Transcript
Dr. Ben Zweig (0:00)
Foreign.
Robert Brokamp (0:04)
What to know about your stock's workforce and the changing nature of the s and P500. That and more on this Saturday personal finance edition of Motley fool money. I'm Robert Brockamp, and this week I speak with Dr. Ben Zweig, the CEO of Revelia Labs, about the insights that could be gleaned from a company's hiring, firing, pay and other factors. But first, let's discuss some items that caught my attention from last week. You know, while we talk a lot about investing in individual stocks here at the Motley fool, we're also big fans of index funds. We have them in our company 401, and they're among the most popular choices. And the index that is most tracked by index funds is the S&P 500. It can be an outstanding investment to buy and hold for decades, but the index itself changes all the time. Sam Rowe, writing on his ticker substack that's spelled TKER, cited research from Goldman Sachs which found that since 1985, 20% of the index's constituents turn over every five years on average, and the amount of time spent in the index is getting shorter. Back in the 1970s, the average company lifespan in the index was 29.3 years, whereas it has been 18.3 years so far in the 2000s. In fact, six of the magnificent seven have been added in the past 25 years. As Sam wrote, quote, in any given period, there are stocks driving the overall market higher, and often many of these market leaders eventually stumble and underperform. But other stocks always emerge to take the baton and extend the market's very long trend higher, end of quote. For our next item, we'll remind you that this is an election year, and a few recent articles have pointed out that the US Senators who will be elected or reelected this year to six year terms will likely have a say in how Social Security's shortfall will be resolved. Currently, benefits are funded from taxes paid by workers, employers and about half of Social Security beneficiaries, with the rest coming from a trust fund established almost a century ago. However, that fund could be depleted by 2032, a couple of years sooner than expected due to several factors including a slowdown in employment, a reduction in immigration and tax breaks in the one big beautiful bill that will result in fewer beneficiaries paying taxes on their benefits. Without a fix, the benefits will be cut by 20 to 25% when the trust fund is exhausted. What could that fix be? Well, likely it will be some combination of higher taxes. Later claiming ages means testing benefits and or changes to the benefit formula. What changes might be most palatable to you? Well, you can see the options and their impact by taking the Social Security Challenge from the American Academy of actuaries@actuary.org SocialSecurity and before you vote this year, file find out what changes the candidates plan to support. And now we come to the number of the week, which is 2.7%. That's the most recent reading for the Consumer Price Index, announced this past Tuesday, indicating that while inflation isn't accelerating, prices are also not coming down. And as pointed out in an article from the editorial board of the Wall Street Journal, many Americans are feeling the pinch because some everyday essentials such as shelter, food, medical care and energy have experienced price increases above the rate of overall inflation. Meanwhile, wage growth for many workers has stalled, as has the job market itself. According to a recent survey of consumer expectations from the Federal Reserve bank of New York, the perceived probability of finding a job in three months if one's current job was lost fell to 43.1%, the lowest reading since the survey began in 2013. Thanks to lower interest rates and more tax breaks, a lot of stimulus will be flowing into the economy this year. Hopefully it will result in wage and job growth without nudging up inflation. We shall see Next up, what you can learn from the employees of the companies in your portfolio when Motley Fool Money continues.
