Are You Ready To Buy A New Home

Are you ready to buy a new home, especially if it is your first home. In the past, starter homes were bought that were small and as the family grew so did the homes, but today many people struggle to come up with the down payment for a first home. They may wonder if it’s smarter to wait and save more money so they can buy a home that makes more long-term sense, or go the other route, buying a starter home and planning to stay in it for more years.
It’s a personal, practical and financial decision, but here are some pros and cons of buying a starter home.
Pro: Build stability quicker
Lots of lessons come from home ownership. It exposes you to a new set of decisions and circumstances.
One surprise benefit that strikes most people is the stability they feel when they become homeowners. They might feel more grounded, and a part of a larger community. After making a few cosmetic changes to make a home “theirs,” many new homeowners find they enjoy nesting at home, having friends over, and enjoying their own space.
Con: Buying twice means moving twice
Think you’ll be ready to upgrade in just a few years? It might be more cost-effective to save and stretch for the larger house, so you can stay in it longer. Although mortgage rates are low, there are costs associated with buying and selling a home: title insurance, inspections, brokerage commission, along with a handful of loan fees. Plus packing up and moving twice can be expensive and exhausting. Some prefer to pick one house for the long haul. While staying put and continuing to rent may seem wasteful in the short term, it might be a more strategic move.
Pro: Build equity sooner
Although not the guarantee it was a generation ago, odds are good that when you get into your first home, you can realize some equity. If you can commit to at least five to seven years, there’s a chance you can come out well ahead. By making improvements that add value, you can take the equity you’ve built and apply it as a down payment on the next home. In essence, the starter home might help you purchase your dream home. Improvements really help in equity and builds down payments. Just a little extra money and a lot of work can give you those necessary improvements to a house that didn’t cost you so much. The most important thing to check is the age of the furnace, roof, hot water heater, and AC before buying. Even if the house is older if those are newer you are ahead.
Con: You may spend more than you planned
There are soft costs to home ownership. Property taxes and mortgage payments aren’t the only expenses to owning. You’ll need to furnish your new home, purchase window coverings, and pay for landscaping improvements.
You’ll likely want to paint, refinish the floors, or change the carpet before moving in. And, you’ll surely make mistakes along the way by hiring the wrong contractor, making a poor landscaping decision, or mistakenly waiting to install the new AC condenser.
Some parts of home ownership are trial and error. It adds up. You might be better off avoiding those expenses by renting and saving for your long-term home.
Pro: Start realizing the tax benefits
When you own a home, the interest portion of your monthly mortgage payment can be written off, dollar for dollar against your income. If you spend $1,000 per month on mortgage interest, at the end of the year, you can deduct $12,000 off your taxes. Sometimes just keeping an investment in a home helps you at tax time. In my case I get all my taxes back, but with other it might prevent you from paying any.
When you pay rent, the money goes to your landlord, and that’s it. The sooner you own, in theory, the faster you can save some money – perhaps toward your next home. Also your landlord has control over your house and when there are problems sometime getting the landlord to fix them can be a problem.
Con: Home ownership isn’t a sure thing
The world moves at a faster pace today, and that affects home values. Just a generation ago, people stayed closer to home, got married earlier, stayed married forever, and kept the same job through retirement. Today, people choose to stay single longer, and may even purchase their starter home solo. Divorce rates are higher, the global economy moves people all over the world for work, and we prefer to stay more mobile. That means home ownership may not be part of the equation. What happens if you buy your starter home and then get a job transfer, divorce, or the opportunity of a lifetime to live abroad? You might be stuck being an accidental landlord or selling your home at a loss. It’s up to you
If you play your cards right, you can get into the starter home sooner rather than later and make a smart financial decision. If you buy the right first house, are open to building sweat equity, and plan to hang out there for five to seven years, there’s a good chance that you’ll have made a smart move. This decision will enable you to get into a larger home, in a better neighborhood or school district, or maybe just your dream home.
Home ownership is a personal choice, and there is no one path to take. Stick within your comfort zone, and always go with your gut when you know the answer to the question. Are you ready to buy a new home?

