SCR Blog
16 Jun

On the Fed

Investors trading in the major markets may have noticed a decent amount of market volatility in response to the anticipated news regarding the Federal Reserve’s continuing economic stimulus through their bond purchasing program. The Federal Reserve may help ease some of this volatility in the coming week.  While they aren’t likely to express exactly when we can expect to see the scale-back on the bond-buying program, policy makers may want to help calm down the markets.

 

Most Americans feel like the economy is improving; this is evidenced through improved consumer confidence and rising home values as well as other key economic indicators. However, the U.S. jobs market needs to improve at a faster rate than its current 2% growth rate for things to really turn around. The coming week will give us a variety of reports that show us what kind of progress we are actually making.

 

While all of the news seems to be about the markets hitting record highs, there is still a consistent chorus from those who fear that the bottom may be falling out - it’s hard to know if staying in this market is really worth the risk. If we step back and just compare the last 100 years of data on the performance of the stock market since it was modernized, the average return one can expect in the stock market is 9% on an annual basis. Of course there are bad years and there are good years, but comparing 100 years of data is a good way to analyze whether or not the stock market is truly worth the risk.

 
28 Apr

News Matters

It seems like we keep telling the same story. The market has been rallying all year, despite sub-par earning and slower economic growth than was expected. Friday the GDP came in .5% lower than its 3% expected growth, but the markets barely responded. Which forces some of us to consider an important question, is the market desensitized to news?

 

Saving for retirement in the US seems like a daunting task for most Americans, but it goes without saying that at some point, just about everyone will need to retire. Yet, according to a recent Marketwatch article, only 66% of Americans in the workforce actually save a portion of their paychecks and most of those savers have less than $25,000 tucked away for retirement. If those Americans retired today, they only have enough to live one year just above the poverty line, obviously not enough if they would like to keep their standard of living for many years to come. So if the average American is so grossly unprepared for retirement, how should Americans go about saving for this inevitability?

 

After the recession hit in 2008, most people willing to venture out to start a small business were "necessity entrepreneurs", people who has been laid off due to the economic downturn that decided to open small business out of need, more than choice. However, with the end of the recession in sight, the traditional entrepreneur seems to be coming back and they are appearing in large numbers - the most, in fact, since 1999.

 

With the recent rally in the market, it makes investors beg the question, when things will turn the other way? There is speculation that we have entered the next stock market bubble. Some believe that stocks aren’t currently trading on valuation, but instead they are trading on sentiment and cognitive biases. Some believe that that technology and the media are playing a larger role in market movements and investors are responding as a group or herd, much like lemmings.

 

Online shopping has always been a safe haven for consumers in search of a quick, convenient and generally low cost way to shop without leaving their living room. Many of these shoppers save on sales tax, when purchasing from online retailers that do not have physical locations within the state they live. This added bonus to online shopping could be removed in the coming week, as the senate moves forward to vote on what is being called the Marketplace Fairness Act.