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How My Finances Have Changed with Covid

May 20, 2020 by Jacob Sensiba Leave a Comment

Aside from the death and illness, it has caused, Covid-19 has done a number on the financial system and the economy.

I’m writing this on May 19th, and up to this point, over 30 million people have filed for unemployment benefits.

In my previous post, which can be found here, I detailed how you can plan in the event of job loss.

Even if you haven’t lost your job, more than likely, your finances have changed. In this article, I want to pull back the curtain on how my finances have changed during this environment.

My Job

Thankfully, I’m still working. I work for my family’s business. Technically speaking, we have four family businesses and I work three out of the four in various capacities.

Two out of those three businesses are very resilient during recessions, so I’m not terribly worried about my income from those two sources.

The last, however, will be influenced by movements in the market. If I do my job well, it shouldn’t vary a ton, but if I don’t, my clients will feel the pain, as will I.

The reason being is I, typically, charge a percentage of the assets under management (AUM). If account values go down, so does the fee I receive. The two go hand in hand, as they should. If I do a poor job, I should make less. It just makes sense.

With that said, my income hasn’t moved too much from the financial advising gig. It dropped a little bit last month, but I imagine it’ll come back up by the end of May, as the market has recovered.

Opinion: The Economy

I don’t know if I’ve mentioned it yet here, but my opinion of the economy is darker than some. I think there will be a cascade of bankruptcies in the public and private sectors.

With regard to the public sector, the companies that are rated BBB are already at record highs. When revenues stop coming in or significantly reduce, it’s hard for companies to make interest payments to lenders (holders of debt).

Companies will start defaulting on their debts, and the ability to pay, as well as other factors, help determine the credit rating. This will cause a slew of BBB rated companies to get downgraded.

Funds

With regard to fixed income mutual funds and ETFs, the vast majority of them have rules they need to abide by. One of those rules could be only investing in investment-grade companies.

Investment grade is anything from AAA to BBB. My fear is that when companies get downgraded from BBB to BB, it’ll cause funds to dump those companies; exasperating the sell-off.

My Finances

With that said, here’s how I’ve adapted.

My finances really haven’t changed much. I’m spending more on groceries, especially right now as I am stocking up on certain goods. The added benefit of that is I’m spending less on food from restaurants, which saves me money and I’m eating healthier too.

So you’re spending more on groceries and less on take-out…what else? Well, given the nature of Covid and the uncertainty that surrounds it, my priorities have shifted a little.

More Cash

I’ve planned my clients’ portfolios with the above scenario in mind. The majority of clients aged 60 and up are positioned more conservatively than normal. With that in mind, all of the portfolios I manage will take a little hit, and my income will drop as a result.

I’ve suspended my retirement contributions, via payroll deduction, until I feel comfortable again. This may seem counterintuitive because of the stress I put on leaving things alone and dollar-cost-averaging as prices go lower.

Due to the fact that my income has some variability, not to mention my rental property and the uncertainty of my renters’ making rent payments (because of talks about forgiving rent payments for those affected by Covid), I have to keep more cash available than normal.

Retirement Contributions

As I mentioned, I stopped my automatic retirement contributions, but I am making voluntary contributions to my Roth IRA when I feel my cash available is adequate.

Other than that, nothing else has changed. Debt payments will continue as planned and saving for a down payment on a house will also continue.

Be advised: Any opinion expressed about the market/economy is strictly an opinion and should not be viewed as a certainty. Additionally, my preparations for said opinions are specific to me. Consult your financial professional about your particular situation.

Hacks for Covid-Related Issues

April 1, 2020 by Jacob Sensiba Leave a Comment

Our daily lives have been disrupted. People are working from home, unable to go to the store, or have lost their job.

For those of us that are able to continue living our lives, relatively normal, with some minor inconveniences, we need to adjust.

We need to take advantage of the 21st-century technology available to us. This could be anything from grocery shopping apps, social media, or the apps of your favorite stores.

In this article, we’re going to dive into some of the tools and hacks you can use to help get through this period of quarantine and social distancing.

Grocery Shopping Hacks

There are several hacks you can use to make your trips to the grocery store more efficient and effective.