Does Your 401K Plan Have Hidden Fees

 

What investors do not know or understand about hidden fees in their retirement plans is really hurting them.
Imagine walking into your favorite clothing store, where curiously, not a single item has a price tag. You grab what you want, but when you reach the register, the cashier refuses to tell you the price. Instead, he grabs your credit card and says, “Just trust me.” This ridiculous example illustrates the essence of how the multi-trillion-dollar 401(k) plan industry operated for decades. Does your 401 K Plan have hidden fees you don’t know about just like going into that clothing store.

For nearly 30 years the 401(k) plan industry wasn’t legally required to explain exactly how much it was charging investors. Only in 2012 did the government finally force providers to make detailed disclosures of how much they were taking from your hard-earned savings. In what other industry, or universe, would this ever be tolerated by customers? Five years later these ultra-complicated disclosures still exist, but they aren’t generating the awareness intended. Instead of digging through the fine print, most plan participants simply trust that their employers are looking out for them. Why is it we don’t seem to want to know what is happening to our money. Our we all so well off and trusting, we don’t need to know what is going on in our accounts.

Sadly, a recent industry survey showed that 67 percent of Americans believe they pay no fees in their 401(k) plan. Of course, nothing could be further from the truth. This is the equivalent of believing fast food contains no calories. In 2015 the Obama administration announced that hidden fees and backdoor payments were costing Americans $17 billion per year. And that’s not counting the excessive “out in the open” fees that are draining our retirement accounts. The Department of Labor also started sounding the alarm. “The corrosive power of fine print and buried fees can eat away like a chronic illness at a person’s savings,” said Thomas E. Perez, Labor Secretary under President Obama.

Do investors really understand their own risk tolerance? Make no mistake: These fees do matter. To that point, a 1 percent reduction in fees can add an additional 10 years to your retirement income. If two people have the same 7 percent return over time but one pays 1 percent in fees while the other pays 2 percent, the latter will run out of money 10 years earlier. Any financial expert would agree that this is an insurmountable headwind in the journey toward financial freedom.

A 401(k) plan is a wonderful savings vehicle — when it’s efficient. The problem is that many of the plans are plagued with huge commissions, very high expense ratios (the fees paid to mutual fund managers) and a variety of additional — and often hidden — layers of fees. These added layers have seemingly arbitrary labels, such as “asset-management charges” or “contract asset charges.” They often add up to 1 percent or more and are buried in the fine print of plan disclosures.

Ironically, several large 401(k) plan providers have been sued by their employees for excessive fees in their own 401(k) plans. You read that correctly. The employees who work for some of the biggest 401(k) providers aren’t willing to subject themselves to the same hefty fee arrangements they are charging other investors. Basically, the chef isn’t willing to eat his own cooking.

So how did we get here? In an opaque but legal arrangement, 99 percent of plan providers accept payments from the mutual funds they offer in your 401(k) plan. This is called revenue sharing or, more aptly, paying to play. Naturally, the list you have to choose from includes the funds that pay the provider the highest amounts — rarely the best performing, and certainly not the lowest in cost.

Additionally, many providers restrict low-cost funds to plans that exceed a certain amount of assets, meaning that employees of smaller companies are forced to invest in funds with higher fees. And since the providers don’t make much of a profit on the lower-cost funds they do offer, they will usually charge a significant markup. One major insurance company is offering an S&P 500 Index fund for more than 1 percent annually, when the actual cost is .05 percent. That translates into a 2,000 percent markup. Employers need to wake up and take their role as 401(k) plan sponsors more seriously. It’s in their power to dramatically impact the future quality of life for their employees.

When employers do their homework, they will realize that there are now a handful of low-cost alternatives where fees are reasonable, brokers are eliminated, no commissions are paid, and the plan provider doesn’t share in the fees charged by the mutual funds in the plan. This means everyone in the plan gets access to the same low-cost index funds with reasonable fees. That’s how the democratization of financial services should look.

What Postponed The DOW From Reaching 20,000

 

On my last blog I was wondering whether we would make the 20,000 level and if you read what was said on the Arora Report that it would be wise to sell your stocks and take your profit you can see the Dow is having trouble reaching the 20,000. The fact is the on-again, off-again romance between the Dow and the 20,000 milestone is officially on hold.

