reminder about tax season:

  • The average American will pay $525,037 in taxes over their lifetime.  About $340,000 of that comes from taxes on earnings, with the rest from sales, property, and automobile taxes. -www.markzinder.com/mark-zinder-blog/

    • The first national income tax, The Revenue Tax Act 1864 imposed a flat 3% tax for any American earning more than $800 a year (about $18,000 in today’s money.) The Revenue Tax Act of 1864, which turned out to be fairly tough to collect, did withstand a Supreme Court Challenge but was repealed by Congress in 1872. 
    • The plan for more efficient national taxation bobbled around for a while in various iterations, but the 16th Amendment made it official in 1913.  In its first year, fewer than 1% of Americans paid an income tax at the rate of about 1% of income.
    • Click Here to see the 1913 Form 1040.  Click Here to see the current Form 1040.
    • The Federal Tax Code today is about 2.5 million words in length (the average book is about 100,000).  
    • In 2021, the IRS received more than 152,000,000 tax returns and issued about 103 million refunds.
    • It costs the IRS about $0.35 for each $100 of tax revenue collected.
    • Taxes provide 96% of the federal revenue.
    • About 160 million tax returns are expected to be filed in 2022.
    • The IRS provides an online account where you may access your tax records, and other personal information.
• With the constant headlines about "Recession or No Recession", "Out of Control Inflation", or "Rising Interest Rates", it may cause one to be worried about their financial future.  Market volatility constantly occurs and the economy constantly evolves.  Market downturns, even severe ones, and changing rate environments are an inevitable part of investing.  Our Financial Planning process assumes market volatility and changing environments will happen over time.  A thorough financial plan may help you stay on course to meet your goals.  If you have a plan, let's revisit it.  If you haven't used our planning services, let's take a look to see if you are on track to meet your desired financial destination.  Plan Well. Invest Efficiently. Relax.  That is my best advice.
  

If you are concerned about the markets and your portfolio, Let's talk.   If you are curious about the opportunities available in the market, Let's talk.

Jason Knox, AIF®, CRC®

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market.  The Dow Jones Industrial Average (DJIA) is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets.  Investors cannot invest directly in an index.  Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.

03/01/2023:  A few thoughts to consider: 

• Several states are raising their minimum wages this year.  The tight labor market has forced employees' wages that are much higher than the legal minimum.  Average hourly pay for nonsupervisory retail workers rose 4% in December from a year earlier, to $19.93.
• Last year’s national average babysitting rate was $22.68 an hour for one child, $25.37 an hour for two, and $27.70 an hour for three. Urban Sitter’s booking data from 15,000 U.S. families shows a staggering 21% increase in just two years.  
• Retail investors added an average of $1.51 billion per day in the US equity markets in January.  
• "The four most dangerous words in investing are, it’s different this time." — Sir John Templeton
  
• Physical store openings exceeded closings on an annual basis last year for the first time since 2016.
• The average American family spends nearly $1,900 per year on food they don't eat.  Your Personal Financial Website offers a budget tool that helps track expenses.
• “On Thursday, the state department revealed that the Chinese spy balloon the U.S. downed last weekend was capable of monitoring Americans’ electronic communications. Meanwhile, AT&T told their customers, ‘Relax, they can’t spy on you if you can’t get a signal!’” - Jimmy Fallon
• Almost 5,500 satellites orbit the planet with the potential for another 58,000 by 2030.  About 3,000 of those are no longer in service, or "dead."  
• Are you interested on how your financial future may look?  If you don't want to be like Abe, consider our Plan Well financial planning process.  It's like GPS for your financial future.
• With the constant headlines about "Recession or No Recession", "Out of Control Inflation", or "Rising Interest Rates", it may cause one to be worried about their financial future.  Market volatility constantly occurs and the economy constantly evolves.  Market downturns, even severe ones, and changing rate environments are an inevitable part of investing.  Our Financial Planning process assumes market volatility and changing environments will happen over time.  A thorough financial plan may help you stay on course to meet your goals.  If you have a plan, let's revisit it.  If you haven't used our planning services, let's take a look to see if you are on track to meet your desired financial destination.  Plan Well. Invest Efficiently. Relax.  That is my best advice.
  

