Fear of Missing Out (FOMO)

Posted on September 9, 2020 by admin

Three in five Americans pay more attention to how their friends spend compared to how they save.

Americans remain optimistic that they will be wealthy at some point in their lives, and two in five believe they will achieve that goal within a decade. Yet, many obstacles and bad financial habits stands as road blocks to successfully accumulating wealth.

More than a third of Americans admit “their spending habits have been influenced by images and experiences shared by their friends on social media and confess they spend more than they can afford to avoid missing out on the fun”, according to Schwab’s 2019 Modern Wealth Index Survey.

Americans struggle to save, invest and accumulate wealth…they:

Live Paycheck-to-paycheck – A majority (59 percent) live paycheck to paycheck
Carry Credit card debt – Nearly half (44 percent) typically carry a credit card balance
Lack an Emergency fund – Only 38 percent have built up an emergency fund
Spend on Non-essentials – On average, they spend almost $500 a month on “non-essential items”

“The burden to ‘keep up with the Joneses’ has been part of American for decades, but it appears that social media and the fear of missing out (FOMO) have increased the pressure to spend,” said Terri Kallsen, executive vice president and head of Schwab Investor Services. “Spending is not the enemy, but when we allow social pressure or other forces to lure us into spending beyond our means, it can impact long-term financial stability and become a larger problem.”

People need to gain more insights about their own habits of saving, spending, investing and accumulating wealth. Schwab’s survey shows that more than 60 percent of Americans who have a written financial plan feel financially stable, while only a third of those without a plan feel that same level of comfort.

References:

Top Americans by Wealth own Most of U.S. Equity Stocks

Posted on September 7, 2020 by admin

Top 10% of Americans by wealth own 87% of all U.S. equity stocks

The top 10% of Americans by wealth owned 87% of all stock outstanding in the first quarter, according to research from the Federal Reserve. That share has grown over the past decade, from 82.4% in 2009. Fed researchers say the increase in wealth among the top 10% is largely a result of that cohort obtaining a larger concentration of assets. These increases were mirrored by decreases for households in the 50-90th percentiles of the wealth distribution,” Fed researchers said.

The percentage of Americans who own stock, either directly or through retirement or mutual funds, is falling. It most recently stood at about 55%, according to an April Gallup poll, down from a high of 67% in 2002.

“The middle class has essentially been left out of the stock market surge,” said Edward Wolff, an economics professor at New York University. “The rich have taken off from the rest of society.”

S&P 500 and NASDAQ indexes have closed at all time highs

The S&P 500 and NASDAQ have soared to a new high, wiping out its losses since the worst of the coronavirus-induced downturn in March. Stocks continue to shrug off historic unemployment rates and other economic warning signs.

The S&P 500, the benchmark U.S. stock index, has surged more than 50% since bottoming in March and is back at record levels, largely thanks to the unprecedented stimulus programs enacted by the Federal Reserve and Congress.

Although the stock market has erased its losses suffered during the pandemic, the economy appears to be telling a different story. It contracted at the sharpest rate on record in the second quarter, and the unemployment rate remained above 10% in July, after reaching nearly 15% in April.

The current disconnect between the stock market and the economy is extremely unusual. The economy is not confirming the stock market’s strength. The stock market has surged since March 2020 lows, with the S&P 500 and NASDAQ indexes eclipsing all time highs in August 2020.

FOMC acknowledged that after the initial surge in job losses and plunge in economic activity, things have started to improve. According to the statement, “Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year.”

Mental Health Impact of COVID-19 Pandemic

Posted on September 6, 2020 by admin

“Many experts believe there’s going to be a second curve, which is the mental health impact of COVID.” Alison Malmon, founder and executive director of the nonprofit organization Active Minds

The pandemic has stressed the mental health and well-being of millions of Americans

During this unprecedented time of uncertainty and fear, it is likely that mental health issues and substance use disorders among Americans will be exacerbated. Since epidemics in the past have been shown to induce general stress and anxiety across a population and may lead to new mental health and substance use issues, according to The Pan American Health Organization (PAHO).

Experts warn of an upcoming wave of mental disorders because of coronavirus. In the past, unprecedented times like a pandemic are almost always accompanied by increases in depression, posttraumatic stress disorder (PTSD), substance use disorder, a broad range of other mental and behavioral disorders, domestic violence, and child abuse, according to a recent opinion piece published in the Journal of the American Medical Association, Sandro Galea, MD, MPH, DrPH, a professor at the Boston University School of Public Health.