Get what you need and get out. You HAVE to make a list and you NEED to stick to that list. This isn’t the time to browse or look for sales (more on that in a minute), buy the items on your list and leave.
Plan your route – If there’s a particular store you frequently visit, use that store’s app to plan your route. Personally, I go to Walmart for almost everything. The first thing I do is make my list. Then I go onto the app and start searching for the items on my list. The location marked as “your store” will pinpoint which department, aisle, and shelf position for your item.
Buy in bulk – with items that won’t go bad or if the time in which you need to use it by is several months or years in the future, buy it in bulk. Be careful, however. It is important to do the math. Figure out the “per unit” price and make sure buying in bulk is an economically beneficial decision.
Look up recipes ahead of time that require only a few/minimal ingredients. Ideally, you’ll want to find recipes that require few ingredients that can also make a healthy amount of food. That way you have leftovers. The way I like to think about it is how much does each meal cost?
That brings me to my next point…buy foods you can freeze, or make meals that you can freeze. This gives you food that you can use down the road and also gives you something easy to eat if you’re tired or aren’t feeling well.
One more quick one – Use your knuckles and/or elbows when possible. We all want to stay healthy and avoid passing Covid onto others. Where it makes sense, try not to use your hands.

Grocery Shopping Apps

There are possibly hundreds of grocery shopping apps available, but in doing my research, I found five apps that I thought were extremely useful.

Flipp – Matches coupons from your favorite brands with the weekly flyer from your favorite store.
MealBoard – Manages your recipes, grocery list, and it also keeps track of what you do or don’t have in your pantry.
Grocery Pal – Browse sales and coupons from the stores you frequent, and seamlessly add sale items to your grocery list.
Out of milk – Lets you know what’s in your pantry and what you need to add to your shopping list.
Big Oven – Kind of like a social network for groceries and recipes. Find out what your connections are buying to get inspiration for recipes. You can also type in the ingredients you do have and find some recipes you can make with those ingredients

Working from home

It’s no doubt that we are extremely fortunate to be able to work from home. With all of the technology available, a considerable amount of the workforce is able to tap in from a remote location and still get their stuff done.

As lucky as we may be, working from home comes with its own unique challenges. Here are some hacks for those working from home.

Get dressed like you’re going to work – this is something that’ll help you psychologically. It’ll trick your brain into thinking you’re going to work. This helps you frame your mindset for work.
Designate a work-space in your home – a psychological trick as well as a means to an end. You can’t work in front of the TV. You need a space where you can actually be productive.
Keep a strict schedule (if you can) – Now this isn’t possible for everyone, especially if you have little kids at home that need constant attention. Just do your best. Lean on your family members to watch the kiddos for a little while so you can get some work done. Also, please remember to take breaks. Check-in with friends and colleagues. Try to make your day as normal as possible.
Communicate everything – Almost to a fault. Send emails and texts. Make phone calls about anything and everything. We’re so familiar with communicating in person that we don’t realize how much we actually say.

Working together

My favorite part of this post. Writing about the human condition and how in times of crisis we always put our differences aside to help our neighbor.

During this pandemic, do what you can to help your fellow humans. Offer to pool resources together. Share recipes. Have a rotation of who goes to the grocery store.

If you have an elderly neighbor or family member, do everything you can to help them. Go to the store for them. Send letters to loved ones. Send letters to folks in nursing homes and assisted living facilities.

We’re not all scientists, healthcare professionals, retail employees, or other essential professions that are keeping the wheels turning, so we have to do our part in some form or fashion. Be nice.

Reading and Resources:

What are the Advantages and Disadvantages of Saving at a Bank

Impeachment And The Stock Market

October 2, 2019 by Jacob Sensiba Leave a Comment

The talk of impeachment is flooding the headlines, so we’re going to explore it, how impeachment proceedings took place in the past, what happened to the market with each instance, and what you should do with your money/investments while these events transpire.

What’s the process?

The first step in any impeachment proceeding begins with a formal inquiry. This is done by the House of Representatives, and that’s where we are at this point in time.

During the inquiry, the evidence is gathered by the house to help make their case. Once they’ve gathered everything they needed, they take a vote.

If that vote passes, it goes to the Senate. They, like the House, review the evidence and take a vote. If the Senate’s vote doesn’t pass, then the President may be acquitted, and things end there.

