Stock Market 4th Quarter Turn Around

by

Sometimes it seems like the stock market is just messing with people. After seemingly running off of a cliff to end the third quarter of 2011, the market has recently staged a rally. Take a look at a chart for the Dow Jones Industrial Average and you’ll see a low point on October 3, 2011. It’s almost like the market wanted to make sure that your third quarter statements looked bad before any sort of upward movement. Of course, there is a long way to go until the end of the year and pressing economic matters like the debt crisis in Europe, the joint budget cutting committee and an unemployment rate that won’t go down are still to be resolved. For the time being, non-day trading investors should remember that short-term movements in the stock market are notoriously difficult to predict. End of Year Portfolio Rebalancing Many experts recommend rebalancing your long-term portfolios like retirement accounts (IRAs, 401k, and other retirement plans) once a year. Traditionally, many people do it near the end of the year. If you haven’t rebalanced your portfolio since last year, it’s a good time to start thinking about doing it soon.

2011 Stock Market Update Q3

by

The third quarter just closed on September 30th and it was not a pretty sight for short-term investors. The S&P 500 closed at 1,131.42 which is down 14 percent for the third-quarter. It started the year by opening on January 3rd (the 1st and 2nd were Saturday and Sunday, respectively) at 1,257.62.  That is a drop of a little over 10 percent year to date. The Dow Jones Industrial Average is off 5.74 percent year to date. The stock market took a huge dive starting July 21st and has never pulled itself back up. For those of you looking for the culprit, let me help you out. The debt ceiling deal was reached at the end of July, which means the 21st was pretty much the height of the shenanigans. The markets have had no truly good news since to pull themselves back up by. Outlook for 2011 4th Quarter Stock Market Don’t expect the news cycle to save the stock market during the fourth quarter of 2011. In the 4th quarter, we’ll see increasingly competitive rhetoric building in the Republican Presidential primary, the product of the debt ceiling committee, which most are projecting will fail, and the start of …

Read More

Is Groupon Public Yet?

by

Has Google Already Beating Groupon? Not long ago, Google offered to buy Groupon for $6 billion. Soon thereafter, Groupon did another round of private equity financing that essentially paid off company founders and early investors such that they have already locked in sizable gains. That might be a very good thing since Groupon seems to be in trouble before it even goes public. Update: Groupon has updated its IPO filing documents again. Follow the link for the latest. Groupon’s IPO Filing Groupon has already had to adjust the documents it originally filed in order to do an initial public offering (IPO) of stock. It de-emphasized a widely mocked financial metric that essentially didn’t count certain expenses. That isn’t a huge thing by itself, although it does potentially show what Groupon thinks of the sophistication level (or lack thereof) of those who would buy Groupon’s IPO. Groupon’s management took the somewhat controversial step of trying to comment on all the negative publicity its IPO has been getting by sending out a company-wide email to employees saying exactly the kinds of things that you aren’t allowed to say during the SEC mandated “quiet period” before a public offering. Of course, they were …

Read More

Can The Fed Really Be Treasonous?

by

Recently, newly official Presidential candidate Rick Perry suggested that it would be "treasonous" for Ben Bernanke and the Federal Reserve to "print more money" in order to play politics. If you want the political dogfight over the comments, check your regular media outlet. However, the comments highlight a fundamental misunderstanding that most Americans have about the Federal Reserve Board and its power over the U.S. economy. Before we get into that, however, it seems that there is a glaring lack of logic in both Mr. Perry’s comments and the media reaction to them. If the Fed can fix the economy to such an extent that the recovery might alter the outcome of the election, whenever it chooses to do so, wouldn’t it be more treasonous to not be doing it right now, or say, six months ago? In other words, if just turning on the printing presses would make a meaningful improvement to the economy, shouldn’t (wouldn’t) they be doing it right now instead of letting the U.S. economy stall, its citizens suffer and allowing other countries to gain strength at America’s expense? The Fed’s Real Power The truth is that "printing money" or other fiscal stimulus can only accomplish …

Read More

Crazy Week for Economy and Investors

by

The beginning of August has brought nothing but turmoil to investors and the economy. Politicians played chicken with the debt ceiling despite the warnings of every single non-politician who knows even a little bit about economics. Although a deal was reached to raise the debt ceiling at the last minute, it was too late. Americans, and the rest of world, are rightly asking can Washington do anything now that it is so polarized into camps of us and them. That uncertainty comes at an inopportune time since there is already so much uncertainty surrounding the current state of the economy. Next came the downgrade of US debt by Standard and Poors. Make no mistake, this was a political, public relations ploy. The original S&P U.S. downgrade played up a very high percentage of debt to GDP, and even gave a number at which things would be "good enough" for the United States debt to not get a downgrade. However, when a math error that was big enough to move the number well into "good enough" territory was discovered, S&P downgraded U.S. bonds anyway, making many wonder what S&P bond ratings are even based on. The company may have damaged its …