“If the country continues to ignore the collateral damage — specifically our nation’s mental health — we will not come out of this stronger.” Benjamin F. Miller, PsyD, chief strategy officer at Well Being Trust.

Preliminary data shows the pandemic has already negatively affected people’s mental health and well-being, particularly college students, according to Catherine Grus, the American Psychological Association’s chief education officer. More than one in three adults in the U.S. have reported symptoms of anxiety or depressive disorder during the COVID-19 pandemic. The negative implications on mental health and well-being of social distancing practices and job loss related to the economic recession on mental health is significant and growing

According to a recent Kaiser Family Foundation poll, more than half of Americans — 56% –reported that worry or stress related to the outbreak has led to at least one negative mental health effect.

Those negative mental health and well-being effects include trouble with eating or sleeping, drinking alcohol more, frequent headaches or stomachaches, shorter tempers, and other health problems. Among frontline health care workers and their families, 64% reported worsened mental health, as did 65% of those who had lost income.

Another recent report, released Friday from the Well Being Trust, said the pandemic could lead to 75,000 additional “deaths of despair” from drug and alcohol misuse and suicide due to unemployment, social isolation, and fears about the virus.

Disproportionate impact on African Americans and people of color

Additionally, it’s important to address the fact that the pandemic and the economic fallout has disproportionately affected Black Americans and people of color who have experienced higher mortality rates due to the coronavirus, as well as higher rates of unemployment.

Patrice Harris, MD, immediate past president of the American Medical Association, says COVID-19 worsened the mental and physical health problems that African Americans were already having.

“Pre-COVID-19, in the last 8 to 10 years, we have seen an increase in the number of suicide attempts in our African American youth, increased reports of stress and anxiety in African Americans in general and, unfortunately, we have also seen an increase in a [lack of] access to mental health care,” she says. “That is the foundation from which we have entered … [the] COVID-19 pandemic.”

Since the pandemic came to the United States, Harris says, much of the country has shown signs of more anxiety, stress, and worry. “If you add that to the foundation that we have pre-existing conditions around health and equity, then it just adds to the level of stress, anxiety, and trauma felt by the [African American] community.”

Access to needed health care services was a concern prior to the pandemic

It is imperative that our society focus efforts to educate Americans, especially students and people of color, on issues such as stress, depression and anxiety, and provide ways to cope with these maladies. Many Americans will likely require mental health and substance use services. Consequently, the pandemic spotlights both existing and new barriers to accessing mental health and substance use disorder services.

Among households that report skipping or delaying health care during the pandemic, 4% state that as a result, their or a family member’s mental health condition worsened. For people with insurance coverage, an increasingly common barrier to accessing mental health care is a lack of in-network options for mental health and substance use care.

Limited access to mental health care and substance use treatment is in part due to a current shortage of mental health professionals, which will likely be exacerbated by the COVID-19 pandemic.

“People look at the pandemic and they tend to be drawn to the negative. If we can help shift people to look at the positive, it really helps because we know that neurons that fire together wire together.” Heather Aston, Program Manager, San Diego Access and Crisis Line

It’s helpful to learn about “distress tolerance” skills, which involve accepting that some problems are beyond one’s control. Instead of becoming mired in feelings of unfairness and anger, people can learn healthier ways of thinking and coping when they can’t escape painful situations like a pandemic and economic recession.

Even with the looming epidemic of mental health issues, experts say that people are resilient and can strive to protect their emotional well-being. People can develop their own psychological tools. Experts offer:

Try to to eat healthy, exercise daily and sleep well.
Try to stay socially connected with friends and families, even if you can’t see others in person.
Limit negative news and social media.

How Americans are coping during COVID-19

References:

Myocarditis, Inflammation of the Heart Muscle

Posted on September 4, 2020 by admin

Penn State doctor says 30-35% of Big Ten athletes testing positive for COVID-19 had myocarditis symptoms.

Cardiac MRI scans revealed that roughly a third of all athletes who have tested positive for the coronavirus appear to have myocarditis, an inflammation of the heart muscle, said Penn State’s director of athletic medicine.

Myocarditis is an inflammation of the heart muscle that can lead to arrhythmia, cardiac arrest and death, especially in a person who doesn’t know they have it and performs rigorous exercise. The risk of myocarditis was a prime reason behind the Big Ten Conference’s decision to postpone the upcoming football season.

According to the Mayo Clinic, “In many cases, myocarditis improves on its own or with treatment, leading to a complete recovery.”

Even in mild cases of myocarditis, however, the clinic suggests that “persons should avoid competitive sports for at least three to six months.”

The cause of COVID-19 myocarditis is unclear. Some researchers speculate that the coronavirus may sometimes directly infect the heart.

