A three-year study involving 10,000 millennials (born 1981-2000) reveals an overwhelmingly negative sentiment toward banks:
Source: FastCo
Americans’ wealth hit the highest level ever last year reflecting a surge in the value of stocks and homes. A record-setting rally of +30% in the U.S. stock market drove most of the past year’s gains.
According to a Federal Reserve report released today, the net worth of U.S. households and nonprofit organizations rose 14% last year.
The Fed’s report shows that Americans have made good progress on repairing the damage caused by the housing crash and the recession (Dec 2007 – Jun 2009). Americans have been reducing their debt loads and regaining equity in their homes.
Source: Wall Street Journal
Oklahoma high school students, effective this May, now must demonstrate an understanding in banking, taxes, investing, loans, insurance, identity theft and eight other areas to graduate.
The intent of personal financial literacy education is to inform students how individual choices directly influence occupational goals and future earnings potential. Successful money management is a disciplined behavior and much easier when learned earlier in life.
Real world topics covered by the Oklahoma standards include the following:
Most Americans need to save more to assure a financially secure retirement.
But many people struggle with key retirement questions like “how much do I need to save?”
You should save 22 times the annual income you want to have in retirement.
For example, if you want $100,000 in annual income (not including Social Security), then you need to have $2.2 million in total retirement savings.
(22 x $100,000 = $2.2 million)
See this recent article in the Wall Street Journal on how researchers arrived at this magic number of 22.
401(k) accounts are an important part of many people’s retirement savings. And the employer match is a critical part of that system. So when big companies like IBM and AOL start monkeying with that match, you should pay attention because other companies may follow suit!
IBM changed its 401(k) system in 2012 to hand out employee matches in one lump sum at the end of the year leading to an uproar. IBM employees are now missing out on compounding throughout the year that they used to get from contributions peppered in throughout the year. In addition, if you leave IBM before December 15th and you’re not retiring, you lose the match entirely.
Experts warned that others would try to follow IBM’s example by watering down their 401(k) programs as well. Sure enough, AOL took things even further!
AOL said starting in 2014, an employee must be active on December 31st to receive the company match. Furthermore, the contribution will a “one time lump sum after the end of the Plan Year.” So you have to stay with the company through the end of year and you don’t even get the match during 2014!
The protest following AOL’s announcement was so intense, AOL chief Tim Armstrong reversed the changes to the 401(k) policy after just one week of bad publicity.
The IRS started accepting tax returns January 31st so it’s a good time to start thinking about your own taxes. Kelly Phillips Erb recently wrote an article that provides an excellent check list of questions to ask your tax preparer when filing your taxes before handing over your w-2’s or 1099’s:
Be sure to check out Erb’s article for the “right” and “wrong” responses to these key questions.
Source: Forbes
Most people recognize Sir Isaac Newton as one of the most influential scientists of all time, but did you know he was a horrible investor?
Newton’s experience with the South Sea Company vividly demonstrates the financial perils of chasing hot markets, getting caught up in investment bubbles, and not maintaining a diversified portfolio.
In the early 18th century the South Sea Company was established and given a monopoly on trade in the South Seas in return for assuming England’s war debt. Investors liked the idea of that monopoly and the company’s stock began to take off.
Newton hear the siren call of the South Sea Company, invested his cash in early 1720 and managed to turn a nice profit. But then the stock kept soaring after he had gotten out. So Newton jumped back into the stock with a lot more money than his original investment.
Newton subsequently lost 20,000 pounds, almost all of his life savings! From this terrible outcome, Newton supposedly decreed, “I can calculate the movement of the stars, but not the madness of men.”
No warning on Earth can save people determined to grow suddenly rich.
— Lord Overstone
Source: Sovereign Man
and perform an average of 58 hours per week on household and childcare duties.
Click to enlarge
This chart of 20 years of market data vividly demonstrates a painful lesson. The average investor* badly trails all classes of investment assets.
The primary culprit for this deficit is ill-fated attempts to time the market and emotionally driven decisions to move in and out of the markets.
Most individuals claim to be long-term investor until their portfolio drops 10% and suddenly there’s panic.
Our primary role as an investment advisor is to help our clients have the discipline to ignore the gyrations of the markets and keep the long view when it comes to their investments.
* Average investor refers to individual investors across the United States
The fifty largest publicly traded companies headquartered in North Carolina fared very well overall in the 2013 stock market. The Tarheel group gained 28.3%, comparable to the 29.6% put up by the S&P 500.
Note the 2013 returns were much larger than the long-term average.
These NC stocks have return 12.3% per year over the last 5 years, far outperforming the S&P 500 which delivered only 4.8% over the same time period (2008-2013).
