Peek of the Week
May 4, 2015
DOES MONEY MAKE YOU HAPPIER?
 |
DOES MONEY MAKE YOU HAPPIER?
|
The Markets
Stock markets
tipped into the red last week.
Major indices
in the United States and elsewhere dipped lower as U.S. economic growth came in
below expectations. The Commerce Department reported gross domestic product
(GDP) grew by 0.2 percent annualized during the first quarter. Growth was
hindered by the strength of the U.S. dollar, which made exports less attractive,
and cold winter weather. U.S. market performance also reflected last week’s
earnings news for technology stocks which wasn’t quite as rosy as the previous
week’s.
Markets
across much of Asia lost value last week, too. China was a notable exception.
The Shanghai Composite gained more than 1 percent during the period. It was a
truly remarkable performance as China is in the midst of its worst earnings
season since the global financial crisis. Bloomberg
reported:
“…2014
profits missed estimates by the most in six years and analysts cut their
outlooks at the fastest pace since 2009...Yet, it’s mainland individuals who
account for at least 80 percent of trades, and they’re still buying shares at a
record pace in anticipation of further government stimulus. That helps explain
why the highest price-to-earnings ratios in five years have failed to slow the
Shanghai Composite’s advance.”
China’s
economic growth has also slowed. During the first quarter, its GDP grew by 7
percent. That’s a much better showing than the United States but not so great when
benchmarked against previous growth in China. In fact, it was China’s slowest
growth since 2009.
The Economist commented, “…the question for China
is not whether growth will rebound to anything like the double-digit pace of
the past. Instead, it is whether its slowdown will be a gradual descent – a
little bumpy at times but free from crisis – or a sudden, dangerous lurch
lower.”
Data as of 5/1/15
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500 (Domestic Stocks)
|
-0.4%
|
2.4%
|
11.9%
|
14.5%
|
11.9%
|
6.1%
|
Dow Jones Global ex-U.S.
|
-0.9
|
7.8
|
0.5
|
6.4
|
3.8
|
3.8
|
10-year Treasury Note (Yield Only)
|
2.1
|
NA
|
2.6
|
2.0
|
3.7
|
4.2
|
Gold (per ounce)
|
-0.6
|
-1.9
|
-8.0
|
-10.9
|
-0.2
|
10.6
|
Bloomberg Commodity Index
|
1.8
|
-0.9
|
-24.1
|
-9.9
|
-5.2
|
-3.8
|
DJ Equity All REIT Total Return
Index
|
-3.0
|
-0.8
|
13.0
|
10.9
|
12.0
|
8.5
|
S&P 500, Dow Jones Global
ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends
(gold does not pay a dividend) and the three-, five-, and 10-year returns are
annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends
and the three-, five-, and 10-year returns are annualized; and the 10-year
Treasury Note is simply the yield at the close of the day on each of the
historical time periods.
Sources: Yahoo! Finance,
Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no
guarantee of future results. Indices are unmanaged and cannot be invested into
directly. N/A means not applicable.
when do you have a duchenne smile? According to Martin Seligman, professor of psychology
at the University of Pennsylvania and author of Authentic Happiness, the Duchenne is a genuine smile, typically
accompanied by eye crinkling, and it demonstrates real happiness. The
alternative, the Pan American, is a counterfeit smile. It may be the one we employ
in exasperating customer service situations. The point is: When we are truly
happy, our smiles are genuine.
Researchers
in the field of positive psychology and happiness have spent quite a bit of
time trying to determine whether money makes us happy. There has been no decisive
answer to date, although some studies’ findings offer abundant food for
thought.
·
More money means greater happiness. “…rich individuals are more satisfied with their
lives than poorer individuals, and we find that richer countries have
significantly higher levels of life satisfaction.”
--Betsey Stevenson and Justin Wolfers of
University of Pennsylvania
·
A dearth of money can cause emotional pain. “More money does not necessarily buy more happiness,
but less money is associated with emotional pain.”
--Daniel Kahneman and Angus Deaton of
Princeton University
·
Experience offers a better value for your dollar. “People generally believe that making money and
obtaining material possessions will improve their lives... However, materialism
has repeatedly been shown to be detrimental to well-being…Investing
discretionary resources into life experiences, rather than buying material
possessions, makes people happier.”
--Ryan Howell et al, San Francisco State
and University of Southern California
·
Anticipation makes experience all the sweeter. “Four studies demonstrate that people derive more
happiness from the anticipation of experiential purchases and that waiting for
an experience tends to be more pleasurable and exciting than waiting to receive
a material good.”
--Amit Kumar et al, Cornell University
Best regards,
Leif M. Hagen
Leif
M. Hagen, CLU, ChFC
LP Financial Advisor
P.S. Please feel free to forward this commentary
to family, friends, or colleagues. If you would like us to add them to our
list, please reply to this e-mail with their e-mail address and we will ask for
their permission to be added.
P.S.S. Also, please remind your
friends and family members becoming Medicare eligible that we offer Medicare insurance
and Part D options with NO CHARGE to work with me as their agent.
Securities
offered through LPL Financial Inc., Member FINRA/SIPC.
* This newsletter was
prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with
the named broker/dealer.
* The Standard & Poor's
500 (S&P 500) is an unmanaged group of securities considered to be
representative of the stock market in general. You cannot invest directly in
this index.
* The Standard & Poor’s
500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect
fees, expenses, or sales charges. Index performance is not indicative of the
performance of any investment.
* The 10-year Treasury Note
represents debt owed by the United States Treasury to the public. Since the
U.S. Government is seen as a risk-free borrower, investors use the 10-year
Treasury Note as a benchmark for the long-term bond market.
* Gold represents the
afternoon gold price as reported by the London Bullion Market Association. The
gold price is set twice daily by the London Gold Fixing Company at 10:30 and
15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity
Index is designed to be a highly liquid and diversified benchmark for the
commodity futures market. The Index is composed of futures contracts on 19
physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT
Total Return Index measures the total return performance of the equity
subcategory of the Real Estate Investment Trust (REIT) industry as calculated
by Dow Jones.
* Yahoo! Finance is the
source for any reference to the performance of an index between two specific
periods.
* Opinions expressed are
subject to change without notice and are not intended as investment advice or
to predict future performance.
* Economic forecasts set
forth may not develop as predicted and there can be no guarantee that
strategies promoted will be successful.
* Past performance does not
guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly
in an index.
* Consult your financial
professional before making any investment decision.
* Stock investing involves
risk including loss of principal.
* To unsubscribe from the
“Peek of the Week”, please reply to this email with “Unsubscribe” in the
subject line, or write us at: Hagen Financial Network, Inc. 4640 Nicols Road,
Suite 203; Eagan, MN 55122.
Sources:
