What does the new Congress mean for your investments?
Maybe it's a little early to prognosticate. Investors are going to have to wait to see more specifics from the new Congressional leaders. And there's a two-month lame duck Congress to get through before the new team takes charge. We don't even know if the Bush tax cuts will be extended beyond Dec. 31 -- and, if so, for how long.
More from WSJ.com:
• What a Republican Win Would Mean for Investors
• Stocks: Are Small Investors Too Late to the Party?
• Warning: Retirement Disaster Ahead
But I'm not one to hang around. And if investors want to look ahead, they're not completely blind. We have two sets of clues: History, and the plan that the Republican leaders themselves laid out nearly two months ago, in their 48-page Pledge to America.
Neither is a perfect guide. But they may not be completely useless. What can they tell us?
THE STOCK MARKET. Unclear. Watch out for anyone who tells you "divided government is good for the stock market." The historical basis for this -- such as data since 1949 via the Stock Trader's Almanac -- is meager. You can't extrapolate universal rules from such a small amount of data. The results are too heavily skewed by the Reagan (1981-86) and Clinton (1995-2001) booms under divided governments. "The mantra that gridlock is good for the markets is not borne out by the evidence," says Bob Johnson, senior managing director at the CFA Institute, a trade organization for professional investors. A case in point: The stock market has gained 40% since the Democrats took full control in Jan. 2009.
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LARGE CAPS. Positive. Yes, the new Congress may be pro-business. But that should favor those who can pay to play. That means big companies with cash, clout and contacts. Think: Big oil, pharma, and the Wall Street banks. Large companies boomed following the "Republican Revolution" of 1994. Large companies also have other advantages for investors today. After years of underperforming small caps, many of them look reasonably priced. Those with big dividend yields should benefit from extensions of the Bush tax cuts, which favor dividend income. And large companies are most able to benefit from overseas growth and a weaker dollar (more on that below).
SMALL CAPS. Unclear. They should benefit if the Republicans follow through on plans for lighter regulations and a small business tax cut. But the biggest issue for them remains the domestic economy, still burdened by high unemployment and heavy debts. According to the Pledge, the new Congress plans to axe any remaining stimulus and cut back on discretionary spending. Will this austerity help the domestic economy in the short-term? Hardly. Look at Ireland, where the economy is in freefall. A further headwind for small cap investors: The stocks have already outperformed for a decade. The cycle may be due to turn.
.......I too think it is way too early to figure out who WON this election. With talk of a Lame Duck session and chaos amongst the ACTUAL Republican (bill voting) Party, we will just have to wait and see what happens in January.
I do say that the NEWly elected have done damaged to Ranking Dems on BIG committee's and with this causes a big PAUSE in the bill making process, I just hope the Repblicans put together complete simple bills that America Can READ and let us understand what is going on in D.C......
Because that is what I think America voted on, Complete Confussion!
To many people voted for Obama with the hopes and dreams that he would ride into the government and sprinkle his magic and be the white knight in shinning armour that we have been waited for. I have heard people compare Obama to John Wayne. Although, unfair many people have hoped that Obama would be the answer and would pull the United States out of its debt/war/health care issues/poverty and every other bad concern that faces the average American citizen. After watching people vote, and observing the outcome, it just goes to show you that when one person puts so much hope and faith in ONE PERSON (Obama) then the consequences follow the preceeding elections. How can we as a country unite (both rep/dem/other) to unify our country before we are facing a second recession. (although rumor has it that our recession has ended...hum not so sure where they get their figures on this but I guess if the statics prooves it then it HAS TO BE TRUE? RIGHT!?) This is exsactly why the United States continues to fail, they allow other people (political figures) to represent them and they do not follow through with their promises of a better future. So if you really want to make a difference then do it. Don't wait for the statistics to explain the economy, study it and make decisions that could if nothing else benefit you during this hard time.
Saturday, November 6, 2010
Wednesday, October 20, 2010
American Airlines
American Airlines parent AMR posts 3Q profit - Yahoo! Finance
How ironic that it is AMERICAN Airlines and yet most of their revenue is from over sea traveling. I wonder if a company would be able to benefit and receive more revenue if they expanded their services to local airports and not just the five key U.S. markets: L.A., New York, Chicago, Miami and Dallas. There are many businesses that could utilize the airline if it was more marketable in other cities such as state capitols (i.e. Springfield, Il) so not only the corporate world could use the airlines but also vacationing passengers as well.
Some of American Airlines rivals (Delta, Southwest) are already taking advantage of the vacationing travelor as well as international flights. Maybe this could help with American Airlines to produce more revenue and keep up with its rival competitions.
How ironic that it is AMERICAN Airlines and yet most of their revenue is from over sea traveling. I wonder if a company would be able to benefit and receive more revenue if they expanded their services to local airports and not just the five key U.S. markets: L.A., New York, Chicago, Miami and Dallas. There are many businesses that could utilize the airline if it was more marketable in other cities such as state capitols (i.e. Springfield, Il) so not only the corporate world could use the airlines but also vacationing passengers as well.
