Vermont and the Plight of Rural America

"I lived with the decent folks in the hills of old Vermont…” — "Yankee Lady" as performed by Jesse Winchester

Its beauty is unparalleled. To drive across a one-lane covered bridge and gaze down at the Ottauquechee River, rippling white over rounded stones, surrounded by verdant Vermont hillsides, is to behold astounding scenery. 

Strolling main streets in idyllic communities like Quechee and Woodstock, where many churches and other architectural landmarks date from the 1700's, connects one with our proud heritage. Calvin Coolidge was so enamored with his boyhood home of Plymouth Notch that he took the oath of office as our 30th President there.

While my recent Vermont visit was purely recreational, a few local economic trends were difficult to miss…

Investment Menus, Fiduciary Oversight and Bruce Hornsby

"That's just the way it is... Some things will never change." — “The Way It Is” as performed by Bruce Hornsby and The Range

Few of us are shocked that money influences public policy. That private companies are exerting significant pressure on legislation regarding retirement savings, however, is troubling.

Some background. Congress is initiating legislation that encourages Americans to save more for retirement through participation in their work-sponsored 401(k). The actual term “401(k)” comes from the tax code that laid the groundwork for what has become one of the most popular retirement planning vehicles for many American workers. Plans are established by employers, who maintain fiduciary responsibility to the plan, and employee contributions are tax-deferred until money is withdrawn from the account.

While the information above is innocuous in theory, the fiduciary responsibility is extremely important. Employers are charged with providing a “menu” of investment options. These often include low-fee, stable value and target date mutual funds that generally allow employees to choose their investments from a reasonably diversified set of options. 

Contributing to Commerce and Combating Loneliness

"Hard work is a way of life for me..." — "Southern Star" as performed by Alabama

Seniors are blowing the lid off of traditional thinking regarding work, productivity and age. And I'm hopeful that you and I can carry the same spirit into the future.

Recently I read an article penned by Steve Hartman of CBS News about the working career of Benny Ficeto of Perth Amboy, New Jersey. Benny began shining shoes at age seven. As a young man, he served as a gunner on a B-25 Mitchell bomber in World War II. After the war, he worked as the supervisor of a warehouse for a company that distributed cosmetics.

Benny tried retirement in the 1980s and found that he missed the friendships and interactions associated with employment. So he began a series of odd jobs. Today, he bags groceries in four-hour shifts, two days a week. At age 97…

Family Budgets, the Debt Ceiling and the O'Jays

"For a small piece of paper...it carries a lot of weight." — "For The Love of Money" as performed by The O'Jays

Most of us budget our personal discretionary spending, spreading out major purchases over several months and paychecks. For a really large expenditure, we may even utilize the time-honored process of saving for several months or, heaven forbid, even a year.

Our Federal Government? Not so much. Theirs is a "spend what we want now, and borrow more if we run out of money" approach. The Treasury Department recently announced that if Congress doesn't raise the federal borrowing limit before their August recess, the government will likely not be able to pay its bills come September. This raise-the-debt-ceiling game has become all too familiar in recent years.

Mustangs, Minivans, SUV's and Wilson Pickett

"I bought you a brand new Mustang... 'bout 1965..." — "Mustang Sally" as performed by Wilson Pickett

The Mark Zuckerberg of our generation has died.

Close your eyes for a moment and picture a group of wild horses, manes flowing in the wind, galloping through an open range. Lee Iacocca didn't create this ad; an agency did. But he invented the car that it promoted.

Another famous commercial showed a Mustang turning an unattractive, drab-looking fellow into a dashing man about town. The tag line? "Something has happened to Henry…A Mustang has happened to Henry."

How Often Should We Check Our Investment Accounts

“They say a watched pot won't ever boil. Well I closed my eyes and nothing changed; Just some water getting hotter in the flames.” — “Neighborhood #4 (7 Kettles)” as performed by Arcade Fire

How often should we check our investment accounts? 

This question resonated with me recently when I read an article which suggested that young investors should only look at their 401(k) balance on their first day of plan participation and then again at retirement. That way they wouldn’t fiddle with their investments too much and would be amazed at the growth in their account over their career.

While that’s wildly unrealistic, especially because most people will likely change jobs and roll over retirement funds many times in their career, the concept has merit. 

Still, most of us are going to take a gander at our balance every once in a while. But how often is too often?

One Retirement Size Doesn't Fit All

“And it gets hard…as you get older; farther away, as you get closer.” — “See The Changes” as performed by Crosby, Stills and Nash

Retirement advice is easy to come by. With 10,000 of us boomers turning 65 daily, it's a topic on the minds of a lot of Americans. 

The average retirement age for those currently employed is 66. And the average retirement lasts about 18 years. So the typical American fills nearly two decades with activities of his or her own choosing.

Here are a couple of facts about retirement. Currently, about 15% of the total population is retired. A little more than half of this group retired before age 65. About a third of retirees still carry mortgage debt into retirement, and three-fourths are dissatisfied with what they’ve saved heading into retirement…

Big Tech, Breakups and The Kinks

"Corporations, big business and egos...When it all gets too bad." — The Road" as performed by The Kinks

The calls for regulation of America’s largest technology companies are growing daily. The Big Tech backlash also appears to be one of the few topics that transcends political parties and ideologies.

Some say we need to copy and impose our own version of the European Union’s General Data Protection Regulation (GDPR), which qualifies as the first major data and privacy law of its kind anywhere on the globe. Others say we simply need to break up these giants because they are stifling competition and abusing their power…

Bad Jobs Report is Good News for Markets

"I'm walking on sunshine...and don't it feel good?" — "Walking on Sunshine" as performed by Katrina and the Waves

Once again, bad economic news was cause for celebration on Wall Street.  

Only 75,000 new jobs were created this past month. And the number of new jobs created in the last two months was recently revised downwards. With the economy slowing down slightly and the threat of tariffs weighing down growth, the Federal Reserve quickly announced that it is now open to lowering interest rates again. Markets loved this news.

Most sectors of the economy tend to benefit from lower short-term rates. Debtors with floating rate loans get a little reprieve as their monthly interest payments decline. Folks who bought a big house with an even bigger mortgage can refinance and reduce their monthly payments. Housing, construction and commercial real estate also benefit from lower rates both because of lower borrowing costs and because rental income streams are now more valuable. Big ticket items with relatively short payoff periods like cars, cranes and planes all become a little more affordable to finance…

Smoot-Hawley, Hoover, Ford and Markets

"And she stirs the tea with councilors...While discussing foreign trade..." — "A Well Respected Man" as performed by The Kinks

Global economic momentum is and has been slowing. And many economists fear that current U.S. tariff policies may contribute to weaker economic growth along with price increases passed on to consumers resulting in decreased discretionary spending. That more volatile markets will accompany these international trade disagreements appears almost certain.

In 1930, Senator Reed Smoot of Utah and Representative Willis Hawley of Oregon proposed similar laws placing protectionist policies (tariffs) on imports. Over 20,000 goods were affected. The legislation followed on the heels of the stock market crash.