stock market

Jobs Looking Good for September

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Every time a jobs report, or other important economic numbers, come out politician run screaming into newsrooms across the country to spin it so that it says what they want it to say. If you want to know what economic data really mean, ignore the politicians. On Wall Street, investors put their money where there mouth is. Spinning for an investor is the same thing as deliberately losing money. While a politician is more than happy to say something that isn’t true, no investor is willing to throw away their cash for the sake of appearances. September Jobs Report Is Good News The stock market is up 206 points as I write this. No matter what some politician says, this was good news. In some places, they are calling this the “Goldilocks” jobs report. It was not too hot, and not too cool. The economy added 248,000 jobs and the unemployment rate dropped below 6 percent to 5.9 percent. Wall Street wants job growth; they need job growth. An economic recovery can’t go anywhere with too many people unemployed. However, job growth can mean inflation, and no one wants inflation. More accurately, no one wants the Fed to worry about inflation and start …

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Mid-Year Review 2014

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Here it is, June 2014, the middle of the year. So, what do things look like for your personal finances in 2014 at the half-way point? Let’s jump right in and find out. 2014 Taxes You’re going to pay taxes in 2014, and in every year until you die. Right now, is a good time to handle a few tax issues before the second half of 2014 gets rolling. First, use the IRS withholding calculator to see if your tax withholdings are set properly. Grab a paystub and enter your information for so far this year. Add in a best guess of your various income tax deductions, or use last year’s tax forms to make estimates. Of course, if you prefer, you can use the 2014 standard tax deduction rate as well. Either way, if you are way off on your withholdings (you’ll owe a fortune, or get a fortune back as a refund), it’s time to submit a new W4 form to your employer. Grab your nearest HR person and ask for one, or just get one from the IRS website and turn it in. You only need the bottom part and filling in the worksheet is not necessary, …

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Coming to FinanceGourmet – Personal Finance Blog

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This coming week, we have some interesting new articles for Finance Gourmet to help with frequently asked about and requested personal financial health topics. First up, as May draws to a close, June marks both the end of the second quarter, and the midpoint of the year. What kinds of things should you be aware of at this point for optimal financial health? We’ll discuss quarterly tax payments, how the markets are looking at the half way point, what things you might want to be thinking of for minimizing your taxes, and more. Next, we tackle signing up for a 529 plan, step by step. Not long ago, I wrote about how a financial planner can help keep you from getting stuck on your financial planning actions such as setting up a 529 plan. But, when you can find them, a detailed step-by-step guide to setting up financial accounts such as a 529 plan can be just as valuable. We’ll give you a detailed guide on how to open a Colorado 529 plan, including how to fill out all the Colorado 529 plan forms to set up an account. Then, we’ll look at some of the new IRS numbers that …

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Apple Earnings Dividends and Stock Split

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Apple is one of those companies that draws more than its fair share of attention. There are both the so-called fanboys, and plenty of haters out there to talk at high volume whenever the company does anything. However, the company is also a key component of the S&P 500 and most NASDAQ indexes. In other words, what Apple does as a publicly traded company matters to your personal finance. Apple 2014 Q2 Earnings You’ve probably seen the news by now. Apple had what many analysts are calling a blockbuster quarter. In particular, analysts were surprised by the increase in Apple’s revenue for the quarter. In a way, this is just further proof that analysts don’t really have any sort of crystal ball that regular investors don’t. Apple long ago stopped giving guidance to Wall Street. Without that guidance, Wall Street really doesn’t have a clue how things are going for Apple beyond what things like channel checks can tell them. If you want to read about Apple’s second quarter earnings, there are several reasources including Marketwatch, and Apple’s investor relations website. However, for long-term investors in Apple stock, the quarterly earnings are not the story. What is the story is …

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Unemployment Hits 7% for November

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Unemployment numbers for November were released today. The unemployment rate hit 7.0 percent for the first time since November 2008. If your recent economic history is a little fuzzy, that’s right about the time the banking crisis and housing market implosion was a full tilt. In other words, we’ve been over seven percent unemployment since the so-called Great Recession started. I get  a lot of questions about economic news stories. In particular, people want to understand the significance of the various economic statistics that come out better so that they can separate real new from hyperbole. So, let’s take a look at these unemployment numbers and see what the deal is. What Is the Unemployment Range? First, off, it can be hard to overstate how important unemployment (or more accurately, employment) is to the overall well being of the economy. I’ve covered before what makes unemployment numbers so important, so we’ll leave that out for today and focus instead on what is going on here, and why it matters so much. One question I get from time to time is why people get so excited over small movements in the numbers. That’s a good question. It can help to have …