The Dow Jones industrial average’s  with 20,000 has cooled since Jan. 6 when the stock index faced making a market moment just short of  0.37 points of making its history-making milestone.

What postponed the Dow from reaching 20,000? In the seven trading days since the Dow was turned back just shy of the 20,000 mark, the 30-stock index has been in retreat. It has finished lower six of the past seven sessions. And after Wednesday’s drop of 22 points to 19,804.72, it is nearly 200 points away from the milestone.So what gives?

“Trump rally” matures. Dow 20,000 is just a number. But the near-miss milestone coincided with a stock market that had run far and fast since Election Day. From the first day of trading after Donald Trump won the White House until Jan. 6, when the Dow came within a whisker of topping 20,000, the Dow surged nearly 1,700 points, or 9.1%.
The bulk of those gains were driven by hope. Investors began pricing in a stronger economy and better corporate earnings based on Trump’s business-friendly policy proposals.Profit-taking was bound to kick in, especially since the Dow was at its most “overbought” level since November 1996, according to Mark Arbeter, president of Arbeter Investments.“The sugar high is wearing off,” Terri Spath, chief investment officer at Sierra Investment Management, wrote in a recent report. Although, Friday the market finally went up again after Trump made his speech at his inauguration. Giving investors hope again that he will keep to his word.

Stocks go flat after downgrade. On Jan. 9, the first trading day after the Dow came closest to 20,000 Goldman Sachs slowed its climb further when it downgraded fellow Dow components Coca-Cola and Procter & Gamble to “sell” investment recommendations. That helped push shares of the stocks lower.

Goldman Sachs, JP Morgan and other Dow financial shares shot up after Trump’s win. The idea of less regulation of banks, a better economy and the prospect for rising interest rates put banks in the “Trump Rally” sweet spot. But the bank-fueled rally has stalled since Jan. 6, the same day the Dow came within a single point of 20,000.

Goldman Sachs ran up 35% from Election Day until Jan. 6, and was the Dow’s top performer in that span. But since then, it has been among the Dow’s worst performers, tumbling more than 4%. In a sign of how the bank rally has stalled, Goldman shares fell 0.6% Wednesday despite reporting quarterly earnings and revenue results that exceeded analyst expectations.

“The first leg of the ‘Trump trade’ is largely over,” Jason Trennert of Wall Street firm Strategas Research Partners, said in a note. “The next leg of the Trump trade will come when we learn more about specifics of corporate tax reform and deregulation.”

Imaginary ceiling halts rise. Big round numbers like Dow 20,000 often act like an impenetrable ceiling that take time to break through and then act as a magnet for a period of time. The best example might be what happened to the Dow around 1,000, says Bob Baur, chief global economist at Principal. He notes that the Dow came within five points of topping 1,000 back in February 1965. But the Dow didn’t close above 1,000 until Nov. 14, 1972, according to S&P Dow Jones Indices. The Dow didn’t say goodbye to 1,000 for good until 1982, or 10 years later.

So as you can see we can be playing around the 20,000 mark for sometime and who knows what is going to happen, but if Trump does any of the things he has promised it looks like we could see the 20,000 mark being reach without any trouble. If he doesn’t do as he has stated we already know the market is going to crash, because we so it start taking a good drop just by the way he handled the press.

What Are The “Unpopular” Things To Do As DOW Nears 20,000

 

Upon reading an article the other day, it was noted that an investor who had been with investing for over 35 years and is the editor of the Arora Report. In the last article he had the Aurora charts which you could see some important changes in the stocks. In the article Nigam Arora, investor, engineer and physicist wrote the five most unpopular things to do and here is his conclusions. In his charts he showed 5 stocks, these were Martin Marietta (MLM) Pfizer (PFE) General Mills (GIS) Duke Energy Corp. (DUK) and Nvidia (NVDA) These stocks are compared with the S&P 500 ETF (SPY) in the charts. Some readers may say that the five stocks listed above have good fundamentals and technicals. The unpopular, but prudent, action, however, is to take some profits now that the Dow Jones Industrial Average (DJIA) is close to an expensive 20,000 points.