Some of American Airlines rivals (Delta, Southwest) are already taking advantage of the vacationing travelor as well as international flights. Maybe this could help with American Airlines to produce more revenue and keep up with its rival competitions.
Wednesday, October 6, 2010
France warns of high terror risk in Britain
Wed Oct 6, 7:59 am ET
PARIS – France's Foreign Ministry is warning travelers of a high terrorism risk in Britain and asking them to be cautious in the country's crowded tourist areas.
A message posted on the ministry's Web site late Tuesday says British authorities believe "that the level of terrorist threat is very high in the United Kingdom and the risk of an attack is very likely."
The ministry's message recommends that travelers in Britain exercise "extreme vigilance in public transport and busy tourist sites." France has not issued any recent warnings for other European countries.
France and many other countries in Europe have stepped up terrorism alert vigilance recently amid what has been described as an abstract though heightened threat.
The French warning was issued before gunmen fired a rocket at a convoy carrying Britain's No. 2 diplomat in Yemen on Wednesday, wounding four people amid heightened fears about al-Qaida influence in the country.
There was no immediate claim of responsibility for the attack. In a separate incident in Yemen the same day, a gunman shot and killed a French citizen working for Austrian oil and gas company OMV.
Security officials have said terrorists may be plotting attacks in Europe with assault weapons on public places, similar to the deadly 2008 shooting spree in Mumbai, India.
European officials have provided no details about specific targets, though security has been boosted in many bustling public places — for example, at Notre Dame Cathedral and the Eiffel Tower in Paris.
The French Foreign Ministry's message came after Britain's Foreign Office warned travelers to France and Germany of a high terror threat. A U.S. State Department also advised American citizens living or traveling in Europe to take more precautions about their personal security.
Ok, so is this terror threat to break down the European economy or is it something that people should avoid at all risk. After reading about the various "threats" and shootings that have been happening over the recent time, I believe that people should not stop traveling to Europe, but do it with caution as though it was any other trip that you would take. Every action has a consequence, even if there was no terrorist threat, you could still have a faulty airplane engine. This breakdown will affect the European economy and throw the countries into a recession due to lack of revenue being exchanged.
PARIS – France's Foreign Ministry is warning travelers of a high terrorism risk in Britain and asking them to be cautious in the country's crowded tourist areas.
A message posted on the ministry's Web site late Tuesday says British authorities believe "that the level of terrorist threat is very high in the United Kingdom and the risk of an attack is very likely."
The ministry's message recommends that travelers in Britain exercise "extreme vigilance in public transport and busy tourist sites." France has not issued any recent warnings for other European countries.
France and many other countries in Europe have stepped up terrorism alert vigilance recently amid what has been described as an abstract though heightened threat.
The French warning was issued before gunmen fired a rocket at a convoy carrying Britain's No. 2 diplomat in Yemen on Wednesday, wounding four people amid heightened fears about al-Qaida influence in the country.
There was no immediate claim of responsibility for the attack. In a separate incident in Yemen the same day, a gunman shot and killed a French citizen working for Austrian oil and gas company OMV.
Security officials have said terrorists may be plotting attacks in Europe with assault weapons on public places, similar to the deadly 2008 shooting spree in Mumbai, India.
European officials have provided no details about specific targets, though security has been boosted in many bustling public places — for example, at Notre Dame Cathedral and the Eiffel Tower in Paris.
The French Foreign Ministry's message came after Britain's Foreign Office warned travelers to France and Germany of a high terror threat. A U.S. State Department also advised American citizens living or traveling in Europe to take more precautions about their personal security.
Ok, so is this terror threat to break down the European economy or is it something that people should avoid at all risk. After reading about the various "threats" and shootings that have been happening over the recent time, I believe that people should not stop traveling to Europe, but do it with caution as though it was any other trip that you would take. Every action has a consequence, even if there was no terrorist threat, you could still have a faulty airplane engine. This breakdown will affect the European economy and throw the countries into a recession due to lack of revenue being exchanged.
Wednesday, September 22, 2010
What It Is, If no longer called a Recession
What It Is, If It's No Longer a 'Recession' - Yahoo! News
I have a question, how can it be a recovery if it's unemployment is higher than its unemployment during the recession? I don't see any indication according to what Economists believe to be a recession, containing positve growth and change.
"In economics, a recession is a business cycle contraction, a general slowdown in economic activity over a period of time.[1][2] During recessions, many macroeconomic indicators vary in a similar way. Production as measured by Gross Domestic Product (GDP), employment, investment spending, capacity utilization, household incomes, business profits and inflation all fall during recessions; while bankruptcies and the unemployment rate rise" (Wikipedia)
So if we go according to this definition, where is the growth in economic activity over the past year? I don't see the evidence that supports the concept that our country is no longer in recession but rather in "recovery."
I have a question, how can it be a recovery if it's unemployment is higher than its unemployment during the recession? I don't see any indication according to what Economists believe to be a recession, containing positve growth and change.
