Understanding How Economic Data Triggers Markets


A lot of times, markets aren’t steadily moving in one direction or another. They’re moving sideways, waiting for some event or release of economic data that will trigger the markets. With scores of data out there, which ones are actually useful for making markets move? I’m going to cover that in this post. Note: Something to keep in mind is that a certain piece of economic data itself cannot move the market. Like the assassination of Archduke Ferdinand (which lead to WWI), an economic indicator cannot cause the market to move on its own. It merely acts as a trigger. Unemployment Reports The unemployment reports, consisting of the Initial Claims and Unemployment Rate, are probably the two most frequent pieces of economic data that are used as triggers. Why? Simple – because they’re important. When the bulls (or bears) need to find a piece of data to trigger the market … Continue reading

Alternatives To Paying Income Tax

flat tax, consumption tax, national sales tax, simple tax code

73,608 73,608…what is the significance of that number? If you answered “the number of pages in the 2012 US federal tax code” congratulations, you win! The federal tax code is bloated and over complicated. Every election it seems a new set of politicians from each party pledge to make simplifying the tax code a top priority, yet it never happens. Judging from the feedback on my post about preparing your own taxes it seems more and more people are opting to have a professional do their taxes for them. Really, who can blame them? Its gotten to the point where even those of us that do prepare our own tax returns can’t do it without the aid of complex tax software. Instead of tinkering with our current system and making it even more complex as we strive for fairness, why not throw the entire thing out the window and explore … Continue reading

The Case For A Higher Minimum Wage


Last week during the annual State of the Union address, President Obama laid out his case for raising the national minimum wage. He said: “…Today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. That’s why, since the last time this Congress raised the minimum wage, nineteen states have chosen to bump theirs even higher. Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. This single step would raise the incomes of millions of working families…” Raising the minimum wage always sparks an intense debate. In the days since the State of the Union address I’ve seen numerous blog … Continue reading

Investing Experts and the Herd Mentality


Buy low, sell high.  Any idiot off the street could repeat this phrase to you as if they had the secret recipe for investing success. Honestly, it’s good advice. One of my favorite investing quotes, and one I try to base my investing strategy around comes from the great Warren Buffet. He famously said “Be greedy when others are fearful, and fearful when others are greedy.” On the surface it seems like Buffett is saying the same thing a different way. But what I love about his quote is that it’s actually much deeper than simply buying low and selling high. His quote also illustrates why “buy low, sell high” is much easier said than done. In the investing world, almost like no place else there is an amazing herd mentality. When things are going good, such as over the past month, all the talking heads will tell you how great of … Continue reading

Everything You Need To Know About The Fiscal Cliff


The Fiscal Cliff is coming, and only our elected officials can stop it. You can argue among yourselves which part of that sentence is the scariest, but on December 31st of this year the United States is set to head over the “Fiscal Cliff”. Here is what you need to know about it: What is the “Fiscal Cliff”? The term “Fiscal Cliff” – coined by Fed Chairman Ben Bernanke – is basically an economic version of Hurricane Sandy, where all the right stars align to make an already powerful and damaging force all that much more destructive. The forces combining to create the fiscal cliff are numerous: 1. The Bush-era tax cuts are set to expire on December 31st of this year. If they are not extended income tax rates will rise by ~3% across the board. The 10% tax bracket will also disappear.  In addition the child tax credit will be … Continue reading

Do 47% of Americans Really Pay No Taxes?


Taxes. As the saying goes, “the only things you can count on in life are death, and taxes.” They’re just one of life’s necessary evils and we all have to pay them….or do we? A common  argument, and one that’s getting a lot of attention right now is the argument that 47% of Americans don’t pay any taxes and are just living life completely dependent on government support. It’s convenient that this is making headlines right now, because it touches on one of my biggest pet peeves when it comes to talking taxes: people only focus on income taxes. I’m going to try to stay away from all the political stuff and focus on the core of the argument: Do 47% of Americans really pay no tax? If so, who are they? “The 47%”: True or False? Do 47% of American’s pay no federal taxes? Sort of. It is true that about 47% … Continue reading