If you are concerned about the markets and your portfolio, Let's talk.   If you are curious about the opportunities available in the market, Let's talk.

Jason Knox, AIF®, CRC®

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market.  The Dow Jones Industrial Average (DJIA) is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets.  Investors cannot invest directly in an index.  Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.

02/01/2023:  A few thoughts to consider: 

• Are you interested on how your financial future may look?    If you don't want to be like Abe, consider our Plan Well financial planning process.  It's like GPS for your financial future.
• Equity markets showed improvement in January/
• A new AI chatbot tool known as ChatGPT recently passed law exams in four courses at the University of Minnesota and another exam at the University of Pennsylvania's School of Business.
• The Federal Reserve's most recent report on costs of consumer credit showed average interest rates on bank-issued credit cards touching 19.1% in the fourth quarter, a record high.
• From the end of 2019 to the end of December, 2022, the S&P500 was up about 18.7%.  The last time the S&P 500 index produced negative returns during the 12 months after a midterm election was 1939.  Keep a long term perspective.
• "In investing, what is comfortable is rarely profitable." — Robert Arnott
• Money market accounts held a record $4.814 trillion the week ending 01/04/2023.
• Millions of Americans may be in for a "refund surprise" when they file their 2022 taxes.   Many of the pandemic benefits have expired.  The Child Tax credit returns to the pre pandemic amount of $2,000, down from $3,600 for children under 6 and $3,000 for children age 6-17.  The Child and Dependent Care also reduces from $8,000 back to $6,000.   The Earned Income Tax Credit decreases from $1,500 to $560.  Taxpayers who file with the standard deduction were eligible for up to $600 in additional charitable deductions, which goes away for the 2022 tax year. 
• Tax returns may be filed starting on 1/23/2023 and the last day to file without extension in April 18, 2023.
• Contribution limits for retirement plans have increased significantly for 2023.  Visit https://www.knoxfinancialservices.com//limits for complete details.
• "The four most dangerous words in investing are, it’s different this time." — Sir John Templeton
• The U.S. population grew by 0.38% between July 2012 and July 222, slightly above the historic low of 0.16% during the first full year of the pandemic.  Deaths exceeded births in 24 states.  
• "It's hard to injure yourself badly jumping out of a basement window." -Dr. David Kelly, JPMorgan  
• Amazon is discontinuing it's charitable program, AmazonSmile by 2/20/2023.  Launched in 2013, AmazonSmile donated 0.5% of eligible purchases to a charity of a customer's choice, giving about $449 million.  Over 1 million charities were named.  
• With the constant headlines about "Recession or No Recession", "Out of Control Inflation", or "Rising Interest Rates", it may cause one to be worried about their financial future.  Market volatility constantly occurs and the economy constantly evolves.  Market downturns, even severe ones, and changing rate environments are an inevitable part of investing.  Our Financial Planning process assumes market volatility and changing environments will happen over time.  A thorough financial plan may help you stay on course to meet your goals.  If you have a plan, let's revisit it.  If you haven't used our planning services, let's take a look to see if you are on track to meet your desired financial destination.  Plan Well. Invest Efficiently. Relax.  That is my best advice.

If you are concerned about the markets and your portfolio, Let's talk.   If you are curious about the opportunities available in the market, Let's talk.

Jason Knox, AIF®, CRC®

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market.  The Dow Jones Industrial Average (DJIA) is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets.  Investors cannot invest directly in an index.  Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.

01/03/2023:  May we say "Auld Lang Syne" to 2022 and look forward to 2023.   A few thoughts to consider as we enter the new year: 