What history tells us

There have been three impeachment inquiries, with only one actual impeachment.

The first was Andrew Johnson in 1868. The second was Richard Nixon in 1973. The third was Bill Clinton in 1998.

Which one was impeached? Bill Clinton. However, the Senate acquitted him and he was not removed from office.

When Andrew Johnson went through the impeachment process, the stock market (yes there was a stock market back then) really didn’t do anything, finishing that year up 1.5%.

During the impeachment proceedings with Nixon, the United States was in the middle of a recession. From the initial inquiry to the day he resigned from office, the S&P 500 fell about 30%.

With Clinton, however, the economy and the stock market were in the middle of an expansion. From beginning to end, the S&P 500 gained about 28% during his impeachment process.

What history tells us is that the period surrounding the impeachment will lead to greater volatility, but the long-term direction of the market is determined by fundamentals.

Be mindful of the headlines

The current impeachment inquiry with President Trump is dramatically different from the other three.

The internet makes updating the public instantaneous
Algorithmic trading can be programmed to execute orders when publications mention Trump, impeachment, etc.
We’re in the middle of a trade war with China, so uncertainty at home (U.S.) puts Trump in a weaker position to negotiate. What’s more, if impeachment looks more and more likely, Trump may be inclined to make a deal to help his case…even if it’s a bad one.

What should you do?

That depends. If you have 15+ years until you need to access your investments, I would tell you to do nothing. If you’re in retirement or it’s right around the corner, however, I would think about being a little more conservative.

When you grow more reliant on your retirement savings, your primary objective must move from capital appreciation to capital preservation.

I’ll link to several resources that should give you more guidance about retirement planning by age, investing in volatility, and more information about what’s been discussed here.

Four Ways To Optimize Your Personal Finances In 2017

February 9, 2017 by Isabella Blanca Leave a Comment

As 2017 picks up steam, more and more people are hunting for strategies to optimize their personal finance picture. Is that you? If so, let’s tackle several techniques you can employ to make it happen.

1. Visit Your Insurance Agent.

If you’re serious about optimizing your personal finances in 2017, be sure to visit your local insurance agent. I’m always surprised by the number of people who don’t think to find out what special deals and offers are available.

One insurance agent friend of mine said that you should check every year, because every time you have a birthday, insurance companies may have different solutions that you now qualify to receive. While one company specializes in people in their 20’s, for example, another may not offer great rates until you turn 30. To make your search for a local insurance agent simple, you can use an insurance agent search website that will allow you to be geo-specific.

2. Create A Detailed Budget.

While this advice might seem obvious and not worth mentioning, we’re always amazed on our podcast about the number of new studies every year that show how many people DON’T have a simple spending plan. Don’t have one? 2017 is a great year to start.

A budget will help you optimize your personal finances for 2017 in numerous ways… but how about the biggie: it gives you a roadmap to a very clear understanding of where you’re spending your money and how much disposable income you have after paying all of your bills….which leads us to #3.

3. Find Money-Saving Apps.

There’s an app for almost everything, isn’t there? I was just reading yesterday about an app that would monitor my toothbrushing activity. While the huge number of apps in the Google and iOS stores can be overwhelming, the growing popularity of apps can work in your favor as far as personal finance goes. From Mint to Finovera and Acorns, there’s a personal finance tool for just about every part of your financial life. Finding the perfect app can be as simple as conducting a simple internet search.

4. Talk To Your Kids About Money.

Kids need to be taught about everything, including how to spend and save money. To put this process in motion, it’s a good idea for you to set aside time each week to provide them with clear, practical examples of smart money decisions they can make to start building wealth. Not only will this process benefit your children, but it could help you maintain financial stability in your elderly years in the event that you need assistance from one of your kids. Don’t have your financial house in order? Helping your kids learn could be the kick in the butt you need to get your act together, too!

Conclusion

If you’re serious about getting your personal finances in order in 2017, what are you waiting for? Any of the strategies listed above can help you accomplish your objective. By systematically implementing these tips and tricks, you will likely find that 2017 is one of your most lucrative financial years yet. Good luck!

