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If we all had a crystal ball, it is certain that life would be so much easier. The reality is that we simply don’t, and as far as the financial future of the country, while we cannot know for certain, there are a few educated predictions out there that give us some idea of what kind of financial environment will take shape in 2018. Huffington Post gathered a few experts in the financial field together and they gave a list of their predictions, the full rundown can be viewed here.
When it comes to interest rates, many predictions have been off the last few years with experts guessing in both 2015 and 2016 that the Federal Reserve would yield decent rate hikes that ended up being only 0.25% each year. In 2017 the Federal Reserve hiked the interest rates 0.25% three separate times in that year alone, they now range from 1.25%-1.5%, and it is expected that 2018 will be incredibly similar.
Everyone is hoping and wishing for economic growth, but the current predictions for US economic growth for 2018 are lagging at around 2.5%, the International Money Fund made the prediction and noted it fell below their prediction for worldwide growth which was 3.7%. President Trump is expecting between 3%-4%, which doesn’t look promising.
Inflation is always a hot topic, and for 2018 it is expected to have some slight growth to reach 2.1%. The Federal Reserve has a target value of 2% and it looks like it should be pretty close. The majority of the increase should likely be due to the rising cost of medical costs as well as housing.
Oil and gas prices are always changing, and prices at the pumps have a big impact on the lives of consumers. For 2018, the United States Energy Information Administration believes that the prices should be fairly stable, with the chance of a slight rise. They forecast that crude oil should hover around $51 a barrel which would keep the national average price of gas at roughly $2.45. This, of course, could change if there is any sort of natural disaster or international conflict.
For the average consumer, this can affect them, but not to the point that anyone should react. Everyone should consider keeping a diversified portfolio which can help offer some sort of protection against the uncertainty in the market. Household budgets can help keep spending under control, and if it is possible, a savings is a great safety net for emergencies.
The United States stock market continues to see Facebook as a good investment. Social media has become central to many American lives. People love to get on outlets and communicate with others across the nation. Such is the case with Facebook. The granddaddy of social media outlets, Facebook has been an investor favorite since the company’s IPO several years ago. When the company became part of the American stock market, investors loved it. Today, this is as true as it ever was. People continue to value Facebook. While a new report suggests that people may be spending slightly less time on the site, investors remain confident in the company’s overall soundness. They are confident that Facebook is a great investment that will continue to provide value for shareholders.
Just as the world of the net has continued to evolve, the same is true of Facebook. Company officials like owner and founder Mark Zuckerburg are well aware of how to create new ways to interact on this media. They know that users want to have fun with friends and family on Facebook. They also know that advertisers want to figure out ways to reach out to who use the platform. This is one of many reasons why officials have looked for ways to help please both groups.
Many Positive Changes
Investors are also happily greeting many good pieces of news that accompanied Facebook’s quarterly report. It’s clear to them that the company is in very good health fiscally. It’s also clear that the company can continue to maintain high levels of growth in the future. The report indicates that the grew about fourteen percent last year. It also notes that revenues are nearly thirteen billion. The company made over six dollars for every single person who uses it. Those who use the company to place adds are also willing to pay more for the right to do so. All of this adds up to a very rosy picture that is expected to continue to bring in new investors. As a result, the company’s existing investors are confident that the company can continue to provide the kind of value that investors need in order to meet their own personal savings goals.
If you have been paying attention, it should come as no surprise that most American’s are living on the financial edge. For many American households it takes a minimum of two incomes to keep them just afloat, with no money left to set aside and save for a rainy day.