Another possible culprit is the immune system’s response against the virus. When it fires out of control — a severe inflammatory reaction known as a cytokine storm — it can damage organs throughout the body, including the heart.

References:

COVID-19 Frequently Asked Questions | New York Times

Posted on September 3, 2020 by admin

Updated September 1, 2020

Why is it safer to spend time together outside?

Pandemic life is safer outdoors. Outdoor gatherings lower risk because wind disperses viral droplets, and sunlight can kill some of the virus. Open spaces prevent the virus from building up in concentrated amounts and being inhaled, which can happen when infected people exhale in a confined space for long stretches of time, said Dr. Julian W. Tang, a virologist at the University of Leicester. Thus, while the risk of outdoor transmission is low, it can happen.

“The virus load is important,” said Eugene Chudnovsky, a physicist at Lehman College and the City University of New York’s Graduate Center. “A single virus will not make anyone sick; it will be immediately destroyed by the immune system. The belief is that one needs a few hundred to a few thousand of SARS-CoV-2 viruses to overwhelm the immune response.”

What are the symptoms of coronavirus?

In the beginning, the coronavirus seemed like it was primarily a respiratory illness — many patients had fever and chills, were weak and tired, and coughed a lot, though some people don’t show many symptoms at all. Those who seemed sickest had pneumonia or acute respiratory distress syndrome and received supplemental oxygen. By now, doctors have identified many more symptoms and syndromes. In April, the C.D.C. added to the list of early signs sore throat, fever, chills and muscle aches. Gastrointestinal upset, such as diarrhea and nausea, has also been observed. Another telltale sign of infection may be a sudden, profound diminution of one’s sense of smell and taste. Teenagers and young adults in some cases have developed painful red and purple lesions on their fingers and toes — nicknamed “Covid toe” — but few other serious symptoms.

Why does standing six feet away from others help?

The coronavirus spreads primarily through droplets from your mouth and nose, especially when you cough or sneeze. The C.D.C., one of the organizations using that measure, bases its recommendation of six feet on the idea that most large droplets that people expel when they cough or sneeze will fall to the ground within six feet. But six feet has never been a magic number that guarantees complete protection. Sneezes, for instance, can launch droplets a lot farther than six feet, according to a recent study. It’s a rule of thumb: You should be safest standing six feet apart outside, especially when it’s windy. But keep a mask on at all times, even when you think you’re far enough apart.

COVID-19 risk factors for severe disease

Based on currently available information and clinical expertise, older adults and people with underlying medical conditions are at higher risk for severe illness from COVID-19. According to the CDC, “…6% of the deaths, COVID-19 was the only cause mentioned.” Essentially, 94 percent of Americans who have died from coronavirus from the week ending February 1, 2020 to the week ending August 22, 2020 had, on average, almost three comorbidities that played a role in their death.
According to CDC’s report, the leading comorbidities among COVID-19 deaths were respiratory diseases, circulatory diseases, sepsis, malignant neoplasms, diabetes, obesity and Alzheimer’s disease, respectively.
“Anecdotally, there are several stories of cases in which people with COVID-19 had deadly heart attacks, yet these cases were coded as COVID-19 deaths. In one extreme case, a Florida man who died in a motorcycle crash happened to also have COVID-19 at the time, yet was coded as having died from COVID-19, not because of the motorcycle accident.” Many clinicians are putting COVID-19 on death certificates when it might not be entirely accurate because they died infected with coronavirus and not because of coronavirus.

Sources:

Sorrento Therapeutic’s COVID-19 Test

Posted on September 2, 2020 by admin

Sorrento’s COVID-19 test appears to be superior to competing diagnostics, and it just made a good acquisition, while its overall strategy is sound.

Sorrento has produced a coronavirus test which is expected to be approved and then become widely used in the U.S. and potentially around the world. The company requested emergency use authorization (EUA) from the Food and Drug Administration for its COVI-TRACK diagnostic test, which detects novel coronavirus antibodies. It also plans to file for an EUA for COVI-TRACE, a rapid salivary diagnostic test licensed from Columbia University.

Sorrento has been even more active in developing potential treatments for COVID-19. The biotech filed for FDA approval earlier this month to begin a phase 1 study of antibody therapy STI-1499 (COVI-GUARD) in treating hospitalized COVID-19 patients. It hopes to quickly advance the candidate through clinical testing and perhaps even receive an EUA for STI-1499 as soon as the end of 2020.

a number of test tubes and capsules are pictured under a cool blue light

Source: Shutterstock

Sorrento’s coronavirus test yields results in just 30 minutes, does not require lab equipment and doesn’t have to be sent to labs. As a result, it, unlike other tests, could be used by hospitals, stadiums, hotels, office buildings and other organizations to allow people to safely enter their facilities on the same day that the test is taken.