Photo: Steven Depolo

Seize the Day: 5 Cities That Offer Graduates Great Opportunities

July 20, 2016 by Average Joe Leave a Comment

The time after college graduation can be both exciting and a bit scary. After all, it’s your time to shine and seize the opportunities that come your way. While you may feel like renting your own apartment or house is the ticket to freedom and independence, living at home can help you save money on rent and perhaps be closer to your job.

But oftentimes this method of saving money can end up making people lazy, complacent and unambitious. It’s better to set the tone for the next couple years of your life and get out of your comfort zone. Sometimes that means moving to a new city in search of a new job, new friends and a new life. If you’ve decided it’s time to take the plunge into your adult life, it’s important to become educated about which cities provide the best opportunities for recent graduates.

Here are some quick stats on the five best cities for recent college grads.

Arlington, Virginia

Jobs in management, business, science or the arts: 67.1 percent
Percentage of population age 20-29: 21.4 percent
Percentage of population 25 and older with a bachelor’s degree or higher: 71.5 percent
Rent as a percentage of income for residents 25 and older with a bachelor’s degree: 31.4 percent
Median earnings for residents 25 and older with a bachelor’s degree: $72,406

Madison, Wisconsin

Jobs in management, business, science or the arts: 52 percent
Percentage of population age 20-29: 24.7 percent
Percentage of population 25 and older with a bachelor’s degree or higher: 56.8 percent
Rent as a percentage of income for residents 25 and older with a bachelor’s degree: 24.9 percent
Median earnings for residents 25 and older with a bachelor’s degree: $45,176

Washington, D.C.

Jobs in management, business, science or the arts: 60.5 percent
Percentage of population age 20-29: 20.7 percent
Percentage of population 25 and older with a bachelor’s degree or higher: 55 percent
Rent as a percentage of income for residents 25 and older with a bachelor’s degree: 26.1 percent
Median earnings for residents 25 and older with a bachelor’s degree: $62,475

Boston

Jobs in management, business, science or the arts: 47.2 percent
Percentage of population age 20-29: 24.8 percent
Percentage of population 25 and older with a bachelor’s degree or higher: 46.5 percent
Rent as a percentage of income for residents 25 and older with a bachelor’s degree: 29.1 percent
Median earnings for residents 25 and older with a bachelor’s degree: $55,810

Minneapolis

Jobs in management, business, science or the arts: 48.3 percent
Percentage of population age 20-29: 22 percent
Percentage of population 25 and older with a bachelor’s degree or higher: 48.1 percent
Rent as a percentage of income for residents 25 and older with a bachelor’s degree: 22.4 percent
Median earnings for residents 25 and older with a bachelor’s degree: $46,837

Keep in mind, it’s important to have a clean driving record for potential job applications. Don’t underestimate the possibility that certain jobs will require you to utilize your car during work hours. In general, it’s also important to stay safe on the road as you commute to and from work. Refresh your memory on the rules of the road.

If you find yourself grabbing a few drinks with friends after work or on the weekend, be smart about who drives. Use Uber or Lyft and eliminate the chances of getting a DUI. If you strive to maintain a clean driving record, you will — and it will save you a lot of unnecessary hassle in the future. Growing up means not only preparing for a big move, but also acting responsibly in all areas of your life.

Yes, Someone Is Taking Your Money

June 27, 2016 by Average Joe Leave a Comment

When we’re kids, the world of grown up finance seems distant and confusing. Bank accounts and mortgages are words we didn’t understand. Our only experience with money was the cash we carried to school, or the allowance our parents may have doled out to us every month or so. We might have lost a quarter while playing, or given up our lunch money to the bully at recess. Whatever it was, grown up money habits seemed safe and secure. We figured that once we got to be adults ourselves, we could lock away our savings in an impenetrable vault and live without worry that someone else might take it.

The thing is, though, people do take your money. Today more than ever, regular people are vulnerable to the predations of individuals and corporations who make it their business to steal or skim as many dollars as they can get access to. It’s not too different from the schoolyard bully situation, though today’s ripoff artists like to hide behind suits and expensive desks, or even cloak themselves in digital anonymity. For people looking to make their money go farther and last longer, it’s imperative to stop these characters before they start. It’s almost always easier to prevent theft than it is to recover funds. Here are some things to keep in mind.

