President Obama’s presidency has been hallmarked by stagnant job growth and lackluster economic performance. Even as his approval rating climbed to a respectable percentage right before he left office, his final job report showed that his administration only added 156,000 jobs in the last month of his presidency. His advocates say that this report proves that he provided the results that the country needed to regain confidence in the American economy. However, critics state that the small growth shows signs of confidence thanks to Trump’s election.
The Final Job Report of Obama’s Presidency
Along with creating 156,000 jobs, the economy last month saw wage growth of around nine percent. This small increase means that people are making more money; however, many of those people are still working on a part-time or temporary basis. Even more, the job growth is much lower than what was predicted by economists who thought the final month of Obama’s presidency would see a creation of around 175,000 jobs.
The unemployment rate likewise rose just slightly from 4.6 percent to 4.7 percent. That rate, however, does not take into account the number of people who dropped out of the job market because of dismal economic performance and a lack of jobs in their specialties. The slight uptick of the unemployment rate can also be linked to the number of Baby Boomers who retired or stopped working.
The exit of Baby Boomers from the job market may also account for why wages are up just slightly as opposed to previous months. Employers are willing to invest more money in younger recruits because they speculate that they will get a return on that investment with labor and skills provided to the company.
The increase in wages also indicates that companies are willing to spend more money on employees because of the new administration. Trump’s pro-growth and pro-business policies are expected to create a hiring boom and a need for more workers to flood the American economy.
The Promise of Trump’s Pro-Business Agenda
Since he launched his presidential campaign in summer 2015, Donald Trump made it clear that he would advocate for businesses of all sizes and push for American companies to return overseas jobs back to U.S. soil. He proposes to accomplish this goal by taxing American companies 30 percent at the border when they import their goods back into the country. He also proposes incentives for companies that decide to expand or rebuild businesses and factories in America rather than shipping factories and manufacturing overseas. So far his agenda has paid off with companies like Ford, Fiat, Sprint, and others promising to stay in the country and invest more money in job creation, building new factories, and bettering existing manufacturing plants.
Some economists say that Trump’s ability to create jobs even before he takes office proves that he has what it takes to vastly improve the economy to levels it has not seen since the Reagan era. Many American businesses are taking this as a sign of promise and, as such, have demonstrated more positivism on their part in the decisions they are making right now about their futures. Economists say that Americans should embrace this agenda for the simple fact that the entire country will benefit from it.
Even so, Obama and his followers say that the uptick in the number of jobs and amount of wages being paid should be credited to his White House instead of Trump’s pro-business agenda. They argue that Trump’s economic plans will end up hurting the U.S. and taking jobs away from America’s international partners like Mexico. However, Obama’s worries are not echoed by businesses that now see the American market as more lucrative than ever.
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Some have argued that America’s greatest innovation in the past few decades is the principle of “net neutrality.” Net neutrality simply refers to the policy whereby Internet service providers must enable equal access to all information and content without preferential treatment. This principle has allowed America’s tech industry to blossom in recent years in terms of employment and innovation. Thanks in large part to net neutrality, now the American tech industry has about 6.7 million workers. A few tech experts are concerned, however, about the future of net neutrality under a Donald Trump administration.
Jeff Eisenach and Mark Jamison: A Cause For Concern?
Tech experts first started to worry about the future of net neutrality after President Donald Trump announced his intention to appoint Jeff Eisenach and Mark Jamison into the highest positions at the Federal Communications Commission (FCC). Given both Eisenach and Jamison’s track record in the tech world, many believe Trump’s picks were intended to signal an end to net neutrality as we know it. Eisenach used to work for Verizon, and Jamison used to work for Sprint. Members of the tech industry fear Jamison and Eisenach will work to pervert net neutrality in favor of more established telecoms like Verizon, AT&T, and Sprint.