• The economy and markets of 2022 may be best described as:  inflation.     
• Social Security payments will increase by 8.7% in 2023.  Social Security recipients can expect an 8.7% cost-of-living increase in 2023, CBS News reported.  A monthly payment of $1,681 in 2022 will increase roughly $140 or so, to $1,827 each month, and combined with still-dropping gas prices, it offers a measure of immediate financial relief amid ongoing inflation. 
• Stocks began 2022 on a sour note, ending January and February in the red. Unfortunately,  things didn't get much better for the remainder of the year. Following a bull market that lasted more than 10 years, stocks experienced a sizeable pullback. The benchmark indexes listed here declined in each of the first three quarters of 2022. The Nasdaq lost more than 33.0% on the year, negatively impacted by the Federal Reserve's aggressive, inflation-fighting policy, which hampered tech and growth stocks.  While Wall Street showed some resilience in the fourth quarter, stocks suffered their worst year since the financial crisis of 2008.
• The U.S. economy saw a slowdown in growth for much of 2022. Gross domestic product contracted in the first two quarters of the year after advancing at an annualized rate of 5.9% in 2021. But GDP rebounded in the third quarter, climbing 3.2%. Although inflation has cut into consumers' purchasing power, they have continued to spend during difficult economic times, supported by rising wages, job growth, and access to savings accumulated during the pandemic.
• Job growth remained strong in November with the addition of 263,000 new jobs after adding 284,000 (revised) new jobs in October. Monthly job growth has averaged 392,000 thus far in 2022, compared with 562,000 per month in 2021. Despite federal interest-rate hikes aimed at slowing the economy and inflation, there is little evidence that the supply of labor is peaking.
• United Airlines CEO Scott Kirby said, “If I didn’t watch CNBC in the morning…the word ‘recession’ wouldn’t be in my vocabulary.” He made that statement while being interviewed on CNBC.-Morning Brew, December 7, 2022
• The invention of the transistor occurred 75 years ago this week and today it is considered the most manufactured item in human history.-Marketplace, December 12, 2022
• "It's hard to injure yourself badly jumping out of a basement window." -Dr. David Kelly, JPMorgan
• Looking ahead:  The battle against rising inflation will likely continue to dominate much of the economy and stock market in 2023. If and when the Federal Reserve scales back its aggressive interest-rate hikes, investors might be more inclined to return to equities, particularly tech shares.  However, the war in Ukraine and new COVID cases will also have an impact. If nothing else, 2023 should be very interesting.
• Click here to see our complete 2022 Annual Market Review.
• Are you interested on how your financial future may look?   If you don't want to be like Abe, consider our Plan Well financial planning process.  It's like GPS for your financial future.

With the constant headlines about "Recession or No Recession", "Out of Control Inflation", or "Rising Interest Rates", it may cause one to be worried about their financial future.  Market volatility constantly occurs and the economy constantly evolves.  Market downturns, even severe ones, and changing rate environments are an inevitable part of investing.  Our Financial Planning process assumes market volatility and changing environments will happen over time.  A thorough financial plan may help you stay on course to meet your goals.  If you have a plan, let's revisit it.  If you haven't used our planning services, let's take a look to see if you are on track to meet your desired financial destination.  Plan Well. Invest Efficiently. Relax.  That is my best advice.

If you are concerned about the markets and your portfolio, Let's talk.   If you are curious about the opportunities available in the market, Let's talk.

Jason Knox, AIF®, CRC®

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market.  The Dow Jones Industrial Average (DJIA) is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets.  Investors cannot invest directly in an index.  Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.

12/22/2022:  From all of us at Knox Financial Services, we wish you and your families the most joyous holiday season. May your holiday be blessed with the love of and warmth of family and friends.  We sincerely appreciate working with you.   

For the double edition of Notes this month, I'll share some thoughts to consider, that aren't focused on finance:

• Stephen Hawking, the theoretical physicist, cosmologist, and author, once threw a Champagne party for time travelers.  He announced the party the day after it happened and then said no one showed up.  I theorize there were no hangovers. 
• An X-ray for your dog.   A small dog was accidentally sent through the X-ray screening at Dane County Regional Airport in Wisconsin, according to the TSA.   It is always good to check your carry-on bags for pets.   Recently, a gun was found inside a raw chicken, inside a checked bag.   The TSA tweeted: “We hate to beak it to you here, but stuffing a firearm in your holiday bird for travel is just a baste of time,” the agency wrote on Instagram Monday alongside photos of the offending poultry.  I remember when you bought an airplane ticket, that was it - everything was included - no extra bag charges, seat upgrade fees, or other costs.  Of course, I didn't bring my dog (we miss you Tucker), an uncooked chicken, or a gun.    
• Text messaging started on 12/03/1992.  I suspect the "your warranty is about to expire" text came just a few days later.
• The Simpsons premiered on 12/17/1989.   "Facts are meaningless.  You could use facts to prove anything that's even remotely true." -Homer Simpson - D'oh!
• "Americans commercialize everything.  Look at what we did to Christmas.  Christmas is Jesus' birthday.  Now I don't know Jesus, but from what I read, he was the least materialistic person to walk the earth.  No bling on Jesus.  We turned his birthday into the most commercial day of the year, including a Jesus birthday season.  And then, at the end of it, we have some economist come on TV and say what a horrible Jesus birthday season we had."  -Chris Rock 
• Hallmark holiday movies only take about 2 weeks on average to film, significantly less time than other movies which may take months to complete.  I will attest that watching a 2 hour Hallmark movie with Amber seems like 2 weeks to me.  The things we do for love.

As we near the end of an interesting 2022, I pause more often to think more about the blessings in our lives.  Amber, Steffani, Barney, Ally and I sincerely appreciate working with all of you.  We wish you a blessed holiday season and a wonderful new year.   Look Forward to 2023!

Jason Knox, AIF®, CRC®

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market.  The Dow Jones Industrial Average (DJIA) is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets.  Investors cannot invest directly in an index.  Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.

12/01/2022:  While enjoying the late fall weather, I will share some thoughts to consider:

• The Federal Reserve November meetings suggest that the pace of interest increases may slow.  
• U.S. manufacturing jobs increased by over 500,000 in the last 12 months, with about 13 million employed in U.S. factories.  The manufacturing sector still has demand for over 800,000 openings.
• The IRS released notice about Form 1099-K, which applies to payments from third-party vendors, like Venmo or PayPal for transactions such as part-time work, side jobs, or selling goods, commonly online, for aggregate amounts over $600.   Congress lowered this limit to $600 from $20,000 as part of the American rescue Plan Act of 2021.   If you receive form 1099-K, talk with your tax professional.
• Since 1950, the average return for the S&P 500 in the 12 months after a midterm election is 15%, surprisingly with no down years. Stocks performed better in the six months following the election than in the six months preceding it 17 out of 19 times.  And a split government has historically produced a roughly 13% annual return.  As always, past performance of the market is not indicative of future results. 
• The Houston Astros beat the Philadelphia Phillies to win the World Series.   Philly-based teams won in 1929, 1930, 1980, and 2008, which coincided with market downturns - baseball teams wins and the capital markets are likely uncorrelated.  
• Thanksgiving sales overcame inflation gloom, hitting a record $5.29 billion.  Mobile shopping drove 55% of sales.  Black Friday sales were $9.12 billion, also up from prior years.  
• According to StudyFind, average Americans spent about $251 on their Thanksgiving feast this year.   Millennials spent about $299, while Gen Z spent $204, Gen X at $195, and Baby Boomers about $140.  
• Lipstick sales have grown 37% through October this year compared with a year earlier.  The "Lipstick Index" often indicates that while consumers cut back on other discretionary items, they may continue to purchase small luxuries such as lipstick.  
• From 1937 to 1940, the Social Security Administration made lump-sum payments.  Ernest Ackerman retired after participating in Social Security for one day, and received a lump-sum payment of $0.17.  The average lump-sum payment during this period was $58.06, with the smallest being $0.05.   Click here for a history of Social Security.
• “I love money.  I love everything about it.  I bought some pretty good stuff.  Got me a $300 pair of socks.  Got a fur sink.  An electric dog polisher.  A gasoline powered turtleneck sweater.  And, of course, I bought some dumb stuff, too.”  ― Steve Martin
• As we near the end of an interesting 2022, I pause more often to think more about the blessings in our lives.  Amber, Steffani, Barney, Ally and I sincerely appreciate working with all of you.  We wish you a blessed holiday season and a wonderful new year.   Look Forward to 2023!
• With the constant headlines about "Recession or No Recession", "Out of Control Inflation", or "Rising Interest Rates", it may cause one to be worried about their financial future.  Market volatility constantly occurs and the economy constantly evolves.  Market downturns, even severe ones, and changing rate environments are an inevitable part of investing.  Our Financial Planning process assumes market volatility and changing environments will happen over time.  A thorough financial plan may help you stay on course to meet your goals.  If you have a plan, let's revisit it.  If you haven't used our planning services, let's take a look to see if you are on track to meet your desired financial destination.  Plan Well. Invest Efficiently. Relax.  That is my best advice.