References:

Accumulating Wealth in the Stock Market

Posted on September 1, 2020 by admin

Updated: September 2, 2020

The stock market has been the primary reason for the diverging wealth gap. The logical solution is to get more Americans invested in the stock market.

According to Forbes, nine out of every 10 households with incomes over $100,000 own stocks. But sadly, most American’s don’t have any personal capital invested in stocks. Only 20% of households earning less than $40,000 own stocks. And research from the National Bureau of Economic Research shows almost two-thirds of investors have less than $10,000 in the stock market.

Fifty-five percent (55%) of Americans report that they participate in the stock market (own stocks), according to Gallop.

Furthermore, Gallup finds “relatively few Americans in lower-income households invested in stocks” and only 55% of Americans reported that they own stock, based on polls conducted in March and April of 2020. This is identical to the average 55% recorded in 2019 and similar to the average of 54% Gallup has measured since 2010.

In other words, the stock market’s exponential rise over the past decade has not helped most American families. In fact, “fewer Americans are benefiting from today’s bull market than did so in bull markets before the financial crisis.

The gains in stock values in recent years seem to have done little to persuade people who may have divested themselves of stocks to get back in the market” according to Gallup’s research. In fact, a recent survey by Betterment highlights this great misfortune. When asked how the stock market performed over the past decade, roughly half of those surveyed said the market had gone nowhere. Worse yet, a further 20% said they thought it fell!

Eighty-four percent (84%) of all stocks owned by Americans belong to the wealthiest 10 percent of households, according to NYU economist Edward N. Wolff.

The number of Americans who own stocks has plunged since 2000. But after a relentless 20-year decline, this trend is reversing. Thanks to commission-free trading led by Robinhood, all the major brokerages have seen millions of new investors flood into the market in 2020.

In short, millions of new investors are getting into stocks for the first time. And it’s a wonderful thing.

You will never accumulate wealth “Renting Out Your Time”

Working hard and saving money is necessary. But it’s often not sufficient. Ramit Sethi wisely points out in I Will Teach You To Be Rich:

“Because of inflation, you’re actually losing money every day your money is sitting in a bank account.”

Additionally, Robert Kiyosaki of Rich Dad, Poor Dad likes to say that:

“The rich get richer by continually reinvesting asset profits back into assets.”

Thus, as you may see, it is extremely important to make your money work for you. But, it appears that most people don’t know how to make their money work for them. But if you want to build massive wealth, you need to put your dollars to work.

And, you can put your dollars to work by owning a piece of a successful business—owning stocks—that is the main path to accumulating wealth that’s available to anybody.

It’s okay if you only have a little money to get started. These days it’s totally free to buy stocks through most big brokerages. And you can usually open an account with as little as $100.

Start by investing in a market index fund 🙂

The important thing regarding investing is to overcome the fear and break the inertia, and start investing. No more excuses. If you’re just getting started investing, first it is recommended that you buy a market index fund such as a S&P 500 Index mutual fund or exchange traded fund that owns a list of U.S. large cap stocks. That way you’ll own tiny fraction of hundreds of businesses.

An index is a list of companies…so when you buy S&P 500 index mutual fund or exchanged traded fund, you are buying an index that tracks the S&P 500. In fact, buying fund that tracks a market index is one of the best ways for beginner investors to get their feet wet in the stock market.

The S&P 500 is a stock market index that measures the performance of about 500 companies in the U.S. It includes companies across 11 sectors to offer a picture of the health of the U.S. stock market and the broader economy. This stock market index is viewed as a measure of how well the stock market is performing overall.

Additionally, index funds continue to outperform the vast majority of the actively managed funds in their asset classes. In the 15 calendar years ended last Dec. 31, the S&P 500 Index outperformed 90.5% of all actively managed U.S. large-cap funds, according to analysts at S&P. Among 13 specific asset classes, the percent of funds that under-performed their benchmark indexes were similar, ranging from a low of 81.4% for large-cap value funds to a high of 95.2% for mid-cap blend funds.

Focus on Asset Classes

Investors are increasingly focused on asset classes instead of individual stocks. The reasons are that asset classes are much less risky than individual stocks, without sacrificing anything in terms of expected return.

The experts teach that the expected return of one stock is the same as the expected return of the entire asset class of which that stock is a member.
Yet the risk of owning just one stock is huge: It could disappear (relatively unlikely) or go into massive free-fall for any of a variety of reasons. There’s very little risk of that happening with an asset class made up of hundreds of stocks.