One American man, 54 year old James DeVolid, was splitting his time working two jobs, one for Walmart and one for Tyson Foods. After twenty years working for Tyson foods in the janitorial department, he was forced to quit the position recently when he developed nerve damage due to his job requirements including cleaning freezers. The freezing temperatures only made his damage much worse. DeVolid was able to retain his position at Walmart but the position he holds in the cart corral is only 32 hours a week at a pauldry $10 per hour. The loss of his Tyson position literally cut his annual income in half, from $40,000 to $20,000. He also lost his much needed healthcare because it was supplied through his position at Tyson. He assumed that in a few weeks he would be able to gain health benefits from Walmart. Shortly before he was able to do so, he suffered not one, but two heart attacks that required triple bypass surgery followed by a second surgery to drain fluid that had collected around his heart. It required him to be off work for six weeks to recover, and DeVolid only received half his wages in that time. The family drained their $5,000 savings rapidly and then were hit with $8,000 in debt plus medical bills. DeVolid, in his position, is similar to many Americans who find themselves in this type of situation. He has no idea how, of it ever, he’ll be able to recover from this debt.
The worst part of this story is it is nothing unusual in the United States. A recent study showed that only 39% would be able to cover any unexpected expense of $1,000 with money they had in savings. The most popular response was that most would have no choice except to incur debt weather it was loans or by credit card. In a 2016 study, medical expenses were listed as the biggest contributor to the rising amount of people living in poverty. The problem may be worse than this recent study led people to believe. Just last year another study showed that 44% of adults couldn’t afford a surprise expense of just $400.
It is sad to know that so many in a country of so much are suffering such financial downfalls, but there doesn’t seem to be an answer. For a family earning just $2,500 per month, their bills likely run near $2,300 per month leaving nothing to set aside and save. It is incredibly discouraging to see that there seems to be no solutions. For the full story on DeVolid, head to the Huffington Post.
On Friday, the Bureau of Labor Statistics released the latest job statistics for the American economy. The report demonstrated higher figures than those previously predicted by economists. The stock market fell slightly on Friday as many investors interpreted the new numbers to mean that increased inflation is on the horizon.
According to the report, 200,000 new jobs were added to the US economy in January 2018, significantly more than the 180,000 jobs that analysts had predicted would be added. The Department of Labor also reported that average hourly wages for American workers rose 0.3% in January, in contrast with January 2017 when wages experienced no change at all.
In January, the unemployment rate remained unchanged from December’s unemployment rate of 4.1%. However, the U6 unemployment rate, a number includes discouraged workers and workers who have opted for part-time positions because they can’t find full-time jobs, rose in January to 8.2%.
Growth in various sectors held steady for January. The all-important construction and manufacturing sectors continued to add jobs in the first month of 2018. In January, 36,000 new construction jobs were added to the market, while manufacturers hired 15,000 new employees. The restaurant industry added 31,000 jobs, and the health care sector also added 21,000 new positions.
Despite the strong monthly growth, the Bureau of Labor Statistics also released revised unemployment numbers for 2017. The new statistics show that the American economy added 2.17 million jobs in 2017, a drop from the 2.24 million jobs added to the economy in 2016. This revised number marks the lowest annual job growth since 2012.
In response to the new numbers, the S&P, the Nasdaq and the Dow Jones all saw a quick drop on Friday. Industry analysts speculated that the drop stemmed from investor fears that the Federal Reserve might decide to raise interest rates in response to strong wage growth. If wages continue to grow in February, the new Federal Reserve chair Jerome Powell may opt to increase interest rates in March to combat inflation.
The stock market has not strung together two losing days in a row in a while. Not just two losing days, but two triple digit losing days at that. The worst of the days happens to be how things are shaping up in the markets today. The Dow Jones Industrial Average has fallen by as much as four-hundred points throughout the day. This is the kind of move that we have not seen since June of 2016 says CNBC.
Naturally, alarm bells have been going off for some people who are afraid that perhaps this market got a little too far out over its skis. It is definitely something that is a possibility as price to earnings (PE) ratios have climbed to levels that are much too high for normal markets. While a typical PE ratio for the whole market might be in the high teens, lately it has climbed to over thirty.