“If both fundamentals and technicals are good, why take partial profits?” might be the question. The answer lies in an important concept that some investors and analysts tend to ignore at their own peril. The concept can be best described by one word: “over-owned.”In the simplest terms, stocks go up when there are more buyers than sellers. What happens when almost everyone who is going to buy a stock has already bought it? The answer: There is no fuel to propel the stock upward and it appears the stocks are beginning to take a downward drop.

As an example, The Arora Report gave a “sell” signal right at the peak before Apple (AAPL) fell by over $300 pre-split. One key component of our algorithms that made the call was over-ownership. (This call can be easily verified if you have been a subscriber to The Arora Report or by reading MarketWatch.)

Sell popular infrastructure stocks. Infrastructure stocks are going well. On the surface it makes a lot of sense. Trump plans to build a wall on the Mexican border and has been emphasizing improving infrastructure throughout the U.S.It’s important to note that infrastructure stocks were also Hillary Clinton stocks. A favorite Wall Street thesis was to buy infrastructure stocks as it was deemed a winning proposition irrespective of who won the election. As a result, the stocks were overbought going into the election, and now that the election is over, are becoming even more overbought. Furthermore, these stocks are expensive both relative to their own histories and their projected earnings growth rates

Examples of infrastructure stocks are Martin Marietta, Vulcan Materials (VMC) Granite Construction (GVA) Tetra Tech (TTEK) Fluor (FLR) KBR (KBR) United Rentals (URI) Aecom (ACM) Terex (TEX) and Manitowoc (MTW)These stocks should be avoided, but considered for purchase only in the event of a pullback.

Sell popular pharmaceutical stocks Americans pay a lot more for drugs than people in other countries. That’s why you ought to sell large U.S.-based companies. After all, they are at risk of Trump tweets. Examples include, Pfizer, Johnson & Johnson (JNJ) Merck (MRK) Bristol-Myers Squibb (BMY) Abbott (ABT) and Eli Lilly (LLY).

Sell popular utility stocks. Utilities will benefit from deregulation, but higher interest rates will outweigh that. These popular stocks have become very over-owned and expensive. Examples include Duke Energy, Southern Co. (SO) NextEra (NEE) American Electric Power (AEP) PG&E (PCG) and Edison International (EIX).

Trim dividend-paying stocks. Dividend-paying stocks have been very popular and over owned. As a result they have become very expensive. They will be negatively impacted by rising interest rates. Examples include General Mills, Kellogg (K) Philip Morris (PM) Kimberly-Clark (KMB) Sysco (SYY) and Tupperware (TUP)

Trim popular technology stocks. Investors are oblivious that some popular technology stocks get a large portion of their sales from China. If there is a trade war with China, these stocks will get hurt. A rising dollar also is punitive. Examples include Nvidia, Broadcom (AVGO) Intel (INTC) Cisco (CSCO) IBM (IBM) and Oracle (ORCL).

Some of the cash raised from sales described above should be used in less risky stocks and ETFs that are likely to do well. Now that you found out what are the unpopular things to do when DOW nears 20,000 from Nigam Arora do you think you will be able to brave it and invest wisely.

What Is Happening In The Dow Jones

 

Do I hear 20,000? 21,000? That’s the subject Wall Street investors are starting to consider after post election euphoria has stretched equity markets deeper into the record books since Nov. 8. Does anyone really know what is happening in the the Dow Jones.

The Dow Jones Industrial Average has scored 14 record finishes since Donald Trump’s election, putting the blue-chip gauge near the psychologically significant level of 20,000. Other stock benchmarks, including the Nasdaq Composite Index and Russell 2000 index finished at records as well.

Assuming the indexes continue to lurch forward into the next week or two, that puts the gauge on pace to log the fastest 1,000-point rally since the Dow moved from 10,000 to 11,000 in from March 29, 1999, to May 3, 1999 — a 24-day trading day span, according to Dow Jones data.The Dow closed above 19,000 on Nov. 22 and took 483 trading days to span the 1,000-point bridge.

The broad-based rally has been supported by the expectation that Trump will unleash a raft of pro-business policies, including a rollback of regulations, tax cuts and fiscal spending. Signs that the market is already on a solid economic footing relative to other economies across the globe and comparatively better quarterly results from U.S. corporations isn’t hurting.