If you are concerned about the markets and your portfolio, Let's talk.   If you are curious about the opportunities available in the market, Let's talk.

Jason Knox, AIF®, CRC®

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market.  The Dow Jones Industrial Average (DJIA) is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets.  Investors cannot invest directly in an index.  Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.

11/01/2022:  Enjoying the beautiful fall weather, I will share some thoughts to consider:

• October began with the highest two-day gain in the equity markets we have seen in the prior two years.  Markets surged upward the 4th week of the month as well, with the Dow having its best month since 1976. 
• For September, payrolls rose 263,000, down from 315,000 in August.  Unemployment was reported at 3.5%.   While job creation is generally considered good news, the markets reacted negatively in early October, as the jobs reports were slightly below estimates.  
• Regardless of the denomination, with U.S. currency, there are 454 bills in one pound.  Visit uscurrency.gov to learn more about our currency.
• The U.S. national debt crossed $30 trillion on 02/01/2022, and $31 trillion on 10/04/2022.  The U.S. Debt Clock maintains a running track of multiple public debts.  

• Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 8.7 percent in 2023, the Social Security Administration announced.  Increased payments will begin on 12/30/2022.  Social Security and SSI beneficiaries are normally notified by mail in December about their new benefit amount.

• The maximum amount of earnings subject to the Social Security tax (taxable minimum) will increase from $147,000 to $160,200 for 2023.

• Americans spend more on lottery tickets every year than on cigarettes, coffee, or smartphones.
• A recent survey shows that people often underestimate the costs of their monthly subscriptions, like phone, internet, streaming, and digital subscriptions.  The average estimate was $86, while the actual monthly cost was $219.   Your Personal Financial Website has tools to help keep track of your spending.
• 401(k) plans account values are about $7.7 trillion. 
• Illumina's new DNA sequencing machine may sequence a human genome for less than $240.  That used to cost $100 million just 21 years ago.
  

• Over 160 million Americans are predicted to spend $2.6 billion on candy, $3.2 billion on costumes and $2.7 billion on decorations for Halloween.  49% find candy corn tasty, 23% find it gross, and 21% don't like it, but admit that it is part of Halloween.
• One review of 22 studies found that the difference in longevity at the point of retirement between someone who says they are in poor health versus someone who says they are in excellent health is about five years.  
  
• The population of industrial robots in the world has reached about 3.5 million.   
• "It's hard to injure yourself badly jumping out of a basement window." -Dr. David Kelly, JPMorgan.
• As we enter the holiday season, I pause more often to think about the blessings in our lives.   I wish all of you and your families a Happy Thanksgiving.
• With the constant headlines about "Recession or No Recession", "Out of Control Inflation", or "Rising Interest Rates", it may cause one to be worried about their financial future.  Market volatility constantly occurs and the economy constantly evolves.  Market downturns, even severe ones, and changing rate environments are an inevitable part of investing.  Our Financial Planning process assumes market volatility and changing environments will happen over time.  A thorough financial plan may help you stay on course to meet your goals.  If you have a plan, let's revisit it.  If you haven't used our planning services, let's take a look to see if you are on track to meet your desired financial destination.  Plan Well. Invest Efficiently. Relax.  That is my best advice.
  

If you are concerned about the markets and your portfolio, Let's talk.   If you are curious about the opportunities available in the market, Let's talk.

Jason Knox, AIF®, CRC®

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market.  The Dow Jones Industrial Average (DJIA) is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets.  Investors cannot invest directly in an index.  Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.

Knox Notes is a collection of information gathered from multiple sources and contains opinions from Jason Knox, AIF®, CRC®, and is not intended as specific investment or financial planning advice.  Your situation may differ.  Contact your attorney, accountant, tax advisor or financial professional regarding your specific situation.