Friday Five at Five: August 11, 2023
1) Credit Card balances at all time high!
For the first time in history, credit card balances have exceeded One Trillion dollars!
That’s $1,000,000,000,000!
The economy and the stock market have not shown any signs of deterioration with the high inflationary period we are going through. Now we know why. Americans have been keeping up with inflation (not with higher wages as the economists would like you to believe) but by decreasing their savings and putting their lifestyle on the their credit card.
Well, unlike the Federal government (who just increases their “credit card limit by increasing the arbitrary “debt limit), Americans will soon be squeezed.
Credit Card companies will start reducing the amount of credit as delinquencies rise (which they currently are).
Maybe you are carrying a $2,000 balance on a card with a $10,000 limit. You will soon see your credit card limit go down to $2500 (or less) as the banks start tighten.
So, there is only one thing that we Americans can do if we don’t want to tap anymore of our savings and we are out of credit. We will have to cutback on our spending.
This will cause the recession that everyone has been talking about.
The only question then, as recessions are inevitable, is how deep and how long the recession lasts!
2) Plan Confidence Corp (re)files with the SEC as an “Internet Only” RIA
This week we have re-filed with the Securities and Exchange Commission (SEC) the status of our company.
We originally filed with the SEC in 2016 as an “Internet Only” RIA.
Last year we changed our status to a “Multi-State” firm as we were going to launch discretionary money management services (like a TAMP) to our clients.
We have since decided not to launch the TAMP like services as we do not want to have the perception that we compete with the Advisors who use our software.
So, in order to get rid of any misconceptions that we will compete with our Advisors over future rollovers, we have moved back to an “Internet Only” firm.
We legally cannot “talk” to any client or offer any more services other than the 401k/403b/TSP advice that we currently provide.
3. Added new "disclosure"
Due to the changes listed in Item #2 above, all of the current Plan Confidence clients (participants) will have to click “I Accept” to all the new “Internet Only” disclosures prior to reviewing any of their future advice.
4) The S&P 500 has found it’s ceiling (for now)
It’s been another roller coaster week for the S&P 500.
(The S&P 500 index is 500 mostly large, medium and small sized stocks. It’s the index that most people managing money are trying to beat as it is a better indicator of the overall market. The Dow Jones is only 30 stocks).
Several times this week the S&P 500 started to move up.
And then it bumped against the 4500 level.
It appears that every time the S&P 500 gets above 4500, the computerized trading and algorithms kick in and send the market down again.
So, at least for now, it appears that the ceiling for the S&P is 4500.
For how long?
No one knows.
But with the majority of “earnings season” already behind us, I don’t see any big catalyst that will get us above 4500 for an extended period of time before Labor Day.
Why?
Because after Labor Day is when the (unofficial) “professional” money managers come home from the Hamptons and abroad and get back to work.
I don’t mean to brag, but, cashiers have been checking me out lately!
Kevin T Clark, RF™ is the CEO and Co-founder of Plan Confidence Corporation (PCC).
Kevin is also an ERISA Nerd and one of only a hundred Dalbar certified Registered Fiduciaries (RF) in the United States. He has been helping hard working Americans invest their money for over 25 years!
PCC is an SEC registered investment firm specializing in providing advice to hard-working Americans investing in their employer’s retirement plans (401k, 403b, TSP, etc).