US Economy Hot, NASDAQ Even Hotter

We witnessed yet another record close, like mergers, spin-offs, takeovers, splits and a wall of money drove the NASDAQ higher — again. Investors scrambled to load up on the hot sectors of telecom and technology in heavy trading. Blue chips eked out a small gain, keeping the three-day rally alive on more economic news that indicates the U.S. economy is white-hot.

US manufacturing looks great in 2018U.S. manufacturing grew at its fastest pace in four months, according to reports out today, while prices paid by factories continued to rise, igniting fears that the Fed will be aggressive on the interest rate front. The National Association of Purchasing Management said its index of economic activity rose to 56.9 in February from 56.3 in January. The February level was slightly above the 56.5 that economists had forecast. Meanwhile, construction spending increased 2.7 percent in January in the U.S., the biggest increase in nearly two years, according to the Commerce Department.

“These reports are a problem, as they provide additional ammunition for the inflation hawks and may prompt the Federal Reserve to raise interest rates” several times this year, Michael Manns, a senior portfolio manager at American Express Financial Advisors, told Bloomberg.

The Dow Jones Industrial Average rose 8.07 points to 10,136.38 while the Nasdaq Composite jumped 86.10 points to 4,782.79. Trading on the NYSE was heavy, as 1.27 billion shares changed hands. Advancing stocks outpaced decliners by about eight to seven. The S&P 500 index rose 12.64 to 1,379.06. Benchmark 30-year Treasury bonds fell 7/32 to yield 6.15 percent. Gold fell $0.10 to $294.00 per ounce.

The dollar fell against most major currencies and finished sharply lower against the yen. Reuters reported that Japanese fund managers are moving money out of the U.S. market back into Japan.

Crude oil prices surged $1.27 to $31.70 per barrel on news of a further decline in oil inventories by the American Petroleum Institute, offsetting reports that Saudi Arabia, Venezuela, and Mexico will propose that the Organization of Petroleum Exporting Countries increase output by 1.2 million barrels per day in April.  Oil services stocks surged, as the Philadelphia Oil Services index (OSX) jumped six percent.

Dealing with Debt while Unemployed

Dealing with debt is hard when the bills keep coming, even though your paycheck doesn’t. Emotionally, allow yourself a few days to adjust to your new jobless status. The economics of unemployment are hard to separate from the emotional fallout, so take some time to realize that it’s not you; it’s the economy.

Losing your job is a temporary setback. The difference between those who survive and those who don’t is that those who quickly take control of their debt will automatically feel like they are in control of a situation that, otherwise, renders you powerless.

Unemployed and in debtStep 1: Filing for unemployment benefits

If you are eligible for unemployment, file immediately. Most states offer online registration, which eliminates a trip to the local office of employment and streamlines your weekly benefit filing routine. It also saves on gas which is one of several places you will need to be cutting back on expenditures to reduce your daily debt.

Step 2: Do the math

Gather up all your current bills and get out a notebook. Separate your bills into piles rent, utilities, credit cards, loan payments, and insurance premiums. Calculate the number of your monthly expenses then break that down into the amount of money you need weekly just to cover your living expenses.

Now, consider your assets how much you have available in savings and checking accounts, as well as Christmas or vacation club accounts. If you haven’t yet tried online banking, this might be an ideal time to set up a free bill pay account with your current bank. It’s an efficient way to track your monthly payments and schedule bills to be paid on time, thus avoiding late payments – which is a common but completely avoidable waste of money. It also saves on money you would otherwise be spending on postage and envelopes and reduces paper waste. Depending on the urgency of your financial situation, you might consider speaking with a financial advisor about the pros and cons of tapping your 401K. The biggest drawback here is that you will pay the penalty for early withdrawals. However, if it makes the difference between losing your home or car, it might make sense in the long run.

Step 3: Tighten your belt

Remember that the easiest place to cut back on your budget is food shopping and household goods. No matter how thrifty you think you are, there are countless ways to slash your weekly grocery spending even more. Clip coupons, switch to store brands, buy in bulk (but make sure you check the unit price on the shelf.

Unpicking the Intricacies of Continued Planning Against Risk

We looked into the importance of aligning business continuity with maintenance in manufacturing companies. It explained that a good business continuity plan should expect the unexpected and avoid the potentially damaging consequences of operational disruption. This point is extremely important, especially in today’s business environment where risks that companies face have become more complex, and their impact can be more profound.