"In economics, a recession is a business cycle contraction, a general slowdown in economic activity over a period of time.[1][2] During recessions, many macroeconomic indicators vary in a similar way. Production as measured by Gross Domestic Product (GDP), employment, investment spending, capacity utilization, household incomes, business profits and inflation all fall during recessions; while bankruptcies and the unemployment rate rise" (Wikipedia)
So if we go according to this definition, where is the growth in economic activity over the past year? I don't see the evidence that supports the concept that our country is no longer in recession but rather in "recovery."
Wednesday, September 15, 2010
Midwest to suffer gas prices
KOB.com - Oil drops on economic news; crude supplies decline
After the Midwest pipeline busted going from Michigan to Indiana consumers in the Midwest suffer the mark up on the barrel of oil. The oppritunity cost that consumers endure because of the pipeline breaking is the extra money spent on gas prices that could have bought food, clothing, or paid for your child's haircut.
I want to watch how the barrel of gas effects the travel industries within the Midwest over the duration of the increase at the pump.
After the Midwest pipeline busted going from Michigan to Indiana consumers in the Midwest suffer the mark up on the barrel of oil. The oppritunity cost that consumers endure because of the pipeline breaking is the extra money spent on gas prices that could have bought food, clothing, or paid for your child's haircut.
I want to watch how the barrel of gas effects the travel industries within the Midwest over the duration of the increase at the pump.
Saturday, September 11, 2010
9/11
Nation & World | The World Trade Center complex is rising rapidly | Seattle Times Newspaper
I wonder if the United States would have invested in the infrastructure prior to the terroist attack would that have saved the lives of the many who died 9/11/01? Why did the US overlook this possibility would constructing the first WTC. Is this new WTC respecting the lives of those who remain in the rubble or is it digging the graves deeper?
I wonder if the United States would have invested in the infrastructure prior to the terroist attack would that have saved the lives of the many who died 9/11/01? Why did the US overlook this possibility would constructing the first WTC. Is this new WTC respecting the lives of those who remain in the rubble or is it digging the graves deeper?
Saturday, September 4, 2010
strategies-to-reduce-taxes-on-social-security: Personal Finance News from Yahoo! Finance
strategies-to-reduce-taxes-on-social-security: Personal Finance News from Yahoo! Finance: "Strategies to Reduce Taxes on Social Security
Sponsored by by Rachel L. Sheedy
Wednesday, September 1, 2010
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EmailPrintYou worked hard all your life, paying into the Social Security system. Now you're ready for payback time. Not so fast. Uncle Sam may want a piece of your benefits. Up to 85% of Social Security benefits may be subject to federal tax, but tax planning can help ease the pain.
More from Kiplinger.com:
• Secrets to Maximizing Social Security
• Quiz: Test Your Social Security IQ
• 5 Great Cities for Retirees
The tax hit will depend on your income and marital status. First figure your modified adjusted gross income, which includes non-Social Security sources of taxable income, such as pensions, wages, interest and dividends. Add in tax-exempt interest and certain other exclusions from income. Itemized deductions won't help you in this calculation, says Robert Seltzer, a certified public accountant in Beverly Hills, Cal.
Next add one-half of the Social Security benefits you receive for the year — the total is your 'provisional income.' Then look at the IRS's 'base amounts' for taxing Social Security. The base amounts are $32,000 for married couples filing jointly and $25,000 for single filers."
In the previous blog I discussed how if the focus of the nation was towards taxing and raising revenue for the United States instead of censoring the country would not be in a recession. However, this idea of taxing social security has taken it a little to far. Social Security income has already been taken from you as a trade off for an exchange of a benefit at a later date for using your services (income) now. At what point will the U.S. government censor how far they are allowed to execute any law?
Sponsored by by Rachel L. Sheedy
Wednesday, September 1, 2010
Share
retweet
EmailPrintYou worked hard all your life, paying into the Social Security system. Now you're ready for payback time. Not so fast. Uncle Sam may want a piece of your benefits. Up to 85% of Social Security benefits may be subject to federal tax, but tax planning can help ease the pain.
More from Kiplinger.com:
• Secrets to Maximizing Social Security
• Quiz: Test Your Social Security IQ
• 5 Great Cities for Retirees
The tax hit will depend on your income and marital status. First figure your modified adjusted gross income, which includes non-Social Security sources of taxable income, such as pensions, wages, interest and dividends. Add in tax-exempt interest and certain other exclusions from income. Itemized deductions won't help you in this calculation, says Robert Seltzer, a certified public accountant in Beverly Hills, Cal.
Next add one-half of the Social Security benefits you receive for the year — the total is your 'provisional income.' Then look at the IRS's 'base amounts' for taxing Social Security. The base amounts are $32,000 for married couples filing jointly and $25,000 for single filers."
In the previous blog I discussed how if the focus of the nation was towards taxing and raising revenue for the United States instead of censoring the country would not be in a recession. However, this idea of taxing social security has taken it a little to far. Social Security income has already been taken from you as a trade off for an exchange of a benefit at a later date for using your services (income) now. At what point will the U.S. government censor how far they are allowed to execute any law?
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