Looking Back At The 2017 Stock Market
The stock market had one of its best years in recent memory, as noted below is all of our numbers and indices. The thriving stock market is the result of increasing economic growth and enormous corporate profits. The biggest catalyst was likely the sweeping tax cuts President Donald Trump just signed into law, which over time will save corporate America billions on what they owe Uncle Sam. This sweeping tax cut was the topic of discussion all year, but didn’t get signed into action until December of 2017. Investor.com put together a great chart of all events throughout 2017.
Noteworthy stock market news from 2017
- At nearly nine years old, the bull market is now the second-oldest and second-strongest in history.
- The Dow raced 25% higher in 2017, getting even closer to 25,000 and making this year its best since 2013.
- It had taken the Dow 14 years to climb from 10,000 to 15,000, but just three and a half years to reach 20,000 in 2017.
- The broader S&P 500 zoomed 19%. And the Nasdaq jumped an impressive 28%.
- Indexes made superb gains in a year of unusually low volatility.
- The Nasdaq’s worst drop was only 4.4%.
- Just 18.7% of taxpayers own stocks directly. Roughly half of Americans participate in the market through an employee-sponsored retirement plan, according to a Pew analysis of Census Bureau data. That gap has contributed to record-high wealth inequality in America.
2017 Year-End Stock and Bond Index Performance
- NASDAQ 28.2%
- Dow Jones Industrial Average 25.1%
- S&P 500 Index 19.4%
- Foreign Stocks 27.4%
- U.S. Bond Index 3.55%
How Did My 401k Do in 2017?
Last year in 2017 my retirement accounts (one 401k and two Roth IRA’s) were collectively up 17.5%. I am not thrilled about under-performing the major market indices, considering the S&P 500 was up 19.4% and foreign stocks were up over 27%. However, I am very pleased with my performance.
The Vanguard Target Retirement 2040 Fund (VFORX) was up 20.7% in 2017. This is my personal benchmark because I could invest all my retirement portfolio into one account or choose a number of index funds to diversify. I am doing the latter and in 2017 I lost to the 2040 Target Date Fund by 3.2%.
However, over the last 10 years, which is essentially my working career, my personal retirement performance return is 11.1%. I am thrilled with that return. If I can keep that double digit return up until retirement I will be extremely wealthy. But I have worked during the best bull market in history (2007 to 2017) so to keep those returns is unrealistic. But again, I am very happy with my 10-year return of 11.1%. As stated earlier my personal benchmark that I compare my retirement portfolio to is the Vanguard Target Retirement 2040 Fund (VFORX), which is only up 6.44% in the last 10 years.
Millennial Personal Finance Blog
My goal with this Millennial personal finance blog is to show all Millennial’s that you have the power to take control of your personal finances through self-education and self-development on money and finances, and by striving to become financially literate. That is what I have been doing for years now, focusing on becoming an expert in financial literacy, so I can one day become financially independent. I’m trying to prove to Millennial’s that we can all do this and thrive with money. We Millennial’s have the greatest resource on our side to become financially independent and build wealth…time! Save, invest, and let compound interest do the rest.
Follow my blog as I highlight relevant personal finance and retirement topics pertaining to us Millennial’s. You can also join my journey as I track the true cost to raise a child these days. Most of my research shows that on average it costs $14,000 per year to raise a child, which equates to roughly $250,000 to raise a child from birth through high school (the cost of college is not included in this $250,000). I am trying to defy that price tag and show that a Millennial family can raise a child on well less than $250,000…or I will come to the sad realization that this number is dead on. Time will tell.