Since more traffic will head to telecom companies with this dismantling of net neutrality, political parties fear certain groups will have more of an advantage getting their advertising out to Internet users on these sites. Financial interests will become even more important in a world without net neutrality, and that means only a select group of opinions and options will be available to World Wide Web users. While critics admit getting rid of net neutrality may provide a short-term boost for the telecom and cable companies, overall they feel it would be disastrous for the U.S. economy. Critics argue that the main reason telecoms are pursuing an end to the era of net neutrality is for their own bottom line. In critics’ opinion, telecoms just want to increase their cash flow at the expense of consumers.
How Could Trump Weaken the FCC?
How far Trump’s team can go in dismantling net neutrality is still up in the air. In 2015, the FCC did officially pass laws on net neutrality. These laws were made so that all cable and telecom providers would let information flow without prioritization. Telecoms were also forbidden to take money in order to prop up one source of information under these laws. Comcast must remain net neutral until 2018 due to its acquisition of NBC Universal, and Charter Communications must honor net neutrality at least until 2023 because of its acquisition of Time-Warner Cable.
Although these laws are on the books, tech experts fear President Trump will do everything in his power to get rid of net neutrality in order to please the telecom and cable companies’ interests. In an essay published in October of 2016, Jamison severely critiqued the very existence of the FCC. Jamison wrote:
“Most of the original motivators for having an FCC have gone away.”
No one believes the Trump administration will do away with the FCC entirely, but it’s no secret that Trump’s team wants to lessen its overall influence. Kevin Werbach, a pro-net neutrality member of President Obama’s transition team, recently told reporters:
“The right has for a long time had an agenda that suggests that the role of the FCC should be significantly curtailed…I think it’s quite likely that will be the agenda of this new administration.”
What Should We Look For First?
Pundits believe Trump’s FCC team will first try to weaken net neutrality by encouraging the practice of “zero rating.” All of the powerful telecom companies currently use zero rating all the time on their Internet platforms. Critics believe zero rating allows powerful telecom companies to arbitrarily pick winners and losers. The FCC has not enforced tough laws on T-Mobile, AT&T, or Verizon yet. However, all three of these companies use zero rating on their Internet platforms. For those concerned about net neutrality in the future, it’s crucial to focus on how Trump’s team deals with zero rating.
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Trump’s election upended doomsday stock market predictions that also said that Hillary Clinton was the market’s only hope. While in the first few hours after his win the market did in fact plunge, it quickly recovered and rose to heights never before seen. However, even Trump himself admits that this growth could be worrisome and a sign that a proverbial bubble is about to burst. Some debt strategists agree with him and go on to say that America’s time of stock market growth is about to expire.
The Challenge of Figuring Out the Trump Stock Market Effect
No one knows for sure why the stock market remained vigorous and promising after Trump win. After all, most economists predicted that his win would bring on a new recession that would be more severe and damaging than the one that highlighted the first years of Obama’s first term in office. However, Trump’s win did just the opposite and instead caused the market to rise close to 20,000, the first time in history it has ever flirted with that number. Likewise, December job reports show signs of the economy recovering even before he takes office.
Still, debt strategists like Matt King from Citigroup struggle to make heads or tail out of this phenomenon because by all accounts the market should have plunged with the uncertainty of a new administration. Even more, the fact that stocks remained high could mean that something other than Trump’s pro-business stance is propping up investments like bonds. Whatever is propping it up now could soon start to crumble and cause the market to plunge as it was initially expected. As of yet, however, that scenario has failed to play out.
King attributes central bank spending as the primary culprit for why the market never ruffled after Trump’s win or even after the Brexit vote. However, he also says that this culprit cannot hold off the inevitable. He insists that the bond market is in fact deteriorating and that time is almost up before the bottom falls out and investors lose money.
The Post-Election Trump Bubble
Does this mean, however, that the stock market is truly in a bubble, one that is about to burst and set off a stock market Armageddon? Trump says yes. He insists that the U.S. is in a “big, fat, ugly bubble” that is caused by the increase of interest rates. In fact, he says that he sold all of his stocks in June 2016, well before his win in November.
