Good News for the Economy is Bad for Stocks

In the topsy-turvy, bizarro land of Wall Street, sometimes a bit of good news about the
economy can be bad news for investors. The economy added 200,000 jobs in January,
higher than last year’s monthly average of about 170,000. The unemployment rate
remained at a 17-year of 4.1 percent; and perhaps most encouraging, annual hourly
earnings jumped by 2.9 percent, the fastest pace since the recession. (The figure does
not include special one-time, tax-related bonuses that have thus far helped about two
percent of workers.)

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Work Longer

Five years ago, I wrote an article that warned not to place too much emphasis on the
ability to work longer to fund retirement. The risk was abundantly clear: just because
you want to keep toiling, does not mean that you will be able to do so. For some, there
will be physical limitations and for others, there may not be a job. That’s why nudges
like me encourage you to diligently save during your working years.

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Dollar Dive

Treasury Secretary Mnuchin did not cause the recent dollar dive. His remarks
(“Obviously a weaker dollar is good for us as it relates to trade and opportunities”) at
the World Economic Forum in Davos were surprising, because government officials have
historically not been willing to acknowledge that when the value of the dollar falls, it
makes US exports cheaper. The result can be good for US manufacturers and can also
improve the trade balance.

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Why Don’t Investors Care About a Shutdown?

The Dow closed above 26000 and the NASDAQ finally topped its inflation adjusted high
last week, begging the question: Why don’t investors care about a government
shutdown? The answer may be that they don’t care about lots of risks that exist, but
more specifically, previous periods when Congressional impasses have lead to Uncle
Sam shuttering some of its operations, have not spelled Armageddon for stocks.

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Retirement by Generation

You’ve seen the frightening surveys that say Americans are ill prepared for retirement,
but let’s start the year on a more pro-active foot. It’s time to jump-start your savings
plan and to help out; I’m going to break it out by generation.

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What’s Behind the Walmart Wage Boost?

Mega-retailer Wal-Mart made news last week when it announced that it will raise
starting wages to $11 per hour, will offer bonuses up to $1,000 to many of its workers
and expand maternity/paternity policies. Should the million or so employees who will be
affected by the moves thank the GOP tax cut? The company indicated that changes in
the law were at least partially responsible and certainly the billions that the company
stands to reap from the corporate tax rate dropping from 35 to 21 percent will more
than offset the $700 million cost for the new policies.

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Is There Too Much Focus on Stocks?

A reader wrote to me: “After your recent article about the big questions for 2018, I was astounded that ‘only 54 percent of Americans report having money invested in the stock market at all.’ Does that mean that all of the attention we put on the stock market is misplaced? Are we putting too much focus on stocks?”

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Four Money Questions for 2018

2017 was a year that defied most expectations. Synchronistic global growth led to a surge in corporate profits, which in turn pushed worldwide stocks higher. The FTSE All-World index shot up nearly 22 percent, its biggest rise since 2009. US markets were along for the ride: The Dow Jones Industrial Average increased by 25.1 percent, the broad S&P 500 index was up 19.4 percent and the NASDAQ Composite jumped 28.2 percent. The Russell 2000 index of small companies, which was the big winner in 2016, put in a more than respectable 13.1 percent return.

BlogMark TalercioJanuary 1, 20182018, money, cash, debt, retire, retirement, finance, invest, investment, investing

2018 Financial Resolution: NO BUDGET

A colleague of mine recently asked me how he might be able to finally stick to a budget. For years, he had tried to create and adhere to a specific annual spending plan, only to blow a hole through it at some point during the year. “What’s wrong with me? I know that I should do it, but there’s always something that comes up!”

BlogMark TalercioJanuary 1, 2018budget, money, cash, debt, 2018, finance, invest, investing, investment, retire, retirement, mint, financial resolutions

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