Monthly News & Financial Updates – January 2024

Feb 2, 2024

I hope you had a great January.

I wanted to share a few interesting facts and articles I came across over the past month.

Financial News Roundup

  • California Quietly Raises State Income Tax Rate to 14.4%. Starting this year, California workers earning more than $145,600 will pay an additional 1.1%.
  • 529-to-Roth Conversions. I’ve had a few questions about converting college-savings accounts to retirement accounts, which became an option in 2024. If you’re curious about the rules, here is a good article on the topic.
  • The Four Phases of Retirement. An interesting and entertaining Ted Talk (13:23).
  • January Effect. This is more of a fun stat, so take it with a grain of salt. When stocks are positive in January, the remaining 11 months of the year are up 12% on average, and positive 86% of the time. Given that we just finished with a positive January, let’s hope this holds true!
  • 49ers: If you’re looking for another reason to root for the 49ers to win the Super Bowl, know this: stocks have done better when the NFC team wins. In addition, the S&P 500 is up 19% on average the past 5 years the Niners won!
  • Top 1%: How much you need to earn to be in the top 1%:

  • Budgeting: I look at how people spend their money all the time. Most people don’t, so I thought sharing this sample budget from a family of four (two working parents, two young kids) earning $400,000 pre-tax could be interesting:
  • Tech Layoffs: Layoffs nationwide remain flat, but there have been headlines recently about layoffs in tech. For a detailed view, head to layoffs.fyi. Here’s the high-level overview:

Monthly Economic & Market Summary for January 2024

  • Jerome Powell, Chairman of The Federal Reserve, said it best (and succinctly) this week when he said, “This is a good economy.”
  • US GDP grew 3.3% in the fourth quarter of 2023. Expectations were for 2.0% growth, so this was surprisingly good outperformance. For 2023 as a whole, US GDP grew at 2.5%, which is great.
  • All-Time Highs: The S&P 500, an index for large US companies, hit an all-time high in January. This was its first all-time high in two years. Certainly something to celebrate!
  • US and global inflation is on the decline. This is a very welcome change. Of the G10 countries, prices are rising by 5.4% per year, down from a peak of 10.7% in October, 2022. In America, the inflation rate is lower, at 3.3%.
  • Gas prices remain low. The national average of $3.15 is four cents more than a month ago, but 35 cents less than a year ago.
  • The job market remains strong, In January the US added 353,000 jobs, nearly double what was forecast. Unemployment remains below 4%.
  • Incomes are rising, especially among low-income earners.
  • Sentiment Improving: People across the country are slowly coming around to an optimistic view of the economy. An important survey of consumer sentiment among U.S. consumers climbed in January to its highest level since July, 2021.

As always, please reach out if you have any questions or would like to connect.

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Past performance is no guarantee of future returns.

The graphs and charts in this commentary are for illustrative purposes only and not indicative of any actual investment. Index returns do not reflect any fees, expenses, or sales charges. It is not possible to invest directly in an index. Stocks are not guaranteed and have been more volatile than other asset classes. Historical returns were the result of certain market factors and events which may not be repeated in the future. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgement in determining whether investments are appropriate for clients.

This material is intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities.

  1. Data from Morningstar. Returns over one year are annualized.

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The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Think Different Financial Planning cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Think Different Financial Planning does not provide tax or legal advice, and nothing contained in these materials should be taken as such. As always please remember investing involves risk and possible loss of principal capital. Advisory services are only offered to clients or prospective clients where Think Different Financial Planning and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Think Different Financial Planning unless a client service agreement is in place.