Trump went on to say in a pre-election rally that the increased interest rates have driven up the equity market, creating the bubble that he is so sure of existing now. However, some economists are not so sure that Trump is on the right track with this theory. They insist that while the increased rates have in fact improved the market, the market also has the money to back up stocks. The current conditions do in fact support stock valuations, meaning that there is no bubble to worry about or a time clock to watch.
Just to be on the safe side, however, investors are being advised to approach stocks in utilities, consumer staples, and healthcare cautiously. Instead, they are encouraged to invest in banks, technology, energy, and cyclical stocks.
Months before Trump won the election, economists warned that his win would bring on a recession that would be unmatched by the recession of the early 2000s. However, his win did just the opposite and instead drove up the stock market to new heights. Not everyone, including Trump, is happy with this growth. Critics say that the growth is a sure sign of an increased interest rate bubble that is soon about to burst. Debt strategists see no possible positive outcomes.
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People in the United States only have about a 0.84 percent chance of getting audited by the Internal Revenue Service (IRS), the tax accounting agency. Yet, there are some things that a senior can do that will raise the likelihood of being audited. Some of these items are unavoidable, but seniors should make sure to check with a tax attorney or accountant before filing their taxes to make sure that they have minimized the chances of being audited while paying the least amount of tax possible.
What Can Retirees Do to Raise the Risk of IRS Audit?
Seniors who report an income over $200,000 have a one out of 38 chance of being audited. If the income climbs over $1 million, then the senior has a one out of 13 percent chance of being audited. While seniors will not want to make less money, they need to double check their returns before filing as the chance of being audited increases greatly.
Make sure to report all your income. Common forms that seniors often overlook include 401(k)s and IRAs and Social Security benefits. The senior should double check their tax form before filing their taxes. Mismatched figures greatly increases the chances of being audited. Make sure that all forms actually belong to you or inform the IRS if you find errors.
If the senior takes higher than average deductions, then the likelihood of being audited increases. While it is important to take every deduction possible to lower the tax bill, make sure to maintain proper documentation. Many seniors find that when they deduct a large medical bill, they get audited for the first time in their lives.
Seniors who go to the casino or bet on the horses need to be careful when reporting their income. All gambling winnings need to be reported. Losses can only be used to offset the amount that the person reports in winning.
Some people try to write off the money that they spend on a hobby. In order for the IRS to accept this argument, the hobby must be run in a business manner. The senior must also must have a reasonable expectation of making a profit.
One of the most serious things that a senior can do to get the IRS looking closely at them is to not report a foreign bank account. If you are traveling or living overseas, then make sure to stay abreast of the law.
What are Some Other IRS Red Flags?
The IRS knows about how much the average senior deducts based on their adjusted gross income. For example, those who make over $1 million dollars deduct an average of $441,000. If a senior makes between $100,000 and $200,000, the number drops to $29,000. If the senior donates more than the average amount, make sure to keep itemized receipts on all donations.
If a person is older than 70 ½, then they must take distributions from their 401(k)s and retirement funds. If a senior fails to do so, then they can not only expect an audit from the IRS to find out why, and they can expect to lose about 50 percent of the money to the government.
A senior who owns rental income should be very careful if they are claiming a rental loss. Understand that there are two separate rules. Seniors who spend more than 750 hours managing properties, then there are more favorable rules. Therefore, older adults should make sure to keep a record of the hours that they spend.
Retirees who have a higher income should definitely consult a tax attorney or accountant to make sure their taxes are done correctly. This especially applies if something in the senior’s tax return might send up a red flag.
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The world’s largest online retailer Amazon has announced that they had a record-breaking Christmas season. The company says that they delivered more than 1 billion items worldwide. The company used more than 200,000 workers and 45,000 robots to fulfill the orders. The biggest shopping day was the Monday after Thanksgiving when customers ordered more than 28 million items that Amazon filled through their fulfillment service. This service allows third-party sellers to let Amazon pack and ship their items.