Trump won’t be a ‘dangerous’ president, says Goldman’s CEO Investors appear to be buying into those prospects, which are far from a reality.

Of course, there are a lot of signs that the market is getting overheated. Wall Street’s fear gauge, the CBOE Volatility Index (VIX) a measure of the market’s expectation of volatility, is hovering around 12, a level that suggests investors may be growing complacent and are ill-prepared for a shock to the system. Levels above 12 imply the expectation for even more volatility and some argue that on a rolling basis, stocks are getting pricey and are due for a reversal. We have seen time when the market has gone crazy high and took terrible crashes, such as in the 1920’s.

The CAPE ratio, which compares stock prices with earnings over the past 10 years, shows that the S&P 500, which closed at a record, is trading at 27.9 times, citing Nobel laureate economist, Robert Shiller. By that measure, the stock market is now flashing a bright red warning sign, implying that a crash may be imminent in the broad-market S&P 500 index (SPX), but even Shiller, who appeared on CNBC to discuss his CAPE ratio, said this metric may be off because of Trump. He views the real estate mogul as an unprecedented candidate whose policy impact could elude models.“You have to look. We just got a new president who wants to cut corporate-profit taxes and he wants to ease regulations. My own indicators are a little bit less effective in this environment,” Shiller said.

Even after the  Federal Reserve’s increase in the interest the market has manage to maintain its numbers but the 20,000 mark still has not not been reached. Does this bouncing back in forth mean a drop is near. Who knows everything seems to waiting for Trump to begin his Presidency.

“Ultimately, Dow 20,000 is just another big round number,” said John Canally, Chief Economic Strategist for LPL Financial. “Over the long run stock prices are driving by earnings of the companies in the stock market. If the economy is sound, if the Fed is doing its job and the politicians don’t get in the way, corporate earnings should matter more to investors than ‘the big round numbers.

Is There A Haze On Marijuana Stocks

 

jeffsessionsag-copy-min-800x445Is there a haze on marijuana stocks with a new Attorney General close at hand. With Donald Trump announcing Jeff Sessions as the new Attorney General, all of you who are marijuana fans may have to worry because he was heard saying in the Senate that “Good people don’t smoke marijuana”, and he is also known as an anti-marijuana lawmaker.

So does this mean the 29 states that have decided to legalize the use of marijuana for medical use and 8 states for recreational use need to worry. Who knows?

If it was left up to Jeff Sessions more than likely the states would have to fight the Federal Government, but because the growth of ho people feel about marijuana and the economy, Trump may let the states keep the marijuana but with some restrictions. Whatever, this is a new many options are on the table for the Federal Government and this is more than it has ever been.

Many changes need to be made especially since banking is not allowed and crime is rising in the Marijuana stores, with those knowing lots of money is usually on the site as well as the drug itself. Many changes also need to be made and a few high-profile raids by the DEA would likely dissuade many of those who are today publicly selling cannabis.

In all the recreational states – Colorado, Alaska, Oregon, Washington, California, Massachusetts, Maine and Nevada – buyers must pay taxes on their marijuana purchases. California alone is expected to have a marijuana marketplace worth $7.6 billion by 2020, according to industry analysts New Frontier Data and ArcView Market Research.

Today, marijuana dealers feel largely protected by the Cole Memo, a Justice Department letter establishing under what circumstances federal law enforcement would step in. Generally speaking, the Cole Memo says the federal government will ignore marijuana businesses working in states with strong regulatory systems that take steps to keep pot out of the hands of kids and prevent drug cartels from profiting. But that 2013 memo also specifically says prosecutors retain the discretion to target the marijuana industry if there’s a “strong federal interest.”

Congress has also prohibited the Justice Department from using federal money to interfere with medical marijuana patients in states where it’s been approved.

President Obama told Rolling Stone that he believes marijuana should be treated as a public health issue, similar to alcohol or tobacco, and called the growing patchwork of state laws “untenable” from a federal perspective, because there’s such a disparity across state borders. Some marijuana advocates remain bitterly disappointed Obama didn’t do more to push the DEA to classify cannabis as something other than a Schedule 1 controlled substance.

