|How much money do you spend to protect your valuables or other tangible assets? Most people understand the importance of automobile insurance, homeowners insurance, and additional coverage for items or collections of significant value. While tangible assets such as cars, homes, and jewelry may be worth a lot, their income-producing value is often negligible. In this respect, your true wealth, and perhaps your greatest asset, is your future earnings potential. (more…)|
|Many people focus their efforts on increasing their financial resources, yet they may give relatively little attention to protecting those assets once they are accumulated. However, without the proper legal protection, the financial security you have worked long and hard to build could easily be threatened by an unexpected lawsuit. (more…)|
|When you are applying for a job, demonstrating relevant experience and acing the interview may not be enough to secure the position. Regardless of the type of job you are seeking, you could be turned down by an employer because you bounced some checks or were late in paying your bills. Concerned about theft and liability issues, growing numbers of employers are running credit and other background checks on job candidates before making offers of employment. (more…)|
It‘s 2012 and although the stock market as measured by the S&P 500 has rallied over 100 percent from its March 2009 lows, gas prices hover near all-time highs, food prices seem to go higher with every trip to the grocery store, and yet the Federal Reserve continues to maintain interest rates near historically low levels, impacting those who need income the most–retirees. (more…)
“If history repeats itself, and the unexpected always happens, how incapable must Man be of learning from experience. “ George Bernard Shaw
In many ways, the 1970’s were no different than other decades in American history. It saw its fair share of fads: the Pet Rock, platform shoes and jogging suits. It also saw its fair share of successes: Mark Spitz won seven Olympic gold medals, US astronauts explored the moon, and Hank Aaron broke Babe Ruth’s homerun record. It also experienced a handful of disasters: the 1973 oil crisis, the Beatles broke up, the Watergate scandal and most notably, from an economic standpoint, stagflation. While the present decade remains in its infancy, it’s beginning to display some very eerie similarities to the 1970’s, specifically in regards to stagflation. (more…)
As previously discussed, my five economic icebergs remain afloat. Global inflation is still accelerating. Growth, both domestically and abroad, continues to slow. The jobless rate remains stubbornly high while the economy remains stagnant and the cost of living continues to rise. Balance sheets, whether on a local, federal or global level, continue to deteriorate. Most importantly, housing has yet to bottom. While the current headlines focus on Greece, and rightfully so from a global economic level, we here in the U.S. are turning a blind eye to the one issue most important to our economic well being: the housing market. Home values are critical in determining household wealth and impacting consumer confidence. Furthermore, home building and construction are huge factors in terms of the number of jobs they create. Therefore, we must stabilize housing if we hope to stabilize our economy. (more…)
In February, I highlighted five themes, called “icebergs”, that could have a chilling effect on the global economy: Global Inflation Accelerating, Global Growth Slowing, Jobless Stagflation, U.S. and Municipal Balance Sheets and Real Estate Double Dip. Since then, the stock market as measured by the S&P 500 had remained resilient, despite a backdrop where all five icebergs remain intact. (more…)
Prior to 1977, the U.S. Federal Reserve had only one main job: maintaining price stability.
In a 1996 speech before the Economic Club of New York, William McDonough, president of the Federal Reserve Bank of New York at the time, was quoted as saying, “Price stability is both important and desirable because a rising price level–inflation–even at moderate rates, imposes substantial economic costs on society. All countries incur these costs.”
However, stagflation of the 1970s inspired politicians to assign the Fed another task: promoting maximum employment. At the height of the economic crisis in 2009, in light of its dual mandate, the Fed took extraordinary measures, later to become popularly known as QE1 and QE2, with the intention of spurring economic growth that would ideally lead to higher employment. However, while the Fed’s recent policy actions have had a significant impact on the S&P 500 over the last two years, it has begun to generate considerable inflation while having done little to create meaningful job growth. (more…)
Getting married is exciting, but it brings many challenges. One such challenge that you and your spouse will have to face is how to merge your finances. Planning carefully and communicating clearly are important, because the financial decisions that you make now can have a lasting impact on your future. (more…)
Over the last 2 years the return on the S&P 500 has been nothing short of titanic. With the S&P 500 returning nearly 90 percent from the March 2009 lows to the end of 2010, like the Titanic, many are beginning to feel that the markets have become unsinkable. Aside from some occasional volatility, the waters of the S&P 500 have been fairly calm and consistent providing back-to-back double-digit returns in 2009 and 2010. Today, some analysts are forecasting for a third consecutive year of double-digit returns for the S&P 500 in 2011. Throughout history, it tends to be times like these when complacency sets in and investors fail to look ahead at certain “icebergs” lurking in the waters. While a third year of double-digit returns isn’t out of the question, when the collective is full speed ahead, as a risk manager it’s important to be aware of the considerable icebergs in front of us that may have the potential to sink the Titanic.