North Carolina’s 50 largest publicly traded companies, excluding companies that went public during the year. They are in order by annual revenue.
| Company | Headquarters | 2013 close | 2012 close | 2008 close | 1-year return | 5-year return |
| Bank of America Corp. | Charlotte | $15.57 | $11.61 | $14.08 | 34% | 11% |
| Lowe’s Cos. Inc. | Mooresville | $49.55 | $35.52 | $21.52 | 39% | 130% |
| Duke Energy Corp. | Charlotte | $69.01 | $63.80 | $45.03 | 8% | 53% |
| Nucor Corp. | Charlotte | $53.38 | $43.16 | $46.20 | 24% | 16% |
| VF Corp. | Greensboro | $62.34 | $37.74 | $13.69 | 65% | 355% |
| BB&T Corp. | Winston-Salem | $37.32 | $29.11 | $27.46 | 28% | 36% |
| Family Dollar Stores | Matthews | $64.97 | $63.41 | $26.07 | 2% | 149% |
| Sonic Automotive Inc. | Charlotte | $24.48 | $20.89 | $3.98 | 17% | 515% |
| Reynolds American Inc. | Winston Salem | $49.99 | $41.43 | $20.16 | 21% | 148% |
| Pantry Inc. | Cary | $16.78 | $12.13 | $21.45 | 38% | -22% |
| Laboratory Corp. of America | Burlington | $91.37 | $86.62 | $64.41 | 5% | 42% |
| SPX Corp. | Charlotte | $99.61 | $70.15 | $40.55 | 42% | 146% |
| Lorillard Inc. | Greensboro | $50.68 | $38.89 | $18.78 | 30% | 170% |
| Harris Teeter Supermarkets | Matthews | $49.35 | $38.56 | $27.65 | 28% | 78% |
| Hanesbrands Inc. | Winston Salem | $70.27 | $35.82 | $12.75 | 96% | 451% |
| Ingles Markets Inc. | Black Mountain | $27.10 | $17.26 | $17.59 | 57% | 54% |
| Carlisle Cos. Inc. | Charlotte | $79.40 | $58.76 | $20.70 | 35% | 284% |
| Babcock & Wilcox Co. | Charlotte | $34.19 | $26.20 | N.A. | 30% | N.A. |
| Chiquita Brands International | Charlotte | $11.70 | $8.25 | $14.78 | 42% | -21% |
| Alliance One International | Morrisville | $3.05 | $3.64 | $2.94 | -16% | 4% |
| Old Dominion Freight Line | Thomasville | $53.02 | $34.28 | $12.65 | 55% | 319% |
| Martin Marietta Materials | Raleigh | $99.94 | $94.28 | $97.08 | 6% | 3% |
| Snyders-Lance Inc. | Charlotte | $28.66 | $24.12 | $22.94 | 19% | 25% |
| Coca-Cola Bottling Co. | Charlotte | $73.19 | $66.50 | $45.96 | 10% | 59% |
| Cree Inc. | Durham | $56.04 | $52.96 | $13.22 | 6% | 324% |
| Fresh Market Inc. | Greensboro | $62.52 | $33.98 | $15.87 | 84% | 294% |
| Red Hat Inc. | Raleigh | $40.50 | $48.09 | N.A. | -16% | N.A. |
| Piedmont Natural Gas Co. | Charlotte | $33.16 | $31.31 | $31.67 | 6% | 5% |
| RF Micro Devices Inc. | Greensboro | $5.16 | $4.48 | $0.78 | 15% | 562% |
| EnPro Industries Inc. | Charlotte | $57.65 | $40.90 | $21.54 | 41% | 168% |
| First Citizens Bancshares | Raleigh | $222.63 | $163.50 | $152.80 | 36% | 46% |
| Horizon Lines Inc. | Charlotte | $0.84 | $1.50 | $87.25 | -44% | -99% |
| Fairpoint Communications Inc. | Charlotte | $11.31 | $7.95 | N.A. | 42% | N.A. |
| Cato Corp. | Charlotte | $31.80 | $27.43 | $15.10 | 16% | 111% |
| Salix Pharmaceuticals Ltd. | Raleigh | $89.94 | $40.47 | $8.83 | 122% | 919% |
| Pike Corp. | Mount Airy | $10.57 | $9.55 | $12.30 | 11% | -14% |
| Unifi Inc. | Greensboro | $27.24 | $13.01 | $8.46 | 109% | 222% |
| Polypore International Inc. | Charlotte | $38.90 | $46.50 | $7.56 | -16% | 415% |
| Highwoods Properties Inc. | Raleigh | $36.17 | $33.45 | $27.36 | 8% | 32% |
| Xerium Technologies Inc. | Raleigh | $16.49 | $3.05 | $13.20 | 441% | 25% |
| Speedway Motorsports Inc. | Concord | $19.85 | $17.84 | $16.11 | 11% | 23% |
| Krispy Kreme Doughnuts Inc. | Winston-Salem | $19.29 | $9.38 | $1.68 | 106% | 1048% |
| Tanger Factory Outlet Centers Inc. | Greensboro | $32.02 | $34.20 | $18.81 | -6% | 70% |
| Insteel Industries Inc. | Mount Airy | $22.73 | $12.48 | $11.29 | 82% | 101% |
| Culp Inc. | High Point | $20.45 | $15.01 | $1.98 | 36% | 933% |
| Powersecure International Inc. | Wake Forest | $17.17 | $7.81 | $3.29 | 120% | 422% |
| Hatteras Financial Corp. | Winston-Salem | $16.34 | $24.81 | $26.60 | -34% | -39% |
| Swisher Hygiene Inc. | Charlotte | $0.55 | $1.73 | $0.37 | -68% | 49% |
| Triad Guaranty Inc. | Winston-Salem | $0.27 | $0.07 | $0.38 | 286% | -29% |
| Cornerstone Therapeutics Inc. | Cary | $9.49 | $4.73 | $2.65 | 101% | 258% |
| NC 50 OVERALL | 28.3% | 12.3% | ||||
| S&P 500 | 29.6% | 4.8% | ||||
| annualized |
source: Charlotte Observer
