| | Advanced Search

 

Revs Snap The Skid, Win 3-0 Over Colorado—The New England Revolution took the field at…

Block Calls for End of Political Corruption in Rhode Island—Republican candidate for Governor Ken Block has called…

NEW: Smiley Unveils Good Government Plan; Receives Roberts’ Endorsement—Democratic candidate for Mayor Brett Smiley has unveiled…

NEW: Fung Calls on Chafee to Rescind Caprio Beach Contract—Cranston Mayor and Republican candidate for Governor, Allan…

NEW: RI GOP Calls for Palumbo to Step Down—Rhode Island Republicans have asked for State Representative…

Organizations Past Due on Police Detail: See Who Owes the Most—Organizations Past Due on Police Detail: See Who…

Chafee Confirms State Investigation into Caprio Beach Contract; Will Block FOIA Requests—Chafee Confirms State Investigation into Caprio Beach Contract;…

Santurri: Will The Democratic Race for Providence Mayor Become Primarily Negative?—Santurri: Will The Democratic Race for Providence Mayor…

It’s All About Education: High Stakes Testing & Common Core Debate—It’s All About Education: High Stakes Testing &…

Angela Moore Fashion Show and Champagne Brunch Debuts at Rosecliff—To celebrate the 375th anniversary of Newport, the…

 
 

Friday Financial Five – September 21st, 2012

Friday, September 21, 2012

 

Facebook stages a mini-comeback . . .

Was QE3 necessary?

Last week’s announcement about another round of Quantitative Easing was received well by the markets, especially for commodities, but at what cost? QE3 will continue a weak dollar policy and it emphasizes that the United States’ will be in training wheels for an open ended amount of bond buying. The Federal Reserve continues to move markets, but that’s really not their purpose. With housing numbers appearing to rebound, is it possible our economy would have experienced a natural expansion without Fed intervention and the accumulation of more debt?

Revisiting the tax numbers

With a few months to go before the Presidential election, it looks like the discussion is shifting from the totality of the economic numbers to federal tax policy. Taking a look at numbers from the Tax Policy Center, 46 percent (47 percent according to other sources) of households paid no federal income tax in 2011, including 94 percent of those making less than $50,000. The percentage of non-contributors drops to 18 percent when you factor in contributions to federal entitlement programs. The combination of Bush-era tax cuts and recent extensions of several deductions helped create this tax framework and partially offset the last decade’s wage stagnation for the nation’s lowest earners.

Corporate profits expected to drop

Profits are expected to drop for the first time since 2009, and that could really dampen the unemployment numbers going forward. Following the Great Recession, companies moved swiftly to reduce employees and overhead, and in return, saw prodigious profit growth. If large companies start seeing profits drop, it’s going to take a greater surge of new businesses and entrepreneurs to lead the unemployment recovery.

The pension decision

For those of us in the middle of our working years, traditional pension plans are being phased out. That’s not the case for soon-to-be retirees, who will be given an option of how to take their retirement money once they call it a career. The choice is usually to take the money in a lump sum or to spread the money out in periodic payments based on the life of the retiree, and possibly the retiree’s spouse. The first consideration is longevity. If there are health issues, the lump sum might be the way to go. If you’re healthy and take the lump sum, you would need to generate enough return to match the internal rate of return for the annuity income stream. If you do take the annuity and have a spouse, you’ll want to make sure there’s enough money available if you pass away first.

IBM trying to capitalize on Watson

The battle to dominate information technology continues on. You might remember Watson, the data analyzing computer that took out the best champions on the television show Jeopardy! Similar to Apple’s Siri, IBM has plans to make their high profile product available on a handheld device to provide information for corporate partners. It’s already in use providing medical and financial feedback with different companies. IBM’s goal is to broaden Watson’s knowledge base and increase the company’s customer base and revenue stream.

Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected]
 

 

Related Articles

 

Enjoy this post? Share it with others.




Write your comment...

You must be logged in to post comments.