We Need Japan -- Investor Insights from Glen Eagle

We Need Japan

April 22, 2024

Enjoy this week's "Investor Insights," a weekly newsletter that highlights the financial news you need and provides tips and tricks for making better investment decisions.

President Biden has reiterated during his campaign that he wants to increase taxes on those earning more than $400,000. Only 2.6% of all U.S. households are above that income threshold. Yet that is equivalent to 3.4 million households (33% more than in 2019). ₁

Money fund assets have surged by 25% since the beginning of last year, reaching $6.5 trillion. This flight to safety, however, may not pay off over the long term since stocks have outperformed cash by about 6% annually, going all the way back to 1901. _*2

Larger companies are performing better than smaller companies in good and bad markets. The Russell 2000 small-cap index rose less than 5% in the first quarter, compared to a 10% rise for the S&P 500. This month the index has fallen 8.3% vs. a 5.5% decline for the S&P. _*3

The dollar has surged by approximately 9% against the Japanese yen, reaching a level unseen since the 1990s. This may decrease Japanese investors' willingness to buy US treasuries which is a problem since Japan is the largest foreign holder of treasuries. ₄

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Sources:

WSJ – “The Americans Crossing Biden's $400,000 Tax Line"
Barrons – “Money Market Funds Look Like a Tempting Place for Your Cash, But Don't Make This Mistake."
WSJ - "Big Stocks Won When Markets Rose. They Are Winning Again in the Selloff."
WSJ - "They Bet Against the Dollar. Now They're Paying the Price."

*Past performance is not indicative of future performance

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Disclosure: This information is furnished for the use of Glen Eagle Advisors, LLC, Glen Eagle Wealth, LLC, and their clients and/or contacts. It does not constitute the provision of investment advice to any person. It is not prepared with respect to the specific objectives, financial situation, or particular needs of any specific person. Investors reading this commentary should consult with their Glen Eagle representative/financial advisor regarding the appropriateness of investing in any securities or adapting any investment strategies discussed or recommended in this newsletter.

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