What Were the Biggest Changes at Amazon this Christmas?
One of the biggest changes for Amazon sales this Christmas was the Echo. This listening device allows users to use technology device, Alexa, to order things through Amazon without ever having to touch a button.
The company’s sales of Amazon Fire Stick that allow users to control their televisions with their voices. The Fire Tablet was also a popular item that many found under their Christmas tree this year.
The company’s fulfillment service was a huge success. More than 2 million companies use this service to pack and ship orders for their customers. This allows Amazon to get the money from these companies without having to tie up the company’s money in inventory. These orders raised by more than 70 percent during 2016. The company’s press release says that sellers in 130 different countries used the fulfillment service delivering presents to people in more than 185 countries.
Clicks on product advertisements paid for by third-party sellers grew by 150 percent. These advertisements found on Amazon’s website still keep the merchandiser’s name in the forefront. The number of sellers using these ads worldwide grew by more than 100 percent. One of the possible reasons that more companies choose to use this service is that they can now deduct the cost of the ad from their Amazon sales.
Amazon Business allowed businesses to easily shop for supplies that they need to continue their individual businesses. Over 400,000 businesses have brought over $1 billion in supplies throughout 2016 with many of the sales coming during the busy holiday season.
What Does the Future Hold for Amazon Sales?
Jeff Bezos, Amazon’s CEO, has said:
“If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table.”
He is using this philosophy to drive the company forward. In early December, Amazon made their first delivery by drone to a customer located about two miles away from where the order was filled.
The company also has plans to have its own fleet of planes built. This fleet would allow the company to send small boxes at a much cheaper price. It would also allow them to eliminate the bottleneck that often occurs with major delivery services during the holiday season.
All the added purchases, however, had a downside as the company said that its shipping costs grew by more than 43 percent. Amazon is quickly developing an app that would allow truck drivers to locate an Amazon load to carry when their trucks are empty. The company currently pays middlemen for this service adding about 15 percent to the total costs. Jeff Bezos, CEO of Amazon, has purchased a large share of Convoy. While working to connect drivers and loads, this service hopes to build self-driving trucks in the near future.
Amazon had a record breaking Christmas season delivering more than 1 billion packages worldwide. They experienced phenomenal growth in sales of Echoes, Fire Tablets, and Fire Sticks. One of the largest segments of growth was their fulfillment services. Amazon Business also saw vast growth throughout the year. While Amazon may someday use drones to deliver products, the immediate future has the company looking at self-driving trucks.
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Warren Buffet reclaimed his position as the second wealthiest person in the world by earning $12 billion dollars during 2016. He is the largest shareholder and chairman of the investment firm of Berkshire Hathaway. Warren Buffet has always recommended that investors look at investing as a business so that they do not let their emotions impact their decisions. He also recommends that people use market fluctuations to their advantage. Warren urges everyone to seek a margin of safety.
How did Warren Buffett Produce $12 Billion in 2016?
Warren Buffett was a staunch supporter of Democratic candidate Hillary Clinton. Yet, it was Republican President-elect Donald Trump’s victory that propelled the stock market up. While the stock market never managed to cross the 1,200 point level, it bounced off of it several times. This made Warren Buffett a lot of money as almost any stock owned by investors suddenly became worth more money.
Warren Buffett has long been an advocate of buying financial stocks. About 35 percent of his portfolio is in financial stocks. He owns stock in consumer and commercial financial services company Wells Fargo. Buffett’s portfolio also includes stock in American Express that specializes in issuing credit cards to people worldwide. He also owns stock in the Bank of America which is one of the largest financial institutes in the United States.
Bank stocks have done particularly well since Trump’s election rising almost 17 percent by the end of the year. When the Federal Reserve, the central bank in the United States, rose interest rates in early December, bank stock went up because banks can make more money. Banking regulations are likely to loosen under a Trump presidency allowing lenders to make more money. Therefore, their stock became more valuable. The top Standard & Port’s 500 financial stocks earned about 22 percent in 2016.
