Charts of Q2 2021

Summer is here! We hope you are enjoying the extended daylight and are spending time with family and friends throughout the upcoming months. To recap the past quarter, we are sharing some topical charts with you.

INFLATION

Recently, the US inflation rate reached a 13-year high. As a result, there has been an exhausting number of headlines published about inflation recently. Unfortunately, inflation buzz creates a lot of noise from people trying to predict something that is not predictable. Will interest rates rise? Will there be a surge in US spending or saving? Will more production occur inside the US? As the chart indicates, inflation itself is always fluctuating. Due to the unpredictable nature of inflation, we do not recommend making financial decisions based on headlines.

THE RISE OF GASOLINE PRICES

Remember when oil producers had to find places to store their oil during the early stages of the pandemic? Since then, the price of gasoline has been steadily rising. If you get sticker-shock from filling up your car’s tank of gas, remember that there are many factors that affect oil and gas prices. For example, seasonal demand, commodities speculation, and the value of a dollar all impact gas prices. To reduce the amount of money you spend on gas this summer, we recommend inflating your tires to increase fuel efficiency or simply riding a bicycle this summer!

Real Estate Prices are Soaring

We included a chart about housing prices in our Q1 Charts post, and for homebuyers there hasn’t been much great news since then. Real estate prices are still surging. For a visual, see the chart comparing the rise of home prices in Portland, Seattle, San Francisco, and the National Case-Shiller index since 2018.

Real estate prices are a result of inventory issues, the heightened cost of lumber for new construction (see chart below), and many people relocating their residency since the pandemic. If you haven’t experienced it yourself, we all know someone who has been outbid on several houses making the home buying experience feel impossible.

The Child Tax Credit Revamp

The Biden Administration revamped the child tax credit for 2021. The updates include a larger credit amount, monthly payments, more age eligibility, and a fully refundable credit. Overall, this is good news for parents. Like most tax code updates, this child tax credit will certainly cause some confusion. These two visuals should help outline the general updates as well as an example of how the updates would impact the fictitious Mohamed family of four.

As you can see, the Mohamed family is expecting to receive both more money and money sooner than they did last year. However, they will receive a $3,000 credit at the time of their tax return compared to $4,000 in 2020. Given the complexities of the new child tax credit, our team will continue to publish information on this topic in the coming months.

Robinhood Reveals Revenue

Robinhood recently publicized their financial statements in preparation for their Initial Public Offering. In their S-1 public filing, Robinhood disclosed that more than 50% of their users are first-time investors. That comes as no surprise given their reputation of being a democratizing platform. Over the past several months, our team at Human Investing has fielded more commentary about investing with Robinhood than ever before.

Prior to the release of the S-1 public filing, it was easy to imagine the average Robinhood investor as someone with a few extra dollars and a desire to buy/sell individual stocks. However, once Robinhood disclosed the breakout of their revenue we can see that most of their earnings (at least in Q1’21) is derived from investors trading options trading options as opposed to buying/selling individual equities.