PPI and Other Unwanted Subscriptions. PPI, or Payment Protection Insurance, is a fine financial product that was unwittingly foisted on many borrowers in England over the past couple of decades. It’s not that the insurance was bad. Most people just didn’t want it, and didn’t know that somewhere buried in their dozens of loan application documents was a contract they were signing for the coverage. Today there are many class action lawsuits in motion, and the PPI deadline is quickly approaching. There are examples of many similar ripoffs, but sometimes we’re our own worst enemies. Ever subscribed to entertainment or monthly shipments from Amazon or other providers? It’s easy to forget about these services and just let our funds slip away monthly.
Encryption and Anonymity. If I were to ask you which online passwords were the most important, which would you identify. No, not Facebook (though it’s not totally insignificant). No, not your HBO NOW account. Email and Banking? Yes! Totally! It’s getting easier than ever for hackers to crack weak passwords. When it comes to email, this is the gateway to all of the rest of the information available about you online. Most of us have our other passwords mentioned somewhere in our emails, so hackers often find financial passwords and move on from there. If they can get through a bank password without cracking your email, all the easier. Try Google 2-Step Authentication for your most important web accounts, and request that your institutions support 2-Step Authentication if they do not already.

It’s harder than ever to get through life without someone picking your pockets. In the digital world, it’s just like the old playground bully situation. Keep your stuff safe by paying attention and preparing for the worst. You might be able to keep your money to yourself.

The Advantage of Video Conferencing for IT Oriented Companies

May 10, 2016 by Average Joe Leave a Comment

Work for a company that doesn’t video conference? Here’s a way to save time and money….

Companies often fail to consider the potential applications of video conferencing aside from using it as a means of enabling multiple people from different regions to communicate with one another at the same time. There are actually new uses for the technology that have been developed which enables better service, internal IT assistance as well as new work-from-home opportunities for employees.

Use in Customer Support

Video has considerable potential in its use in customer support. CSRs (Customer Support Representatives) often encounter situations where they are having problems identifying an issue simply because the descriptions given by the client are very vague. To counteract such a situation, IT oriented companies such as Nvidia or AMD could utilize web chatting as a potential solution to the problem. All the enterprise would need to do is create an online support portal that enables consumers to contact a support representative. If the CSR is having issues with what the client is describing, a link can be sent that would create a video conference between the client and the CSR. This is possible so long as the client has a desktop, laptop or mobile phone that has a camera. This process could expedite a customer’s issues and lead to fewer instances where a client is dissatisfied with the customer service provided by a company.

Working From Home

Working from home is not a relatively new concept and has been around for quite some time. Its application though in mainstream corporate operations is somewhat doubtful. People work from home when they are sick or when the weather does not allow them to get out of their homes. Using it as an effective alternative to actually being in the premises of the company is at times not feasible since there are aspects to a job that require you to talk to one of your colleagues or bosses directly to get it done. This is one of the reasons why using visio conférence for IT companies through providers like Blue Jeans has become popular since it enables people to easily talk to their colleagues face-to-face while they work from home. While it is no replacement for actually being in the office, it does help in situations where a person is too sick to go to work or cannot reach the company due to snow, floods, or a wide assortment of weather conditions.

Use When Hiring New Personnel

Another potential way in which IT oriented organizations can use online discussions is for their various hiring practices. With IT departments often being located in different regions due to better tax deductions and hiring incentives, organizations often find themselves in a situation where the employees they want to hire are located in places where they do not have a recruitment center. One way of addressing this problem is to utilize web chats to have online interviews with their desired candidates. The advantage of this method is that this allows them reach talented individuals that they otherwise would not have been able to bring to the recruitment table. Not only that, it also allows HR departments to schedule interviews in such a way that it is convenient for all the parties involved.

Enabling Better Inter-Departmental Collaboration

The most obvious application of online discussions is helping companies develop better inter-departmental communication and collaborations. People like talking to one another face-to-face and this is an aspect that emails and phone calls cannot replace. We all like seeing reactions, facial expressions and the various subtleties of a person’s body language. It is what we have grown used to and expect when it comes to talking to other people. By using this technology, people become more at ease when it comes to talking to one another and this makes the process of communication and collaboration easier in the long run.