On the whole, everyone feels there will be some changes but if Trump will stick to his main campaign slogan of improving and changing America, they think that marijuana will eventually be legalized. So keep it in mind when it comes to the stocks and you can decide .

Will Wall Street Survive With Trump As President

 

05-26-wall-street-trump-presidencyThe poor and blue collar workers joined together for a change in America that we may all be dismayed in seeing. Will Wall Street survive Trump as President, and will those on Social Security be able to make ends meet when he decides to take $182 from those getting a check of $1360 or more. Will single parents be able to afford their taxes when he puts a cut in deductibles.

Stocks have began to drop and the Mexican peso and Euro are both dropping in value since Trump has been elected. Many traders have changed their stocks for gold to be on the safe side and gold is climbing. Researcher have been saying are economy was going to take a hit but for some reason everything seemed to be going well. Then Trump was elected and our economy is now taking the hit. Too many people are fleeing Wall street.

Several Canadian realtors have stated that many Americans are looking for homes in Canada. Several of our college students are looking to go to college in Canada. This actually started before the election because many of the people leaving America did not want to stay here if Clinton or Trump won the election. I am a Republican, but I am on Social Security and my husband will be going on Social Security in a few years, It frightened me to have Trump win, my husband may have to work several more years and not get the amount he should have gotten because of Trump.

Those that are at retirement age may have problems if they don’t have any 401Ks or IRAs to help them with their income if Trump decides to cut back on their Social Securities, because I can guarantee all our other cost of living will raise. He wants to cut all European and Asian ties. American made products are not cheap, plus we no longer produce a lot of the products that are brought over from other countries. Maybe, this is where he plans those extra jobs, but he plans on letting the States control the wages, so we still may have low minimum wages.

Will we survive Trump as president, I hope so. What I saw on TV last night as people surrounded the White House climbing in the trees, yelling and carrying on against their own president, I begin to wonder if the lower class people are beginning to get out of control and now want control. I just hope Trump isn’t edging them on so we end up fighting amongst ourselves. Obama has his hands full by trying to reassure the Chinese and Iranians that America won’t do anything foolish for now.

So far, Wall Street is suffering from whiplash the day after election. It can’t seem to make up its mind what it should do. One minute it is up the next it is down. Mexican and American billionaires lost billions of dollars when trade began but luckily Trumps acceptance speech seemed to bring the futures up a little and the markets seem to be faring much better than what many researcher thought they would. So now, will Wall Street survive with Trump as President the rest of his term? 

Why Is Trump Saying The Stock Market Is In A Big, Fat, Ugly Bubble

 

trump151015104549-trump-bubble-780x439On my last blog I commented that a climbing interest rate may affect our wallets, but several are believing the low interest rate is what has kept our stock prices high and the threat of a rising interest rate is causing people to become too nervous to invest into them. Maybe, that answers the question of why is Trump saying the stock market is in a big, fat, ugly bubble.

It seems bubble talk is bubbling up on the presidential campaign trail. Nobody on Wall Street disputes that the stock market is pricey by historic standards. But are stocks — juiced by the Federal Reserve’s low interest rate policy — in a “big, fat, ugly bubble” that will end badly as Donald Trump warned at the first presidential debate?

Trump, the Republican nominee, isn’t the first person to warn of a bubble. Nor is he the first to cite super-loose Fed policy as the root cause. Bubble talk has been circulating since last September, when billionaire investor Carl Icahn warned of “danger ahead” and told CNBC: “We’re in a bubble.” Since then, other heavyweights, including real estate titan Sam Zell, bond king Jeffrey Gundlach of DoubleLine Capital and former hedge fund titan Stanley Druckenmiller, have warned that many investments have been massively distorted by Fed intervention and that financial pain will ensue once the bubble has popped. He feels we need to stay away from the stocks and invest in gold. The government keeps saying we have a good economy and it can stand to have our interest rate to climb. They plan on discussing it again in December.

 Other Wall Street pros who say the typical ingredients of a bubble are absent. They feel that stock values, while elevated, have not reached nosebleed levels, They also feel irrational exuberance is missing.