Buffett’s investments also now include airline stocks which he had long shunned. In 2016, he purchased shares in Fort Worth, Texas-based American Airlines, shares in Atlanta-based Delta Airlines, and shares in Chicago-based United Continental Holdings. He also owns shares in NetJets that sells partial ownership in private jets. Buffett holds shares in Precision Castparts that makes parts for planes. This signals that Buffett believes that economic growth will outpace airline capacity. Like bank stocks, these stocks have done very well after the election while remaining very flat through much of the year.
How Much will Warren Buffett be Worth in 2017?
The stock market always has the possibility of going up or down. Therefore, Warren Buffett may make or lose money during the year. Chances are that he will make more money than the average investor because he is considered a financial genius. Berkshire Hathaway has grown an average of 19 percent over the last five decades.
Experts at Motley Fool have spent years studying Warren Buffett’s investment style. They say that investors may want to consider two stocks in particular.
Buffett owns stock in United States bank holdings company M&T Bank Corporation. This corporation’s stocks have climbed about five times the index since Trump’s election. Their merger with bank holding company Hudson City Bancorp is finally completed. The United States government may repeal most of the banking regulation Dodd-Frank legislation in 2017.
Buffett also owns stock in cloud-computing and computer company International Business Machines (IBM). Motley Fool’s experts write,” estimates that the cloud services market was worth $208 billion in 2016, there’s still plenty of market share for IBM to capture.”
Many experts believe that there is plenty of room for growth in the company’s cloud computing division during 2017. This company has paid out 21 dividends in a row.
While Warren Buffett supported Clinton’s election, he has benefited from the election of Donald Trump. His recent purchases in more financial stocks seem to indicate he thinks that the money segment will remain strong in 2017. He has also made purchases in the transportation segment which may mean that he thinks that economic growth will out distance this industry’s ability to currently meet it. While it is always possible that Buffett will lose money in 2017, he will remain one of the wealthiest individuals in the world after making $12 billion in 2016.
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James Cramer is the host of American television CNBC’s Mad Money. He is the co-founder of TheStreet Inc. offering financial news and analysis. James recently recommended that people diversify their portfolio regardless of their age when preparing for retirement. He recommends that most people start with investing in a 401(K) because employers often match part of the funds put into the account. Cramer recommends never putting more than 20 percent in the company where they work.
How Cramer Suggests Investors Apply Diversification
Cramer warns that investors should be careful because employers often invest this money back into their own companies. He says that investors open themselves up to a lot of risks when the 401(k) when all retirement funds are put into a 401(k).
Cramer recommends that everyone have five things in their portfolio:
1. Stocks from a healthy geography
2. Speculative stocks
3. Growth Stocks
4. Dividend-paying stocks with a high yield
He recommends not having any more than 20 percent of the portfolio in any one area.
Cramer defines stocks from a healthy geography saying:
“What you really need is a stock that is in a safe geography. At times, when the United States is growing more slowly than the rest of the world, you need something international — and not just something that does a lot of business overseas.”
He adds that if choosing a foreign stock, the stock should actually have a home headquarters in a foreign country. Investing in both foreign and United States stocks helps to protect the investor’s portfolio from turmoil.
Cramer recommends that investors choose a speculative stock by finding a small company in a growing industry that is trading in the single digits. Buy it and wait for it to grow. He warns that it is important to not hold these stocks too long.
Cramer says that when picking growth stocks that investors first find a sector that is growing quickly. Then, they should isolate a major company in that industry and buy it when its cheap.
James recommends that when an investor is looking for a dividend-paying stock with a high yield that the first look at the company’s income sheet giving it about 40 percent of the weight when choosing a stock. He says that the investor should then give about 30 percent of the weight to choosing a stock with a good balance sheet. Finally, he recommends choosing a stock that has a history of paying dividends.