Increasing Responsiveness to Operational Issues within the Company

The last potential application of this technology is its use in improving an IT department’s response to software or hardware issues within the enterprise. Many businesses provide smartphones to their employees as both an incentive as well as a means of enabling the company to contact them through installed applications. One of the possible uses of these devices is to install an alert application that allows an employee to connect to someone within the IT department via a video call. Through this application, the employee in question can show the IT department what sort of issue they are having and get an immediate response regarding a potential solution that can be applied by the employee. This saves both parties a considerable amount of time and effort when it comes to resolving minor IT related concerns that can be fixed with a few instructions.

All in all, the use of video conferencing in IT-oriented companies holds a lot of promise given its versatility and potential applications.

Five Ways to Save on Your Business Insurance

March 25, 2016 by Average Joe 2 Comments

Business insurance can get expensive. In 2014, the average cost of a small business insurance policy was $725.33 across all industries, business sizes and policies, according to Insureon. This cost rose with the number of policies purchased. Businesses buying two policies paid an average of $1,405.86; those purchasing three paid $2,424.53; and those buying four spent $3,817.68.

Type of policy also affected cost, with general liability insurance averaging $425 and employment practices liability insurance averaging $1,585. Your industry may also affect your costs, with general liability insurance for a consulting company rising to $3,000 a year, while a landscaper might pay $15,000, says Trusted Choice.

All these costs add up, but here are a few strategies to help lower your rates.

Compare Prices

The most basic step to take is to compare rates from different providers. You’re probably familiar with Progressive’s commercials about comparing quotes on car insurance, but the company also offers quotes on business insurance policies including general liability insurance, commercial auto insurance, property insurance, workers’ compensation insurance, professional liability insurance and special policies designed for contractors.

Other business insurance sites to investigate are InsWeb and NetQuote.

Buy a Bundled Package

If your business needs multiple policy coverage, another way to save is by buying a bundled package, which can be cheaper than buying individual policies. A popular package for small businesses is a Businessowners Policy (BOP). As Forbes explains, a BOP typically combines general liability and property insurance with policies such as business interruption insurance, vehicle coverage and crime insurance.

BOPs do not typically include certain types of policies such as professional liability insurance, workers’ compensation or disability insurance. However, you may be able to negotiate a customized BOP that includes some of these policies added on. Some commercial insurance providers may bundle in your home and car insurance.

Choose a Higher Deductible

HomeInsurance.com editor Arthur Murray suggests lowering your business insurance costs by increasing your deductible, the amount of money you have to pay before your insurance policy pays their portion. Choosing a higher deductible reduces the amount of money your insurance company pays in the event of a claim, so if you’re willing to pay a higher deductible, insurance providers are willing to lower your premium.

Of course, this will make you liable for paying your deductible should you need to file a claim. Choosing a higher deductible will also discourage you from filing small claims, potentially making you eligible for a discount if you remain claims-free for a long period. Some providers may also offer a discount if you pay your premium in a lump sum.

Reduce Your Risk

Insurance companies are willing to offer discounts to clients who present less risk. You can lower your risk by taking proactive loss prevention steps.

For instance, implementing a theft prevention plan by taking steps such as installing IP cameras for surveillance can help persuade your insurer to offer a lower rate on crime insurance.

Starting a workplace safety program and making disaster preparation plans are other examples of steps to take to reduce your risk in the eyes of your insurance provider.

Work with Your Agent

Consult your insurance agent for insight into the best ways to bundle your insurance and which prevention steps to take. You should also keep your agent updated about any major changes in your business that may affect your insurance needs. Allstate recommends reviewing your insurance coverage with your agent once a year.

What the recent stock market turmoil could mean for your finances?

February 24, 2016 by Average Joe Leave a Comment

What Could Happen To Your Finances?

The financial markets are highly unpredictable at the moment. It seems that every day there is a news story about another crash just around the corner. It can be scary for those who have their money tied up in the stock markets. Even those who do not have a lot of money in the markets may be worried, as the impact of changing stock market conditions can have an effect on their financial health as well.

