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Learn to Be Brilliant & Generate Good Ideas Consistently

By Posted on In Personal Development, Uncategorized

If you’re in a field that requires creativity, check out The Accidental Creative. For me, no two client situations are ever the same. And as a result the strategies are customized every time. The folks behind The Accidental Creative put out some great information that help me improve the way I develop and communicate strategies for my clients.

Their premise is refreshing: They want to help people be more creative in jobs that you and I don’t normally expect to require creativity. And they believe that creativity can be taught so anyone can then think outside the box (if they apply themselves).

If you’re moving up in your career or working part time or volunteer, go through their site and listen to a podcast or two. It’s a great podcast to listen to on the ride home from work.

The Experts And Their Conflicting Predictions

By Posted on In Economy, Finding Confidence, Investment Behavior, Uncategorized

It’s become comical to see and watch the supposed experts lay out such convincing rationales explaining what the future holds. In the reading of the tea leaves, some are seeing some pretty dark days ahead, while others think all of the market volatility is a normal correction. This became especially clear when I recently attended the InsideETF conference in Florida. None of the economists and experts were wishy-washy – They were either very bullish or very bearish. Their charts and arguments were very strong and they would even take shots at each other to try to poke holes in their arguments. It was like watching a presidential debate!

The final speaker, Liz Ann Sonders of Schwab, put up a chart that really stood out to me:
Investor Sentiment

Liz asked “Have investors ever felt thrilled or Euphoric about the performance of the market at any point since the depths of the 2008 and 2009 recession? The answer is “No”. Despite some pretty impressive rates of return, investors have remained in the Hope and Optimism stage (maybe excitement). Every time the market corrects, investors are quick to move to safety. That’s a good thing! When the market becomes so hot that investors expect it to go up, then a problem is about to occur.

If you want to read the rest of her points, here is a good summary

China is a Mirror

By Posted on In Economy

This stock market sell off is being blamed on news that China’s economy is weakening, but it is important to note that China’s news is a mirror on what is going on in the rest of the world including the U.S.  China is an industrial powerhouse built on exports and the global economies are just not buying Chinese exports like they used to. Furthermore, raw material economies like Brazil and Australia depend on China to import huge quantities of their raw materials to manufacture finished goods which China then sells to the world. So when China doesn’t sell to the developed world, it doesn’t buy from the raw material economies.

Many attribute this to what changed in 2008. They call it ‘peak debt’. The pillar of aggregate demand (the middle class) maxed out on the money/credit they could or would borrow and spend. So demand for Chinese goods began to falter and the demand for raw materials began to taper off. This effect was delayed as the Chinese government injected stimulus to support their economy;  building even more capacity hoping demand for their exports would return. It didn’t.

Compounding this was the cure the developed world’s central banks undertook only made the problem worse. To reinvigorate economic activity or ‘aggregate demand’ they dropped interest rates to 0% (Quantitative Easing, or Zero Interest Rate Policy). Corporations worldwide used these low interest rates to expand even more capacity to meet the expanding aggregate demand they thought would soon appear.  But it didn’t happen. The American and European middle class was under pressure and not willing or able to continue  their  borrow-and-spend splurge. The expected resurgence in demand for Chinese exports never happened.

China’s economy is cooling because the world’s economies cannot increasingly import their exports. Without the world’s need for China’s exports, they have less need for the raw materials to manufacture those exports. Hence, a concurrent collapse in commodities prices, and not just oil, but iron ore, copper, zinc, etc. This lack of demand for exports from raw material economies then boomerangs back on less demand for Chinese exports, and so on.

It is not just China’s economy that is weakening, it is worldwide.

The Oil Glut Continues to Grow

By Posted on In Economy, Uncategorized

Oil is once again making headlines – OPEC can’t agree on pricing, which has led to oil hitting record lows. It seems that every major oil producing country is battling for market share and willing to keep prices as low as they can so they can keep their current customers. The UK’s Telegraph has a unique take on what all of this means

One topic not addressed in the article is the multiplier effect that occurs when US consumers save a dollar at the pump. Instead of saving it, they spend it. The money that once went to OPEC countries to pay for oil is staying in the US. That family that saved $500 over the year as a result of lower gas prices, may have used those extra dollars to hire a painter to paint a room in their house. That painter then turned around and bought something for himself and the multiplier effect continues. According to PIMCO, that dollar saved at the pump will be exchanged about 9 times before it is eventually winds up in a savings account! So, low oil prices may be helping the economy.

Important Changes to Social Security

By Posted on In Retirement, Taxes, Uncategorized

Big changes to Social Security usually take years to plan, develop and roll out. But not this time. Congress has suddenly shut down two popular claiming strategies that have been growing in popularity over the last few years. File & suspend and restricted application claiming strategies will disappear in the next 6 months.

I’m not surprised that these strategies have been cancelled. They exploited a loophole in Social Security and in some cases allowed retirees to collect more than the social security system could handle. What’s most surprising is how quickly these changes will occur. See the chart below to see how it affects you.

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Interested in learning more?

The Team

H.L. Rives III, CPA
Cliff Jarvis
Michael Lecours, CFP®
Ronald G. Lecours, CFP®

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