The economy is disproportionately affecting lower-income households and higher-income households. The rich, as they say, are getting richer. Many of the not-so-rich, sadly, still need assistance. Let’s face it — if you are reading this column, you are probably well-educated and successful. Most well-educated, successful people are also generous. Generosity is often directed by awareness. I know it’s seemingly callous to consider the economic ramifications of homelessness or lower-income households on investor portfolios. But it’s the very kind of impact that I will continually address, both in this column in “numbers” as well as in my commitment to addressing the…
Insights & Advice
Financial Planning
Bitcoin is…
Bitcoin is “disgusting and contrary to the interests of civilization.” —Charlie Munger, vice-chairman of Berkshire Hathaway When I was 17 years old, I bought shares of the Stop & Shop Supermarket Company (that grocery chain is now part of the Ahold Delhaize conglomerate). Being the kid I was, I held it only long enough to make the money I needed to buy the computer and the mountain bike I wanted. Stop & Shop wasn’t the only stock I considered. I remember ruling out Berkshire Hathaway because I didn’t have the $6,000-or-so to buy one single share. Maybe I should have split more wood…
Stocks hit with possible tax hike
It was a losing week for stocks. Most of the blame can be pinned on a proposal by the Biden Administration to double the capital gains tax on investments. It is not official yet, but investors are counting on an announcement next week. Before you hit the sell button on all those huge capital gains you have accumulated over the last few years, know the facts. Right now, there aren’t any. What we do know is that Joe Biden ran his winning presidential campaign on increasing taxes on the rich and on corporations. He plans to do just that, so…
Selling dirty
According to a survey performed by AlixPartners (AP), U.S. consumers are the “most anxious” about their health and finances. Chinese consumers rank the lowest in terms of anxiety pertaining to those issues. AP’s April 2021 survey concluded that “half of all global consumers say their spending habits have changed permanently due to the pandemic.” Whether you are a business owner or an investor, it is essential to understand where consumer spending will be directed. To figure out the “where,” we have to understand the “why.” According to the AP survey, nearly one out of every three U.S. consumers identified as being very…
Hope for parents of college bound students
Jobs and jabs
Bank of America (BoA) has been tracking the credit card use of clients who received the stimulus payments authorized by the American Rescue Plan (ARP). For the seven days ending March 27, 2021, aggregate credit card spending was up 82 percent from a year ago. Where is the money being spent? Everywhere. Furniture stands out, which reflects the heated home-building industry. And then electronics, clothing, airlines, home improvement, and restaurants (in that order of year-over-year growth). The two-year percentage change tells a better story because the world came to a halt the week of March 27, 2020. For the seven…
Stocks grind higher as bond yields retreat
April is usually a good month for markets. Historically, it is one of the three best months of the year for equities. We all know what happens in May (‘sell in May and go away’) but we will worry about that later. Over in the bond market, the bond vigilantes may have started to doubt their conviction that inflation is a fait accompli and so yields must go up. This week, yields declined a bit, which gave a boost to some sectors (gold and silver, for example), while banks pulled back a little. But Friday’s Producer Price Index report for…
Preparing Teens for Financial Adulthood
Learning how to properly manage money is a crucial life skill that can take years to develop. For teens who may be earning an income for the first time, there can be a steep learning curve when it comes to financial literacy. Laying the foundation for this education early can help establish healthy financial habits that carry into adulthood. You can guide your teen by teaching them the basics of money management at home to help them build a strong foundation of financial literacy and avoid financial pitfalls along the way. Foster a habit of saving Whether it’s an allowance…
CAPITAL IDEAS: Where is my ‘stimmy’?
A “stimmy,” according to Merriam-Webster, is a slang term that refers to the stimulus payments made to Americans as part of COVID-19 relief packages. There’s not a lot of good data on how Americans have, so far, spent their 2021 stimmies. As an investor, it’s a good idea to consider where some of that roughly $400 billion in checks from the $1.9 trillion American Rescue Plan (ARP) will flow. Perhaps it will go where it has gone before? An October 2020 Federal Reserve study found that 29% of the first round of stimulus checks were spent. Of the amount spent, nearly two-thirds…
Will infrastructure spending boost clean energy stocks?
Renewable energy stocks were all the rage last year. This year, however, not so much, with clean energy funds taking hits of between 25-50%. Will President Biden’s proposed $3 trillion infrastructure bill breathe new life into this sector? President Biden ran on a platform that included the build out of an infrastructure plan that would “achieve net-zero emissions, economy-wide, by no later than 2050.” By the time of his November election last year, investors had bid up the clean energy sector, which includes everything from electric cars and clean water to solar and wind power, by over 200% in some…
CAPITAL IDEAS: What a year
“It was the best of times, it was the worst of times … it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.” — Charles Dickens The year 2020 was dreadful. Our neighbors, friends, and family lost jobs as the economy struggled with COVID-19. Tragically, some of us lost loved ones to the virus. I keep those losses in mind as I review the year for the stock market. My intention isn’t to spike the ball in celebration of how well the stock market performed. Instead, it…
Cross currents confuse investors
You would think that with a $1.9 trillion spending package, an increasing rate of coronavirus vaccinations, and a potential $3 trillion infrastructure package waiting in the wings, the market would be at record highs. The fact it is not should tell you something about the indecision plaguing investors. When good news fails to impress, it usually means stocks (or at least some stocks) are headed lower. That should come as little surprise to readers. I advised investors to raise cash last month in preparation for what I see as a buying opportunity this month. The challenge: when do you put…
Financial Femmes
As a 24-year-old woman, when I tell people I’m a financial advisor, I sometimes get some squints and questioning looks. Or even a face that suggests “aw, how sweet.” Little do these people know, females are a massive presence in the finance space. Yet, according to Cerulli.com, 18.1% of financial advisors are women. Do those statistics represent what you see when you look around your community? Of course not. So why is the financial field so heavily dominated by white men? Well, this may come as a shock to you, but much of the world is as well. Women couldn’t…
Rising rates create headwinds for stocks
The saga of rising interest rates in the long end of the U.S. Treasury market continued this week. Investors, fearing runaway inflation, sold both bonds and stocks. Will the selling continue, or is this a buying opportunity? It depends upon which asset class we are talking about. Yields on the 10, 20, and 30-year U.S. Treasury Bonds, I believe, will continue to rise. How far? It is possible that the benchmark “Tens” could finish the year at 2%. In the short-term, however, I expect yields to fall a bit on profit-taking. Last week, I warned readers that the rise in…
Tech stocks rise from the dead
The large cap technology sector bounced back this week as bond yields fell. It is a see-saw market filled with several cross-currents. But if you want to know where stocks are going, keep your eyes focused on the U.S. Ten-Year Bond yield. In my last column, I explained how rising bond yields are like kryptonite to the continued performance of what I call “super tech stocks.” During the last two weeks, the NASDAQ 100, for example, experienced a 10%-plus down draft, as bond yields rose to 1.60% from 1.25%. Investors sold FANG stocks, and technology shares in new-era sectors, like…
Women and Wealth: Taking Charge of Your Finances
When it comes to financial planning, women are likely to face different challenges than men. For one, they earn less than men on average, and they’re more likely to work part-time jobs or take time away from their careers to raise children and care for family. Less income means less money to devote to savings On average, women earn just over $0.80 on the dollar compared to men, leaving them with less money available to pursue financial goals, like saving for retirement. If you work in a job that offers a retirement plan, such as a 401(k), be sure to…