By Randy Brunson
SUWANEE, Ga. | Welcome to May and the end of the school year. Let’s get started with some recent financial items that may be of interest to you.
Brunson
Schwab Class Action Suit: Some of you may have recently received notice of a proposed class action settlement, directed at Schwab. The settlement class consists of Schwab account holders who previously had accounts at TD Ameritrade. If you are a client, we suggest you ignore this notice. Our observation regarding class action lawsuits is that they typically work well for the plaintiff firms, less so for the plaintiffs themselves. In a healthy society, there is certainly a place for courts and the attorneys who navigate the law and court systems. The fact that private equity money has backed plaintiff firms in class actions gives us pause. And does nothing to bolster our confidence in class action suits.
Market Behavior: As of the close of the market on Monday May 12, the S&P 500 and the Dow Jones Industrial Averages were within 1 percent of being flat for the year, while the NASDAQ remained down three per cent year to date. That was quite a recovery from early April. This simply means that the sectors and stocks which have been driving the market for the last two to three years remain extraordinarily richly priced. Historically, the S&P 500 is up 6.7 percent during the first year of a new president, based on data from PinPoint Macro Analytics. Actual results are variable with “worst years” dating back to 1931 and 1939.
Index Investing: Investing through an index fund, and in particular one which tracks the S&P 500, has grown significantly since John Bogle opened what is now the Vanguard 500 fund in 1975. This move coincided with Baby Boomers coming of age and, in our opinion, has had a positive impact on the investing world. At the end of 2024, according to Cerulli Associates, total Index-Based assets crossed the $16 trillion mark.
With the current domestic and global realignment taking place, will index investing continue to dominate? Or will active management reassert its value? Is the goal of investing, for you, simply tracking an index? Or the achievement of certain personal or life goals? And what is the role of investing, index or otherwise, in helping you achieve your goals.
That Social Security Check: So when does your Social Security check actually get deposited to your account? If your birthday falls between the 1st and 10th of the month, your Social Security check is deposited on the second Wednesday of each month. If your birthday falls between the 11th and 20th of each month, your Social Security check is deposited on the third Wednesday of each month. And for those of us whose birthdays fall after the 20th of each month, your checks deposit on the fourth Wednesday. In May 2025, those Wednesdays are as late as they can be, as May 1 was on a Thursday.
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