|
|
|
FINANCIAL TEA TIME
Your freshly brewed cup of financial updates
April 2010 |
Greetings!
Whatever happened to spring? Suddenly its winter again - but it seems like the stock market may be somewhat warming up. We ended the first quarter of 2010 in a relatively uneventful fashion compared to the first quarter of 2009. The economy however continues to have reasons for concern, even as the good news is starting to trickle in.
Let's do a market review for the previous quarter and take a look forward. We'll also talk about the risks of using a debit card as versus a credit card. And finally, we hope you get a chuckle out of the Lighter Side. |
|
Month in Review
In spite of a rocky start this quarter, the stock market continued its rally and ended on a positive note. For the first quarter, Dow Jones Industrial Average was up 4.1% and Standard and Poor's 500 stock-index gained 4.9%.
Earnings reporting season begins April 12th and portfolio managers and strategists alike are increasingly confident that the earnings for the first quarter will be strong. Brian Belski, chief investment strategist for Oppenheimer & Co., argues that "the recovery of earnings is following the historical script. We've seen a V-shaped bottom in the stock market. We're in the process of seeing a V-shape in earnings. And then the economy will follow suit."
"The resumption of earnings is the primary incentive, I think, for investors," says John Lynch, chief equity strategist for Evergreen Investments. "Earnings lead to business spending, which will lead to hiring, which will lead to consumer spending."
Have you heard enough about the health-care reform? No? Let me help: President Obama signed into law a health-care reform bill that will provide coverage to 32 million currently uninsured people and penalize those who fail to get insured. This bill is expected to cost about $940 billion and will raise taxes on dividends, capital gains and Medicare for wealthier Americans.
Federal Reserve Chairman Ben Bernanke told a House committee last week that the bank will be ready to tighten credit "at the appropriate time." That implied no imminent rate hikes in the near future. U.S. economic data has been getting stronger but not strong enough for the government to start raising interest rates. In comparison, China and India are taking measures to make monetary policy more restrictive. In addition, the financial woes coming out of Europe make the U.S. look more attractive. As a result, U.S. domestic stocks with little or no revenue from overseas are up 11% for the quarter compared to global cyclical stocks which are up 5% for the year to date. Another point in case for diversification in portfolios.
|
| On the Lighter Side
|
10 Places NOT to Use Your Debit Card
Here's an article I thought was timely. I found it on www.finance.yahoo.com and it originally came from www.creditcard.com, so considering it may be a bit biased, they still make some interesting points and provide helpful hints we all can use. This article has been edited for space.
Sometimes reaching for your wallet is like a multiple choice test: How do you really want to pay? While credit cards and debit cards may look almost identical, not all plastic is the same. Here are10 places and situations where it can pay to leave that debit card in your wallet:
1. OnlineThe Federal Reserve's Regulation E sets a consumer's liability for fraudulent purchases at $50, provided they notify the bank within two days of discovering that their card or card number has been stolen.Most banks have additional voluntary policies that set their own customers' liability with debit cards at $0, says Nessa Feddis, vice president for the American Bankers Association. But the protections don't relieve consumers of hassle: The prospect of trying to get money put back into their bank account, and the problems that a lower-than-expected balance can cause in terms of fees and refused checks or payments, make some online shoppers reach first for credit cards.
2. Big-Ticket Items
With a big ticket item, a credit card is safer, says Chi Chi Wu, staff attorney with the National Consumer Law Center. A credit card offers dispute rights if something goes wrong with the merchandise or the purchase, she says.
In addition, some cards will also offer extended warrantees. And in some situations, such as buying electronics or renting a car, some credit cards also offer additional property insurance to cover the item.
3. Deposit Required
"This is where you want to use a credit card instead of a debit," says Peter Garuccio, spokesman for the national trade group American Bankers Association. That way, the store has its security deposit, and you still have access to all of the money in your bank account.
4. Restaurants
"To me, it's dangerous," says Gary Foreman, editor of the frugality minded Web site The Dollar Stretcher. "You have so many people around." Foreman bases his conclusions on what he hears from readers. "Anecdotally, the cases that I'm hearing of credit or debit information being stolen, as often as not, it's in a restaurant," he says.
The danger: Restaurants are one of the few places where you have to let cards leave your sight when you use them.
5. You're a New Customer
Online or in the real world, if you're a first-time customer in a store, skip the debit card the first couple of times you buy, says John Breyault, director of the Fraud Center for the National Consumers League, a Washington, D.C.-based advocacy group.
That way, you get a feel for how the business is run, how you're treated and the quality of the merchandise before you hand over a card that links to your checking account.
6. Buy Now, Take Delivery Later
Buying now but taking delivery days or weeks from now? A credit card offers dispute rights that a debit card typically does not. "It may be an outfit you're familiar with and trust, but something might go wrong," says Breyault, "and you need protection."
7. Recurring Payments
We've all heard the urban legend about the gym that won't stop billing an ex-member's credit card. Now imagine the charges aren't going onto your card, but instead coming right out of your bank account.
Another reason not to use the debit card for recurring charges: your own memory and math skills. Forget to deduct that automatic bill payment from your checkbook one month, and you could either face fees or embarrassment.
8. Future Travel
Book your travel with a check card, and "they debit it immediately," says Linda Foley, founder of the Identity Theft Resource Center. So if you're buying travel that you won't use for six months or making a reservation for a few weeks from now, you'll be out the money immediately.
Another factor that bothers Foley: Hotels aren't immune to hackers and data breaches, and several name-brand establishments have suffered the problem recently. Do you want your debit card information "to sit in a system for four months, waiting for you to arrive?" she asks. "I would not."
9. Gas Stations and Hotels
At hotels, ask about deposits and holds before you present your card, says Feddis. At the pump, select the pin-number option, she says, which should debit only the amount you've actually spent.
10. Checkouts or ATMs That Look 'Off'
Criminals are getting better with skimmers and planting them in places you'd never suspect -- like ATM machines on bank property, says Foley. Does the machine fit together well or does something look off, different or like it doesn't quite belong?
Courtesy: www.finance.yahoo.com
|
|
|
|
| Rashida Lilani CFP CMFC
Lilani Wealth Management
1624 Santa Clara Drive, Suite 235, Roseville, CA 95661
Phone: (916) 782-7752
Fax: (916) 720-0194
Lilani Wealth Management is a Registered Investment Advisor. Securities offered through Foothill Securities Inc. Lilani Wealth Management and Foothill Securities are not affiliated companies. Member FINRA/SIPC. |
|
|
|
|
|
