By the Numbers
“TIME IN” vs. “TIMING”
The split between “up” and “down” time periods for the S&P 500 index from 1950 to the end of 2020, i.e., the last 71 years, as measured by: Days: 54% up and 46% down; Months: 60% up, 40% down; Quarters: 67% up, 33% down; Years: 73% up, 27% down; 5-Year Rolling Time Periods: 79% up, 21% down; and finally 10-Year Rolling Time Periods: 89% up, 11% down. The S&P 500 consists of stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock's weight in the index proportionate to its market value (source: BTN Research).
MULTIPLIER
The “American Rescue Plan Act of 2021” includes $1,400 cash payments made to 110 million households. If each taxpayer that received $1,400 had a “marginal propensity to consume” of 60%, the initial taxpayer would save $560 and spend $840, and then in turn the party that received the $840 would save $336 and spend $504, and the next party would save $202 and spend $302, and so on. Ultimately the original $1,400 cash payment would result in $2,100 of economic activity, i.e., $840 + $504 + $302 + . . . (source: BTN Research).
MONEY THAT THEY WILL SPEND
42% of the $1.9 trillion “American Rescue Plan Act of 2021,” i.e., $800 billion out of the $1.9 trillion, is direct support that will be distributed to households in the form of stimulus payments, unemployment benefits, and child tax credits (source: American Rescue Plan Act of 2021).
TRILLIONS TO HELP
The 6 bills (totaling $5.6 trillion of aid) passed by Congress to combat the impact of the pandemic in the last 13 months are
1) HR # 6074 ($8.3 billion in March 2020)
2) HR # 6201 ($3.5 billion in March 2020)
3) HR # 748 aka the CARES Act ($2.3 trillion in March 2020)
4) HR # 6312 aka CARES # 2 Act ($484 billion in April 2020)
5) HR # 133 ($900 billion in December 2020)
6) HR # 1319 aka the American Rescue Plan Act ($1.9 trillion in March 2021) (source: Congress).
ALMOST HALF OF ADULTS
46% of American adults experienced a loss of income or they live with someone that experienced a loss of income in the nearly 1-year following President Donald Trump’s declaration of a pandemic-driven “national emergency,” i.e., from 3/13/20 to 2/28/21 (source: Census Bureau).
SAME NUMBER ABOVE AND BELOW
50% of the 153.8 million Form 1040s that were filed for tax year 2018 (a total of 76.9 million returns) reported less than $40,000 of adjusted gross income(source: IRS).
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