Our Thinking

First Quarter 2014: New Jersey Wealth Index

The RegentAtlantic New Jersey Wealth Index (RANJWI) is a proprietary index that measures the health of the wealth in New Jersey. RegentAtlantic developed the index which is based on four major components: Employment, Home Values, Personal Income, and Stock Performance. It can range from 0 to 100, with values above 50 indicating that the State has experienced an above average environment for wealth creation.

The RANJWI’s value for the first quarter of 2014 is 40, indicating that the environment in the State has been close to average for wealth creation.

The financial crisis and associated recession from 2007-2009 took the RANJWI to record lows. Falling home prices, a weak stock market, high unemployment and slow income growth created a very adverse environment for wealth creation. The index hit an all-time low in mid-2012 at a value of just 17.  The recovery to 40 in a relatively short time indicates a potential turnaround in our state’s fortunes.  Last year, the index registered its biggest annual gain on record. With the index currently at 40, there is still room for continued improvement. 

 

The strongest positive trend supporting the State’s wealth is stock prices. The Bloomberg State Index for New Jersey, which measures stock returns for public corporations with NJ Headquarters, has returned 23.0% per year over the past five years, materially outperforming the S&P 500, which gained 21.1% per year. Personal income rose over 1% in 2013, roughly keeping pace with inflation. New Jersey saw one of the biggest declines in unemployment in the nation, falling to 7.2% from over 9% at the beginning of 2013. The trend in New Jersey’s home prices is less encouraging. While prices have stabilized, the 1% gain seen on New Jersey homes lags the U.S. as a whole.

RanjwiQ12014

 

Components of the RANJWI

 ranjwi-components-q4-2013.jpg

 

Important Disclosure Information

Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC ("RegentAtlantic") will be profitable. Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request. This presentation is not a substitute for personalized advice from RegentAtlantic. This information is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.The Index was launched on June 30, 2013 with scores calculated and filled back to March 31, 1995. All Index calculations are based on twenty quarters (five years) of trailing data, so the earliest data in the March 31, 1995 score calculation is from March 31, 1990.

Source for the data for the Employment, Housing, Personal Income and NJ Stock Performance Scores: Bloomberg.

 

Dummy Content