“No, the market is not in a big bubble,” says Michael Farr, CEO of money management firm Farr Miller & Washington. “It’s expensive, but it’s not wildly speculative.”
The Standard & Poor’s 500 stock index’s current price-to-earnings ratio (P-E) — a common metric used to determine if the market is cheap or frothy — is far from bubble territory. The trailing four-quarter P-E on adjusted earnings is 18.7. While that’s above the long-term average of 15 to 16 times earnings, it’s well below the P-E of nearly 30 at the peak of the dot-com stock bubble in 2000.

What’s also missing is a stock-crazed nation where taxi drivers turn into day traders in hopes of making a fast buck in stocks.
“I don’t get the sense that everyone is ‘all in’ like they were in real estate in 2007 and tech stocks in 2000,” says Paul Nolte, senior portfolio manager at Kingsview Asset Management. “Many investors remain wary of stocks. When we read about everyone getting rich on the market and the many ‘can’t miss’ opportunities, then we’ll be in a bubble.”

That doesn’t mean stocks won’t stumble if the Fed starts hiking rates, warns Mark Luschini, chief investment strategist at Janney.
“The stock market is still vulnerable to a shakeout,” he says. “Still, absent an aggressive move higher in rates, I think the market’s negative reaction to a small lift in rates would be brief.”

It would be nice if everyone could get together and come up with a solution to the bubble problem. Myself I feel our economy is bouncing on the bubble and can’t makeup its mind where it needs to go. Most of the stocks just keep jumping around up one day down the next. I think that is why everyone is afraid to get in because so far the market can’t seem to stay up more than a day or two and then everything is back down again.

Will The Fed’s Raised Interest Rate Affect Our Wallets

The U.S. Federal Reserve is  expected to raise its fed funds rate this year. Whether that will be as early as this month or later is still unclear. But one thing that’s certain is that the second increase in a decade will affect the cost of consumer credit, but will the Fed’s raised interest rate affect our wallets if and when they decide to raise the interest rate.

One single-quarter point move isn’t something you’re necessarily going to noticewallet00308911, but you may want to shop around to get better deals. Mortgages, credit cards, bank loans, and even interest on CDs and savings will begin to see changes which could give you a better chance to save.

So here is some ways to check out where the interest will raise and what you could do to help yourself prevent losses and possibly begin to make a little money.
The economy, the Fed and inflation all have some influence over long-term fixed mortgage rates, which are pegged to yield on U.S. Treasury notes, so there’s likely to be some creep from current levels even before the Fed officially makes a move.
With interest rates rising, adjustable rate mortgages could be heading higher too — so don’t be surprised to see some payment increases down the road.
If you have an adjustable loan your interest will go up so will your payments so budget. It would be wise to refinance, because the interest is going to keep on rising, so get a fixed rate loan. 

Currently, mortgage rates are near the lowest levels ever with the average 30-year fixed rate near 3.6 percent — only about an eighth of a percentage point above the record low.

For those planning on purchasing a new car in the next few months, one interest rate increase will not have any material effect on borrowing costs. A quarter percentage point difference on a $25,000 loan is $3 a month, according to Bankrate’s McBride. You won’t have to downsize to a compact car because the rates are going up, at least not yet. What will affect what kind of car you can afford is shopping around to secure the best rate on your financing, checking that your credit is in good shape and negotiating the price of your vehicle. Don’t ever think you have to buy the car for what it is priced, learn to say no and have a price in mind. Stick to that price. Walk away and check other car lots.

Most credit cards on the market these days have a variable rate, which means there’s a direct connection to the benchmark rate. A quarter percentage point rate hike means your credit card rate will go up by a quarter of a percentage point within a few billing cycles. At the rate credit cards are now it is not wise to carry a balance. Several cards offer 0% balance transfer such as Citi, Barclays, Discover, and Capitalone. Using the 0% balance transfer can get rid of your high debt by not paying those high interest fees. You want to get them as soon as possible, because if the Feds keep raising the interest we won’t have those 0% balance transfers.

Thank goodness that the Federal student loans are fixed, the interest won’t go up, but if you have a private loan, that is different, if it is a variable rate. If the interest goes up your payments will go up. So student loans that are on private loans that don’t have fixed rates will begin to climb as the Fed’s raise the interest.