What are Cramer’s Top Dividend Paying Stocks with a High Yield
James Cramer regularly produces a list of stocks that he thinks are strong growth stocks. He publishes the list on Simply Safe Dividends. He expects these stocks to pay about a 3 percent yield each year while growing about 8 percent.
Lifestyle apparel company VF Corporation has paid a dividend for 43 straight years. Investors probably have at least one of their brands in their closets like Wrangler, Timberland, North Face, Vans, and Nautica. James particularly likes this stock because of its strong management team.
Manufacturer Proctor & Gamble also has a host of brands including Charmin, Luvs, Gillette and Pampers. This company has paid out dividends for more than 59 years. Investors have received a 10 percent dividend on average over the last 20 years. The company has projected that they will pay out over $70 billion to shareholders in the next three years.
Pharmaceutical company Novartis also makes Cramer’s list because it has diversified business segments in patented drugs, generic drugs, and eye care products. Its compounded annual rate is 12.6 percent over the last two decades.
James Cramer says it is important that investors look beyond their 401(k)s and choose the diversification method because too often that involves putting all the eggs in one basket. He recommends that buyers choose between 10 and 15 stocks. These stocks should include those from diversified healthy economies. Furthermore, they should include some speculative stocks, growth stocks, and dividend-paying stocks. He suggests that each investor should have some gold in their portfolio. So don’t forget about the importance of diversification next time you plan your 401(k).
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Being hired for a dream job first requires getting past the interview. But how can one ace the interview when the nature of the questions is uncertain? It’s simple, interviewers are increasingly asking open-ended questions so that they can gauge the interviewee’s readiness and interest in the job for which they are applying. By coming up with answers to inquiries like “How did you prepare for this job interview?” in advance, an applicant can succeed in winning over the interviewers and make the best impression. A thoughtful and sincere response to this query can go a long way in securing the dream job.
The Open-Ended Question that Could Lead to Guaranteed Success
Interviewers only have a few minutes to determine if the person in front of them is the right candidate for the position. They must vet every interviewee against potentially a dozen other applicants, all of whom bring their own unique set of skills to the company. How can one demonstrate they possess the qualities an employer is looking for? The key to winning over an interviewer depends on the answer given to a question that more and more companies are asking. The query itself is rather open-ended but a good indicator of the level of talent and interest shown by the applicant. Hiring managers are increasingly inquiring
“What did you do to prepare for this interview?”
and then sitting back while the interviewee figures out the best strategies for winning them over.
When wanting to impress the person conducting the interview, one must come back with a prompt and prepared answer that will knock the question out of the proverbial ballpark. A simple, and common answer like “I took a shower and drove to the business” will not do. A sure way to impress is by showing interest in the company and the services and products it provides. Thus, the best answer would contain previously researched details of the company and an explanation on why its services are aligned with the interviewee’s talents. A basic knowledge of the business’ social media accounts and top management are always a plus.
Other Job Interview Strategies to Use
No matter how engaging the discussion is, hiring managers are trained to observe other, more subtle details. Some may be matters of common sense but failing to rise to the standards when it comes to the little things, may ultimately help interviewers choose one applicant over another.
Punctuality is crucial. Nothing irks an interviewer more than a job applicant showing up late to an interview. The best strategy is to show up five or ten minutes early, just to be on the safe side.
Whoever said appearance doesn’t matter has never held a job interview. The cliché of “dress for success” may be overused, but it is still very much relevant to landing the perfect job. Clean, freshly pressed clothing will always be appreciated over a raggedy look.
Finally, interviewees must know the company and the role they may be expected to fulfill if hired. Hiring managers will appreciate applicants that know details like the company’s stock market performance, its location throughout the country or the world, and even the names of the leadership team.
Job interviews do not have to be nerve-wracking ordeals. The most important tips interviewees need to remember are: showing up on time, wearing clean clothes, and knowing what foremost important question may be levied at them. The answer can be key to winning over an interviewer who is on the fence about choosing one applicant or the other. Having an answer that is well-researched and prepared shows readiness to join the team.
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