References:

Dexamethasone – first drug shown to reduce Covid-19 deaths

Posted on August 30, 2020 by admin

The most severe symptoms of COVID-19 are the result of the an infected person’s immune system’s overreaction to the virus. Dexamethasone is an anti-inflammatory drug that can rein in a person’s immune system attack.

Dexamethasone is a corticosteroid that prevents the release of substances in the body that cause inflammation. It is used to treat many different inflammatory conditions such as allergic disorders and skin conditions.

Dexamethasone is also used to treat ulcerative colitis, arthritis, lupus, psoriasis, and breathing disorders. It may also be used for purposes not listed in this medication guide.

This drug is relatively inexpensive and widely available steroid that blunts many types of immune responses. Doctors have long used it to treat allergies, asthma and inflammation.

In June, it became the first drug shown to reduce Covid-19 deaths. That study of more than 6,000 people, which in July was published in the New England Journal of Medicine, found that dexamethasone reduced deaths by one-third in patients on ventilators, and by one-fifth in patients on oxygen. It may be less likely to help — and may even harm — patients who are at an earlier stage of Covid-19 infections, however.

In its Covid-19 treatment guidelines, the National Institutes of Health recommends only using dexamethasone in patients with COVID-19 who are on a ventilator or are receiving supplemental oxygen.

Steroid medication affects your immune system. You may get infections more easily. Steroids can also worsen or reactivate an infection you’ve already had. Tell your doctor about any illness or infection you have had within the past several weeks.

References:

U.S. Economy and Stock Markets are Highly Disconnected

Posted on August 29, 2020 by admin

“The stock market isn’t the economy. The economy is production and jobs, and there are shortfalls in virtually every sector of the economy.” -Janet Yellen, former Chair of the Federal Reserve

We remain in the midst of a global crisis as the impact of COVID-19 infections continues to spread. As a result, we are experiencing an income crisis for a wide swath of the working population. The labor market decline was most catastrophic on low-end age earners. Those jobs have been the slowest to recover and many of those jobs have been loss permanently.

financial markets reflect assessments of the value of assets today based on investors’ expectations for the cash those assets will generate.

The U.S. economy is highly consumer-driven according to economists; our Gross Domestic Product (GDP) levels are guided primarily by consumer spending. The “V-shaped” recovery in retail sales data has been a boon to the bull market narrative. There is, however, legitimate concern over the potential impact if the Congress and Executive branch are unable to hammer out a compromise on extended unemployment benefits.

Causes of the disconnect

“Financial markets reflect assessments of the value of assets today based on investors’ expectations for the cash those assets will generate.” Vanguard Investments

Hope-ism and federal intervention are buoying up the stock market. “Hope-ism” is the wishful thinking that makes investors believe that the economy will not only recover quickly, it will snap back with vigor as the virus is quickly vanquished.

Federal intervention has been stratospheric over the past decade plus. Coming into the pandemic, the Fed had injected $5 trillion in Quantitative Easing (QE) from the 2008 recession. Now it has added another $3 trillion in the first round of COVID-19 relief and will likely add at least another $2 trillion, bringing the total to a whopping $10 trillion.

The two, the U.S. economy and equity stock markets, will reconnect again. Either the economy will recover, as the stock market predicts, or the stock market will reprice and crash. In the following we discuss the causes of the disconnect and what investors should be concerned about as the disconnect corrects.

Investors should expect a stock market correction. Greed will give way to fear. FOMO (fear of missing out) will become FOLO (fear of losing out). Also, there are plenty of other threats to the economy and stock market including a global debt crisis, cyber crime and terrorism, trade wars and socioeconomic unrest.

References:

Brownlee Global: Gratitude to Greatness

Gratitude is a Powerful Tool That Can Help People Live the Lives They Want

Fear of Missing Out (FOMO)

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Top Americans by Wealth own Most of U.S. Equity Stocks

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Mental Health Impact of COVID-19 Pandemic

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Myocarditis, Inflammation of the Heart Muscle

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COVID-19 Frequently Asked Questions | New York Times

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Sorrento Therapeutic’s COVID-19 Test

Sorrento’s COVID-19 test appears to be superior to competing diagnostics, and it just made a good acquisition, while its overall strategy is sound.

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Accumulating Wealth in the Stock Market

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Dexamethasone – first drug shown to reduce Covid-19 deaths

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U.S. Economy and Stock Markets are Highly Disconnected

Causes of the disconnect

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