- - Page 6 of 11 The Finance Gourmet

Is The Stock Market Really Overvalued?

April 13, 2017 by Finance Gourmet

Hang around the world of finance very long, and you’ll see history repeating itself, especially when it comes to financial news articles. When it comes to a stock market in the middle of an extended rally, all manner of financial and investment analysts turn into Professor Trelawney, seeing the Grim in every cup of tea. The longer the rally goes on, the more pundits who join in predicting a stunning market collapse. The reason is that doing so, is a low-risk way to get your name in the papers, and, if you get lucky, to be labeled a guru based on “predicting” the inevitable stock market crash. Remember the analyst who predicted the muni bond crash that never happened? No? Neither does anyone else, but she built up quite a lot of business based on that publicity before everyone forgot all about her. (And, before she changed her story.) Of course, you can make a name for yourself the other way. Back during the internet bubble, one analyst earned a reputation for “always being right” about the market going higher. She predicted it would go higher quarter after quarter, right on through the top… and after the top… and …

Is Snap a Good Investment?

March 7, 2017March 2, 2017 by Finance Gourmet

Today was the IPO for Snap, Inc., the company that makes Snapchat. As one of those people who doesn’t “get” Snapchat I won’t be analyzing the product or what makes it special. Instead, I’m going to take a quick look at the reality of the financials and let you figure those other parts out for yourself. Snap IPO All IPOs are fairly ridiculous when it comes to pricing, subscribing, and issuing shares. They get doubly so when the company going public is famous enough to attract the type of people who don’t usually buy IPO shares, and in fact, those that actually have no idea how it is done. In these cases, one often sees a huge “pop” in the stock price. Keep in mind that as an individual investor without an established relationship with one of the companies underwriting the IPO you cannot get the IPO price at all. Instead, you could theoretically get the “open” price. So, here is how it works. Established customers got the opportunity to buy into SNAP for the IPO price of $17 per share. Regular investors got their first chance to buy at the open price of $23.71. The stock is now (around …

Apple Stock High Again

November 9, 2021February 14, 2017 by Finance Gourmet

February 14, 2017 Apple stock price hit an all new high. Yea! Cue the people who know me rushing to ask me if I should invest in Apple stock. I’ve written about this before, of course. I also wrote about that Apple earnings miss that made everyone freak out a while back. I took a look and saw that I wrote an Amazon stock vs Apple stock article. I’ll have to re-read that when I get a chance and see if I was right 🙂 As was the case when I wrote those finance articles about Apple, the reality is that there isn’t much different about Apple stock today, that wasn’t also true yesterday, and a month ago. So, just because there is a BIG NEWS story today shouldn’t change your investing strategy. Keep in mind, that this all new high isn’t the result of FINALLY breaking through a long losing streak. The last all-time high for Apple stock was back in 2015. It’s been a few years, but it’s not like this is a long suffering stock, or anything. Is Apple a Buy Here? For years, betting against Apple has been a sucker’s bet. The company seemingly could do …

Dow 20,000

January 25, 2017 by Finance Gourmet

This post will not be long, and there won’t be much analysis. Why? Because, the Dow hitting 20,000, or Dow 20K, as some like to say, is not that important. The reality is that Dow 19,823 is not really any different than Dow 20,107. Round numbers are not magic. So, what’s the big deal? Why Does Dow 20K Matter? I’ve noticed an increasing number of financial publications describing the Dow Jones Industrial Average hitting 20,000 as a “psychologically important” milestone. In other words, it matters for really cool newspaper headlines and not much else. Remember, the Dow is just 30 stocks. Those 30 stocks are all large, U.S. companies, and they change them from time to time for numerous reasons, including when that stock just isn’t very good anymore. In other words, it isn’t really representative of much of anything. But, like a fake credit score from Credit Karma or the like, it is a useful way of getting a general idea of whether stocks are going up or down, and to a lesser extent, by how much. This is why the news often states, “The Dow was up 50 points today…” It’s a quick, no effort, way to say …

Retail Stocks and 2017

January 5, 2017 by Finance Gourmet

Wheee! Well, looks like 2017 is going to be a lot of fun, and by fun, I mean volatile and sketchy all the way through. First up, are announcements by retail stocks such as Macy’s and Sears, both of whom announced that they would be cutting staff and closing stores. Kohls also announced sluggish holiday sales. That means that the 2016 holiday shopping season was not strong enough for a lot of traditional retailers. Look for earnings on the low side, that disappoint Wall Street for most retail stocks. This is a big deal, because this was supposed to be the “up” year for the economy. The stock market is up, closing in on 20,000. Job reports show that unemployment is as low as it’s been since before the Great Recession. The Fed even finally got to raise interest rates in December. If this holiday season wasn’t good, then things maybe aren’t going as well as everyone might have hoped. Of course, it is possible that there was still plenty of consumer spending and it just went different places like online retailers, or specialty stores, but so far, no one is pushing that theory. Trump, The Fed, Inflation and a …