It is always a possibility that the markets could take a sudden downturn and cause real problems. There is little that any one investor can do to stop the forces of the market. The markets simply react how they are going to react, and the rest of us have to do our best to ride the waves.

Current issues facing the market include issues in China as well as concerns about the Federal Reserve and what it will do with interest rates. The Federal Reserve raised interest rates a quarter of a percent at the very end of 2015. It was the bare minimum that they could raise them, and the first time that they had raised rates in nearly a decade. However, this did not stop the markets from reacting in a big way.

Many fear that the Federal Reserve raising interest rates could lead to a lot of devastating outcomes for the economy. They worry about a global economic slowdown, and about inflation taking off. However, as Reuters reports, there is probably little to be too concerned about in the immediate future.

There is every chance that the interest rate issue will be a non-factor for most. However, those looking into getting a personal loan of some kind may want to take note of these changes and how they could play a role in their life. Consider looking at a personal loan calculator for more information about what the interest rates could mean for how much you can borrow and what amount you will have to pay back.

The best thing that anyone can do when faced with stock market volatility is to wait things out and continue to invest in the markets the same as before. Most of the time volatile moves in one direction or the other are temporary and something that can be easy to overreact to if given the opportunity. All people should try the best that they can to ignore such movements and carry on as planned into the future.

Theories of Fundamental Analysis

February 23, 2016 by Average Joe Leave a Comment

Forex traders utilize fundamental analysis to make better decisions when trading. An extremely valuable tool that forex traders use consistently to better their positions within the trading world is reviewing economic indicators and announcements. The forex trader can utilize a financial calendar to keep track of these indicators and when they are to take place. Presently, there are numerous economic indicators which the forex trader should keep a close eye on to help them better position themselves in a tough trading market. These calendars will provide you with the data point you use to better determine the future direction of the forex market.

Again, there are numerous economic indicators which the forex trader can take advantage of to better position themselves within the markets. Some of these economic indicators consist of The Consumer Price Index (CPI), Producer Price Index (PPI), Purchasing Managers Index (PMI), Non-Farm Payroll, Industrial Production Index (IPI), Retail Sales Report, Gross Domestic Product (GDP) etc.

The Consumer Price Index can be considered one of the most important economic indicators looked at/reviewed by forex traders. The Consumer Price Index is the benchmark for inflation for the United States economy. The Consumer Price Index ascertains the change in the price of a basket of goods and services. Examples of items within the Consumer Price Index would be Other Goods and Services (tobacco, haircuts etc.), Medical Care (medical supplies, doctor’s services etc.), Housing (fuel oil, bedroom furniture etc.) & Food and Beverages (wine, milk, breakfast cereal etc.).

The Producer Price Index or PPI is an additional indicator that measures inflation within the United States. In a nutshell The Producer Price Index is a gauge of wholesale prices at producer level. Items included in the PPI would be items such as consumer goods and capital equipment. The major difference between the PPI and CPI is that the PPI does not include services within its calculation. In addition, the Producer Price Index is reported each month.

The Purchasing Managers Index is another regularly utilized economic indicator used by forex traders. The PMI gauges and is a barometer of business activity within the United States. The market indicator reviews both the manufacturing as well as the services sectors. The Purchasing Managers Index is a survey which queries those respondents about their perception of business variables and if they believe the variables will change from the previous month.

The Non-Farm Payrolls is a key indicator which captures the payroll data for a majority of the United States. The Non-Farm Payrolls does not include non-profit employees, workers within private households, government employees and farm employees. This indicator is also released on a monthly basis and is also a strong indicator of the health of the United States Economy.

Similar to the Consumer Price Index, the Gross Domestic Product is the most important of the economic indicators tracked by forex traders. The Gross Domestic Product includes the total dollar value of goods as well as services produced over a finite time frame. The Gross Domestic Product represents everything produced by individuals and businesses along with salaries of workers. The GDP is scheduled and broadcasted each business quarter by the Department of Commerce.

In closing, fundamental analysis should be utilized by every forex trader and have economic indicators scheduled like clockwork on their financial calendars. Fundamental analysis can help traders make better decisions when it comes to making financial decisions related to forex trades. Fundamental analysis incorporates new information to determine the future direction of a currency pair and provides you with the tool you might need to trade the forex market.