Tag Archives: Jacob Gold & Associates Inc.

economy

What can the U.S. Count on for Future Growth?

2012 was a smoother ride than expected for the markets. However, it was and will continue to be turbulent in the political arena. Hopefully, economics and politics will be able to work together and define a path that will create a stable environment for everyone. There are many exciting advances in different areas of our economy today that may provide positive momentum for us in the future. Some of those areas that investors may want to pay attention to is real estate, energy, and manufacturing.

Real estate in our country can have an impact on growth as well as how consumers spend. Including, not only the purchasing of new and resale homes but household items such as appliances, furniture, landscape items, and materials for home remodels. It’s been nearly 6 years of experiencing a decline in the real estate. Home owners and investors have been keeping an eye out for a change to a positive direction for real estate. Are we here yet? Based on some data from the S & P Case Shiller Index we are starting to see some stability in several areas of real estate. (The S&P Case Shiller Index is a leading financial service technology solution of data from the Federal Housing Finance Agency) source: Fiserv, Inc. This data indicates improvement and are expected to see housing grow for 2013 and 2014.

Energy is another sector that is improving and may provide the U.S. with opportunities for energy independence. This may help the U.S. harness a substantial source for oil and gas which can help control pricing. This is a great opportunity, however it will take years of continued research and development as well as technology improvements before the U.S. can benefits from these resources. With patience and technology enhancement in the next few years the U.S. has the potential to have the available resource of energy to support our country for decades. It can also create a profitable opportunity for exporting for the U.S.

Another area of improvement is manufacturing. The U.S. is on the brink of developing a power house in the manufacturing sector. We’ve seen many well known companies move a portion of their manufacturing back to the U.S. Some of these include companies like Airbus, Michelin, Starbucks, Dow Chemicals, Caterpillar, GE, and Ford Motor Company This is most likely caused due to an increase of labor cost and lack of stable energy source in places like China. We will continue to import and export resources but having more control of manufacturing in U.S. can provide improvements in employment, lower exporting cost, and over all benefits for the U.S. economy.

 

This information was prepared by Michael Cochell of Jacob Gold & Associates Inc. and is for educational information only. The opinions/views expressed within are that of Michael Cochell of Jacob Gold & Associates Inc. and do not necessarily reflect those of ING Financial Partners or its representatives. In addition, they are not intended to provide specific advice or recommendations for any individual. Neither ING Financial Partners nor its representatives provide tax or legal advice. You should consult with your financial professional, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decisions

 

 

Financial Statements

Using Financial Statements, Tools To Plan Your Future

Know what you have before planning the future using specific financial tools and financial statements.


There are many famous quotes about the importance of enjoying the present and not focusing too much on the past or the future. We do this in our personal lives and with many of our responsibilities, such as work, education and our finances. As a financial planner, I meet with many people seeking assistance with meeting specific financial goals and find that many times they have ideas of what they want and what they have already done. This is great, but before planning the future, it is important to know what you have now, a snapshot of your current situation. This is a critical piece, not only for individuals, but businesses, too.

Before focusing on investment news, what stocks are hot, politics and what might be a new trend in the investment world, investors should focus on understanding their current position. It is nearly impossible to determine the right mix of investments and what strategies may be appropriate without knowing this. Investors can use specific financial tools, including different financial statements, to help them identify what they have. These tools can apply to both individuals and businesses.

The first step is a data-gathering process. The second is imputing the information from various financial statements. For individuals, we would include a statement of financial position and a statement of cash flow. For business owners, we would include a balance sheet, income statement, statement of cash flow, and a pro forma statement. These are great tools that can help identify one’s financial position.

When creating a statement of financial position, one will clearly list his or hers assets and liabilities. Assets, such as real estate or other valuable items, should be considered at current market value (the price that one is willing to pay today for it). Assets should be categorized as cash and cash-equivalents, such as checking, savings, money market accounts, stocks, bonds, mutual funds and life insurance. Liabilities include credit cards, auto loans, unsecured loans, real estate mortgages, education loans and personal debts. This will provide individuals a balance sheet of assets at a particular point in time.

The next important piece is a statement of cash flow. Some of us may know this as an income statement. This statement will show inflow of income and outflow of income at a particular point in time. The inflow may include salaries, sale of assets, investment dividends, rent and bonuses. Outflows may include mortgage payments, auto payments, credit card payments, insurance, general living expenses and taxes. The statement of financial position and statement of cash flow are valuable tools to have before implementing an investment plan.

A pro forma statement is the last tool to use and includes future projections of the balance sheet and cash flow statement. This is important because as our economy and life situations change, we may need to adjustment our plan as needed. The same process also applies to business owners. However, the business entity will need to consider many more details regarding assets and liabilities, as well as inventory and staff.

Once the financial statement process has been completed, one will have a greater understanding of his or her position when beginning an investment plan. In addition, this process can improve the odds of success and allow more control in an investor’s decisions.

For more information about financial statements and financial planning, visit jacobgold.com.

Securities and investment advisory services offered through ING Financial Partners, Inc. Member SIPC. Jacob Gold & Associates, Inc. is not a subsidiary of nor controlled by ING Financial Partners, Inc.

This information was prepared by Michael Cochell of Jacob Gold & Associates Inc. and is for educational information only. The opinions/views expressed within are that of Michael Cochell of Jacob Gold & Associates Inc. and do not necessarily reflect those of ING Financial Partners or its representatives. In addition, they are not intended to provide specific advice or recommendations for any individual. Neither ING Financial Partners nor its representatives provide tax or legal advice. You should consult with your financial professional, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decisions.