2017 Finances and Money Issues

January 3, 2017 by Finance Gourmet

Welcome to 2017! Relax. Take a deep breath. There. Feel better? Good. Then let’s jump in. Finances Updated in 2017 With a new year, come some new numbers. There will be updates to the maximum 401k contributions, income limits for Roth IRAs, and others. Plus, there will be adjustments to the 2017 income tax brackets, the 2017 standard tax deduction, and more. And, of course, there is a new IRS mileage rate for 2017 as well. What about 529 plans? There aren’t a lot of updates to those numbers each year, primarily because most facets of 529 college savings plans are administered through the states, who aren’t always as keen on changing and updating everything. You’ll want to re-evaluate your financial plan for the new year, and you’ll want to review how your financial plan did in 2016. Plus, you’ll want to rebalance your portfolio, if you didn’t do it at the end of 2016. Retirement Plans 2017 A big part of most retirement plans are tax-advantaged savings accounts like your 401k plan, IRA accounts, and, for some of you, 457 plans, 403(b) plans, and various differed compensation plans. All of those need adjusted and reviewed for 2017 as well. …

What Is a Roth IRA?

June 11, 2019October 3, 2016 by Finance Gourmet

What is a Roth IRA? Is a Roth IRA the best way to save for my retirement? Even the basics in financial planning aren’t always so basic. The basics of IRA plans, is one of those times. IRA stands for Individual Retirement Account. Tthat means it is an account for an individual to use to save for retirement. As an enticement to save for your own retirement, the government gives you tax advantages for using an IRA for retirement planning. As a way to keep you from pulling money out for things besides retirement, there is a penalty if you use IRA money for something else. Roth IRA versus Traditional IRA With a traditional IRA, or just IRA, you get a deduction from your taxes today, unless your income is too high. You also get tax deferred growth on the money in the account. When you start taking the money out, you owe taxes on both the contribution and the gains. If you earn too much money to take the tax deduction on your contributions, then you do not have to pay taxes on those funds again when you withdraw them. With a Roth IRA, you get no tax deduction …

Is There a Market Bubble?

September 29, 2016 by Finance Gourmet

Recently, an increasing number of pundits (and a smaller number of actual stock market analysts) have begun using the word, “bubble,” to describe the U.S. stock market. That chatter has picked up even more lately, when Donald Trump began saying that the stock market is a bubble propped up by the Federal Reserve keeping interest rates low. But, is the stock market really in a bubble? What is a stock market bubble, anyway? How can you tell if there is a stock market bubble? What Is a Stock Market Bubble Really? Let’s start with the fact that you should NEVER listen to a politician (including candidates) when they talk about the stock market or the economy. They are always campaigning, even in off years, and getting people to think the right thing outweighs any allegiance to the truth. In the case of Donald Trump, he is campaigning on the economy being bad, but a rising stock market is shooting holes in that claim. By saying it’s a bubble, he’s trying to imply that it isn’t a REAL sign of economic growth, and that the economy actually is bad. But, beyond politicians, how can we tell if a bubble is real? …

Apple Stock iPhone 7

September 15, 2016 by Finance Gourmet

I write more about Apple stock than I ever mean to, but people just love to talk to me about it, so here we go. New iPhone New Apple Stock Moves Apple stock is one of those stocks that gets a lot of attention, and action, from people who otherwise don’t invest in individual stocks much at all. That is, among your own friends, chances are that there are people who own Apple stock, and nothing else other than some company stock, or maybe some ETFs or mutual funds. These investors are, not surprisingly, often moved by news, other than any sort of analysis. In addition to these investors, there are a lot of very experienced investors with Apple stock in their portfolio, and they both watch the fundamentals, AND try to guess how others will reaction to Apple stock. All of this adds up to a stock that likes to move A LOT based on any single news event or earnings report. For the last several months, Apple stock has not done well. There were concerns that the company could no longer innovate, and the momentum left behind by Steve Jobs had finally run out. But, last week, Apple …

myRA IRA Review – Safe and Legit

August 25, 2016 by Finance Gourmet

No matter how helpful the government could potentially be to its citizens, it typically won’t/can’t get involved in finance because there are huge lobbying dollars behind financial services companies. For example, it would be relatively trivial for the IRS to create a free, online, auto-filing system that would work for most taxpayers, increase tax collections, and be a win-win for everyone involved. Everyone, that is, except for TurboTax, who, obviously, spend millions of dollars each year keeping such a system away from its lucrative tax software business. This is why I was surprised to find out about myRA, a no-cost government Roth IRA program aimed at people who might otherwise have a hard time getting started saving for retirement. What Is myRA and Is It Safe and Legitimate? The myRA account is a government run Roth IRA. As such, it follows all of the same rules as a regular IRA. There is a maximum Roth IRA contribution amount allowed each year. This year, it’s $5500, with an additional $1,000 “catch-up” contribution allowed for people 50 or older. So, what’s the benefit of using the myRA program? The myRA IRA has no start up cost, no IRA annual fees, and just …