Now here is where we all can finally make some money although this takes the slowest change. When a bank can make more money the change happens immediately, but when they have to pay out it take a little more time. Right now they only pay out about 0.08 percent on savings some are less and very few are more. It is for us to shop around and find a bank with the highest savings interest. If enough people would take their money from the banks  with lower interest rates and move them to a  bank paying higher interest, maybe the banks would wake up and decide to raise the interest instead of losing their customers. I found a bank that pays 1.61% on interest but they will only pay up to $15,000 anything over that they pay 0.05%.

So will the Fed’s raised interest rate affect our wallet when they finally decide to raise it. I guess we will just wait and see, but if some of us have adjustable or variable rates, we should start preparing for the raise and refinance before the interest gets too high. Those of you who are thinking of buying a home it would be very wise to get out there and get to looking, because who knows what the mortgage rates are going to be.

What Is Causing Dow’s New Record Highs And Will It last

  • dow160712182118-dow-sp-500-close-record-highs-00003703-1024x576Have you you been asking yourself what is causing Dow’s new record highs and will it last, I know I have. The Dow Jones Industrial Average is up for 14 of the last 16 sessions, including nine sessions in a row and seven straight record closes. The cumulative result has been an epic 9 percent surge off of the late June “Brexit” low — all merely on the hopes and nonspecific hints of more central bank stimulus.

But, as things have been going, the aggressive confidence seen over the last few weeks diminishes the need for said stimulus. The Bank of England, at the epicenter of the Brexit fallout, held off on any new action and has found that the vote to leave the European Union hasn’t hurt the economy and the odds of a Federal Reserve interest rate hike in July or September have started rising again.

Investors, apparently, haven’t thought through the logic of all this, as stocks continue to push to new highs. This begs the question: Is this a dumb money rally? If so, what could end it?

I hate to throw shade on the Dow’s New Record High, but as the market’s climbed to new record highs, it’s been doing it on the back of fewer and fewer stocks. In fact, there were more stocks rising when stocks were topping back in April than there are now, a little odd.

There’s more. Wall Street pros are nervous, valuations are high, fund managers are holding large cash reserves, the corporate earnings recession continues and U.S. economic data suggest inflation is coming back to life (which will make withholding Fed rate hikes increasingly difficult).

The latest Bank of America Merrill Lynch Fund Managers’ Survey finds that July cash levels are at 5.8 percent, up from 5.7 percent in June and the highest level since November 2001. Many survey respondents are also taking out protection against a sharp decline in stocks, with more worries about a downside surprise than in the midst of the financial crisis in late 2008.The result of all this is the first industry equity underweight positioning in four years

 Will Clinton or Trump Could Face a Stock Market Nightmare when elected. Jason Goepfert at SentimenTrader notes that his own measure of “Dumb Money” vs. “Smart Money” sentiment — a measure of how the big boys are feeling compared to the small fish — shows that, through Tuesday, the dumb money was 76 percent confident in the rally while the smart money confidence level was at 18 percent.

Historically, gaps this large have been a bad sign for stocks going forward: Every time it’s happened in the last 20 years, any further short-term stock market gains were erased during the subsequent pullback.What could be the catalyst for the eventual reversal? Renewed weakness in crude oil.

 The US now has more oil reserves than Saudi Arabia or Russia, so what are they going to do with the crude oil. Energy prices look vulnerable to a breakdown here as U.S. production ramps up and overseas supply disruptions fade while inventories remain bloated. These recent trends have led to a turn higher in the backlog of refined gasoline, which started the summer driving season well above levels seen since 2012.

A dramatic comedown in energy prices would rattle oil and gas stocks — the catalysts for the rally out the February low — and make investors worry about the return of a negative factor they’ve not dealt with for months. Keep an eye on wholesale gasoline, which is testing support at its 200-day moving average as shown above. A breakdown here  would represent a 20 percent decline from here and would be just the thing to shock the stock market out of its fever dream.

As we keep wondering what is causing Dow’s new records high and will it last, you might want to check the Fiscal Times as I did to give you this article, in hopes to alert you to what might be coming up and get prepared to protect your money.