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Goldman Sachs Report Card Accountability

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There is precious little accountability in the world of stock market analysis. I’ve written before about how Goldman Sachs’ chief market analyst (at the time) predicted an up year for stocks during every single year from before the internet bubble burst through to when she finally stopped making market predictions after again predicting  a higher stock market for 2008. If you’re recent market history is a bit fuzzy, 2008 was a disastrous year for stocks and the start of the so-called Great Recession. Even where there appears to be accountability, it is often easily gamed. Analysts get rankings from various financial groups, but those are often laughable. If an analyst has a “Buy” on a stock and that company reports after-hours that its main product slaughters babies by the thousands, when the analyst cuts his outlook before the market opens, he gets credit for shifting his prediction before the ensuing drop in the stock price. So, it was a little breath of fresh air, when MarketWatch decided to take a quick look at the report card for Goldman Sachs’ 2013 investment recommendations. Goldman Sachs 2013 Investment Calls Report Card Remember in elementary school when the teacher had you self-grade some papers. You …

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What Are Expected Earnings?

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It’s earnings season again, and interest in running high in many companies including technology giants like Amazon, Apple, Facebook, and so on. With each earnings report, there is typically commentary noting how the company’s actual reported earnings ended up comparing to the expected earnings. This phrasing comes up so often, that most investors are used to the terminology long before they actually make any investments, but it is useful to understand just what expected earnings are, and who it is that generates those estimates. How Companies Report Earnings Publicly traded companies are required to issue financial reports about their company on a regular basis. These earnings reports are generated and published each quarter. In addition, companies generate an annual financial report, which typically accompanies the fourth quarter earnings report. There are very specific rules that govern when and how a company can disclose “material information.” A company’s financial information is most definately material. The basic rule is that companies may not make any disclosure of material information without doing so publicly. Just what counts as public has evolved slowly over the last few years, but the basic point is that all investors must get the same information at the same …

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Investing the Government Shutdown

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Too many investors try and ride short-term news events and rumors as a way to make easy money. It seldom turns out that way. Take the current government shutdown. Conventional wisdom says that Wall Street hates uncertainty. Furthermore, a lengthy shutdown could disrupt the still fragile economic recovery. Add that to the upcoming fight over the debt ceiling and you should have a plunging stock market. Funny thing, the stock market isn’t really going down. Stocks and the Shutdown of the US Government The problem, of course, is that we’ve seen this show before. Recently, Congress and the President took both the debt ceiling and funding the government to the wire but eventually reached a deal. While political partisans go red in the face discussing who won and the lost, the reality is that the overall economy, and by extension Wall Street, really doesn’t care how the pie is sliced up, as long as there is a pie. The only real concern for investors is that the instability at the government level will eventually bleed over into Main Street and Wall Street. Some may argue that is happening right now, but the fact is, no matter how long it seems, …

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Why the Buying Company Stock Price Goes Down

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The deal where Yahoo is buying Tumblr got me thinking about a question that I get asked whenever there is a big merger or buyout between companies. Often, when one company buys another company, the buying company’s stock price goes down in reaction to the news. Why does the acquiring company stock price go down so often? Stock Price Reaction to Buying Another Company Investor reaction to deal of Yahoo buying Tumblr was understandably muted. First, Tumblr is not a publicly traded company, so there is no way for its stock price to react at all. Second, at a reported price of $1 billion the acquisition isn’t exactly a blockbuster deal in terms of size. However, when one publicly traded company buys another, there is often an immediate dip in the share price of the acquiring company. Before we get started on exploring why the buying corporation’s stock goes down, it is important to remember that stocks do not trade in a vacuum. There are millions of people buying and selling stocks, with millions of different objectives, millions of different time frames, and millions of different investment philosophies. At any one time, any of those competing motivations can affect the price of a company’s stock. However, …

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Why Employment Numbers Matter So Much

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Employment numbers, or unemployment numbers depending upon your perspective, are a very important metric for the U.S. economy. As such, investors watch monthly employment reports released by the government very closely. But, why is the rate of employment, or unemployment, so important to the economy and Wall Street? At the very macro level, the American economy is made up of two parts, private spending and government spending. Broken down further, private spending can be split into spending by business and spending by individuals. In this country, spending by individuals makes up the largest part of economic spending. In a very real way, whatever direction consumer spending is going in, the economy is going in as well. Some times, there is a lag, but generally, if consumers are spending less, then the economy is shrinking. While it is true that people who are unemployed will be spending less money, their presence actually creates a bigger effect on the economy. When you see on television that a company is laying off workers, that impacts your mental state on a certain level. If the company isn’t in your state and not in your industry, it may barely register. On the other hand, if …

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