Financial Information

Properly Understanding Financial Information In The Media

Our society is constantly overwhelmed with financial information either by television, internet, cell phones or print media. Deciding which is best and most accurate can be very daunting for the average investor. In addition to choosing the right media source, investors also have to apply that information to their financial situation. In many cases, this can become a full time job, very challenging and requiring constant monitoring.

Minimal education is provided to us by our parents, peers or in school about how our financial system works. However, since it is an ever changing industry the information we have learned in the past may not be relevant today. Therefore, it is critical to understand what reliable information is and what may be misinformed facts.

These media sources are a critical role in today’s society but also come with some information risk. Everyone’s interpretation is different and we must realize that a percentage of the information is purely entertainment. In today’s environment, the media is influenced by marketing dollars, and understanding what may be accurate information and what may not is important to understand.

With tons of information about the financial industry — that (in many cases) is indirectly affected by other sources such as politics, government, other countries, weather, market shifts, innovations and technology — being properly informed and avoiding the “junk” information can be difficult, but must be done. As investors, we must not only focus on the investment, such as a stock, bond or mutual fund, but consider the strategies in place to account for current events.

Also, once an investor has decided on an appropriate investment strategy he or she will then manage the investments or work with a financial professional. Information is key and deciphering that information according to a situation can be difficult when creating an appropriate investment strategy as well as making changes within a portfolio as needed based on economic shifts. Many times, working with a financial professional can help investors use up to date, reliable information to meet financial objectives.

For more information regarding understanding financial information, visit jacobgold.com.

 

Securities and investment advisory services offered through ING Financial Partners, Inc. Member SIPC. Jacob Gold & Associates, Inc. is not a subsidiary of nor controlled by ING Financial Partners, Inc.

This information was prepared by Michael Cochell of Jacob Gold & Associates Inc. and is for educational information only. The opinions/views expressed within are that of Michael Cochell of Jacob Gold & Associates Inc. and do not necessarily reflect those of ING Financial Partners or its representatives. In addition, they are not intended to provide specific advice or recommendations for any individual. Neither ING Financial Partners nor its representatives provide tax or legal advice. You should consult with your financial professional, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decisions.

Low Rate Environment

Dealing With A Low Rate Environment

Dealing with a low rate environment

Many investors watch day-to-day market performance to evaluate their investment holdings. Do I buy, do I sell, hold on, or consider other options such as sitting in cash or CDs to earn a return? There are many factors to think about. Having a low rate environment is one of them. This is a critical piece of the pie and can affect all of us for a long time, especially retirees.

How does this work? The Federal Reserve, led by Ben Bernanke, along with the Federal Open Market Committee, meets eight times a year to determine the federal funds rate. The federal funds rate is influenced by the Fed in three different ways.

First, the Fed can buy Treasury securities from the market to reduce government debt. This will lower the rate.

Second, the Fed can adjust the reserve requirement that capital banks must have on their books. This may reduce the amount of loans banks offer their customers which may affect what consumers pay to borrow.
Third, the Fed sets the discount rate. The discount rate is the rate at which banks can borrow from the Federal Reserve Banks. If this is increased, it creates higher rates for consumers, which usually reduces the amount investors save. The Fed’s influence on rates affects all of us and must be considered in retirement planning.

Having a low rate environment has its pros and cons. For borrowers, it is very positive. It allows individuals and businesses to get cheap money on mortgages, credit cards, auto loans, business loans, and other related borrowing needs. As a consumer, you are able to save by paying lower interest rates and use that savings to spend more on necessities. On the institution side, companies are able to borrow from other banks and the Federal Reserve at low costs. This provides opportunities for acquisitions, mergers, and investing in their companies for future growth.

On the negative side, financial institutions that are required to meet certain deposit minimums may only yield a low return, making it more difficult to generate a profit. Banks and financial institutions earn less on their reserves. Many times, companies will increase their fees to compensate for low-interest rates, which cost consumers more.

Also, having low interest rates provides for low returns on fixed income type of investments such as CDs, money market accounts, and treasury securities. Retirees who have low debt and rely on fixed incomes are feeling the pinch more than ever. In some cases, retirees who depend on low risk returns are having to turn to equity or bond positions to offset the low rates of C’s and cash equivalents. This becomes very challenging and presents a constant balancing act for retired investors.

In today’s market, it is much more difficult to figure out the most appropriate investment for an individual, especially one that is already retired. Most retirees rely on low risk investments to generate returns that will keep up with inflation of about 3 percent. This is much more challenging to do when rates are as low as they are today. According to the Fed’s last meeting, interest rates will continue to be low (near zero) until 2013.

When rates do start to rise, investors will need to be proactive and make change to their portfolios. Learning to manage our investments according to risk tolerance and needs is a constant battle. Working with a financial professional can help guide investors through volatility and rate changes.

For more information about having a low rate environment, visit www.jacobgold.com or call (480) 998-4653.

[stextbox id=”grey”]Michael Cochell is associate vice president at Jacob Gold & Associates Inc. This information was prepared by Michael Cochell of Jacob Gold & Associates Inc. and is for educational information only. The opinions/views expressed within are that of Michael Cochell of Jacob Gold & Associates Inc. and do not necessarily reflect those of ING Financial Partners or its representatives. In addition, they are not intended to provide specific advice or recommendations for any individual. Neither ING Financial Partners nor its representatives provide tax or legal advice. You should consult with your financial professional, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decisions. [/stextbox]