Read More

Latest Citibank ThankYou Rewards Premier Card Offer

by

Over at one of my favorite deal news websites, I noticed that Citibank is offering a bunch of bonus points for people who sign up for their ThankYou Premier rewards card as its latest Citi rewards card offer. As regular readers know, I don’t recommend that people go chasing after credit card rewards or applying for new credit cards just to get credit card points or miles. If, on the other hand, you are currently in the market for a new credit card AND you are looking for a rewards credit card, this offer might be interesting. First, off, be sure to read all of the fine print in the credit card agreement as well as my Citibank ThankYou Premier rewards card review. On of the big things you will want to note is that this card comes with a very steep annual fee. That should knock it out of the running for most people, but if you tend to rack up a lot of spending on a card for whatever reason, you might be able to make money by earning more rewards than you pay for the annual fee. Second, although the ad claims that you can get $500 …

Read More

Reporting Short Sales for Income Taxes

by

Reporting most investment income is pretty straightforward. Calculate the gain or loss and enter it on Schedule D. The only trick is whether to report as a long-term or short-term capital gains or capital losses. With short sales, however, there are a couple of tax tricks to know about how they get reported. Long-Term or Short-Term Short Sales The most important thing to understand about short sales, is that they are almost always considered short-term capital gains or losses. Unlike a traditional investment where you buy and hold the property, with a short sell, you do not own the property at all. You borrow the shares from your brokerage who gives you the proceeds of the sale. You close the sale by buying back the same shares you sold. It may seem like you determine whether a short sale is long or short-term by the amount of time that passes in between when the short sale is initiated and when it is closed. However, this is not the case. In order to be a long-term capital gain, you have to OWN the property in question for more than one year. With a short sale, you never own the property. Or, …

Read More

Save $1 Gallon on Gasoline with Grocery Cards

by

There is a battle brewing between Grocery Store chains that will benefit savvy customers. Recently, King Soopers made news in the Denver, Colorado area with its rewards program offering up to $1 off each gallon of gas purchased at King Soopers’ gas stations or affiliated Loaf n Jug gas stations. Basically, each dollar spent when using the grocery store’s loyalty card, called SooperCard, earns one point. When you have 100 points, customers can get 10 cents per gallon savings on gasoline purchases. Safeway has a similar program. King Soopers Gas $1 Off Program The waves started coming when King Soopers upped the ante this summer. Typically, customers with more than 100 points simply start earning another discounted trip to the gas pump. For example, a shopper who spent $200 on groceries would earn two fill-ups with a 10 cent discount. For many shoppers, this accrual rate is higher than how fast they purchase gas. The program rewards reset every quarter, so many households don’t use all of their 10 cent off gas rewards. Recently, however, King Soopers changed the deal to allow rewards to accrue for multiple 10 gas discounts on a single fill-up, up to $1 per gallon discount. …

Read More

New Home Sales Rise

by

Sales of new houses rose 7.3 percent, to 323,000 annual pace, the highest level in 2011. Of course, this comes on the heels of a record low just two months ago. New home sales statistics are quoted on an annual basis. In other words, if April’s new home sales numbers were what the new home sales numbers would be for every month of the year, how many new homes would be sold. So, the 323,000 new homes sold number means that there would be 323,000 new homes sold for the year. There are two important things about this latest economic data and how it will affect investors and the economy. First, the number is slightly higher than what economists were expecting. Any time a number surprises to the upside, that is good news, because it means that things were actually better than everyone thought. Second, while the number is higher, it is still very weak, meaning that IF the housing market is recovering, it is doing so very meekly. The big problem for new home sales is that there are so many existing homes for sale on the market today. Foreclosures and distressed owners continue to flood the housing market, …

Read More

April Jobs Report Could Have Big Impact On Stocks

by

The April jobs report is due out from the U.S. Labor Department on Friday. While economic statistics typically have a temporary effect on Wall Street before being shoved aside by whatever bit of news or data arrives a few days later, the April jobs number could be a bigger deal than usual. Recently, the Federal Reserve left interest rates unchanged. Following the announcement, Fed Chairman Ben Bernanke held the first ever Fed press conference in which he laid out the Fed’s view of the U.S. economy. He suggested that the economic recovery is slowing. He didn’t use the word fragile, but plenty of people heard it anyway. He also suggested that inflation was tame and that any uptick was dwarfed by the greater potential for a slowdown in growth. Jobs Key to Economic Recovery Business spending has been measured, despite a tiny boom going on in Silicon Valley. Consumer spending has been whacked by not only by widespread job losses, but also by the housing market crash and subsequent collapse of the mortgage industry. Many homeowners have no equity left in their homes. Those that do are finding that terms for second mortgages are no better than the difficulties faced …

Read More