When the market gets overinflated like this, and prices are just climbing through the roof, it is easy for people to want to put their own money in the market as well. There is the classic fear of missing out (FOMO) feeling that can overcome some people. As soon as those characters start to put their money in the market, you know that the rally has almost come to an end. They are always the ones who are left holding the bag while everyone else who has already made their money carries on their way.
It is far too early to say that we are definitely in some kind of decline at this point. There are other possibilities that could come into play here. Already, some are getting defensive about this move and say that it makes for a great opportunity to purchase more. It sort of depends on where you think the market is headed in the long-term.
A lot of people have already made their money, and they might go ahead and make a quiet exit from the market. When they start to pull their funds, declines like this become all the more possible. Make sure that you have some guts of steel if you are ready to dive in head first into a market that has fallen as much as it has at this point.
Social media platforms can be a very profitable investment in the short term, but will changes in the way the site operates hurt returns for investors? In the ever changing world of the Internet, particularly social media platforms, investors should pay attention to how changes in the platform can effect their wallets.
One very recent example is the new changes that were rolled out by Facebook. These changes will cause users to see more content from their friends on the site, but less content from media outlets and businesses in their feed. The reasoning behind the renovation was that studies showed people feel happier when seeing content from family and friends than when exposed to other types of content.
Facebook’s stand of prioritizing users over profits has made Facebook investors nervous. According to an article by Fortune, the stock for Facebook has dropped by 4.5% in light of the new changes to the site’s algorithms. Other social media platforms have also disappointed investors. One example is Snap, which is struggling at the moment as users are flocking away from it in favor of other platforms to share pictures and videos with friends.
As social media platforms continue to change their algorithms to enhance user experiences, investors need to be aware how these changes may affect their returns. In the case of Facebook, the changes have not gone over well with all users. According to Business Insider, Facebook reported a 5% drop in daily usage of the platform. This drop occurring at the same time as the release of the new algorithms may be coincidental, but the combination of these two factors may have advertisers starting to look to spend their money elsewhere. That prospect does not bode well for the company’s stockholders.
While investors can reap big rewards from social media platform holdings, the rapidly evolving nature of the Internet and technology can make this investment very risky in the long run. For those who have stocks in websites such as Facebook and Twitter, keeping your portfolio balanced with minimal risk investments will keep your money safe should the changes in a platform suddenly cause it to go bust.
For all of those who remember the days before Instagram, Snapchat, or Facebook. Do you remember when Kodak was always affiliated with everything “picturesque?” After all of these years, they have made progress towards a new type of system called cryptocurrency. Kodak has backed a company called “Kodakcoin, “which is a new type of digital currency. Not only did they look to benefit themselves as a company, but they aimed at protecting the rights of photographers within image rights management. This allows the use of the blockchain in order to manage their own collections without any worry of violation of copyrights when it comes to their material. It basically allows the party to protect their work and put a claim to it without worrying about legal or monetary issues down the line, plus they could be paid accordingly. What is interesting about the blockchain concept is the fact that it can be used as a platform for a variety of ways. For example, photographers would upload their images with a certified license to each photograph. Clients can pay in Kodakcoins instead of using cash, which does seem great for the spender. It is intriguing to see companies that were “nowhere to be found” at one point, to a current elevated status as far as seeing a rise in their stock based on attaching the “blockchain” name to their corporation. According to a New York Times article,Your text to link… , it is noted that the “old timers,” referring to the older companies are making a big comeback by attaching their names to the blockchain movement such as, Long Island Ice Tea Corporation, Now called Long Blockchain Corp., made a dramatic rise in their value. Now going back to the point of Kodakcoins, which raised questions of the motive behind Kodakcoins over cash? Indeed, it does create anticipation to see what the motive is behind that particular move, but the answers were vague, which still creates that air of mystery. Not trying to question the moral standards of their company, but rather what long-term goal they have in mind in order for them to profit and gain success in the legacy of the Kodak brand?