We emphasized that having a robust business continuity plan in place is particularly relevant in situations where plant or asset maintenance is outsourced. We also highlighted the erroneous assumption of companies that by transferring some of the workloads, they are relieved of the risks of that activity not being carried out correctly.

Planning before issues happen is the essence of risk managementThe concept of having a business continuity plan in place that allows you to manage risks beyond your operations is particularly relevant when it comes to managing increasingly complex and large supply chains. It is important that companies acknowledge that being connected to a greater number of supplier plants and facilities across the world can also increase the chances of them facing business disruption.

To avoid this, a wise rule for companies to follow is to work with their full network of suppliers to ensure business resilience is consistently implemented across all operations. Companies that don’t develop relationships with suppliers will often find themselves becoming unstuck by severe supply chain disruption.

For example, a Japanese manufacturer’s largest supplier suffered a devastating fire that resulted in the loss of hundreds of critical machines and tools. Since the supplier furnished 90% of the manufacturer’s cost-efficient brake proportioning valves, the incident halted production across 18 of the company’s automotive plants within hours. The impact of this fire loss could be seen up and down the supply chain, with hundreds of utility and trucking companies majorly disrupted as well. Conclusively, it originated an estimated one-percent per-day loss to the country’s industrial output, with an overall loss estimated at US$195 million and 70,000 units of production.

Following a disaster such as this, the consequences of a supply chain loss can extend to months or even years after the incident took place.

PricewaterhouseCoopers recently carried out a study that compared the overall performance of 600 US Public companies that announced supply chain disruptions from 1998 to 2007 with that of benchmark groups. On average, affected companies’ share price dropped 9% below the benchmark group immediately upon announcement of the disruption. These companies continued to underperform their peers for some time. Over a two year period, their average stock return was almost 9% lower. The majority of companies experienced greater volatility for at least two years, a sign of diminished confidence among stakeholders.

One step that companies can take to protect themselves from supply chain disruption is to audit all their business relationships and build a network of preferred and alternate suppliers with different risk profiles. Having other relationships ensures that companies are never too reliant on a single supplier.

Businesses should also be aware that their risk prevention strategies would be scrutinized by other members of the supply chain ecosystem. Therefore, it is important to map your position in the supply chain hierarchy and proactively communicate your business continuity plan to all relevant parties.

Planning for business resilience is becoming all the more important given the complex business environment in which we live. In today’s world, an effective business continuity plan should allow you to reduce the inherent risks associated not only with outsourcing plant or asset maintenance but also with any other operations that take place beyond the walls of your own company. Such an approach can give a competitive advantage to your business as it ensures the robustness of your supply chain, and can consequently protect your reputation, share price and market share.

Reducing Credit Card Debt to Become Manageable

Anyone who’s ever had a big credit card bill knows how disheartening it can be to pay on it each month and not see the balance disappear. It can feel like the debt is never-ending. There are ways out, though, if two things are recognized:

  • There is a legitimate problem with the level of credit card debt, and
  • There is something that really can be done about it.

If both of these things are understood, it takes the limits off of a person and lets him move toward improving his financial health.

Do not be drowned in credit card debtProblems with Credit Card Debt Reduction

There are many different ways people can reduce their debt, but they have to be committed to it and willing to work to solve the problem. One of the main areas of debt for a lot of people today is credit cards, and many people are interested in a way to reduce that debt quickly. This is often because it seems, even though payments are constantly being made on the credit cards, the balance does not go down by more than a few dollars each month.

To reduce credit card debt quickly, however, much more than the minimum payment has to be made. Most people don’t realize this or don’t want to acknowledge what it means for them. The ones who do understand what they need to do don’t always think they have the money to change their circumstances.

There are always options, though, even for people who feel they have no chance to change their circumstances and reduce their credit card debt quickly. When people are involved with too much credit card debt, they have trouble meeting their other financial obligations as well, and due to this, they can struggle with depression, anxiety, and other difficulties.

Ways To Reduce Credit Card Debt Quickly

There are various ways people can reduce credit card debt quickly. It’s unfortunate that not many people are interested in doing so, or that they don’t feel like they have the means to do it. If more people were aware of what they could do to reduce credit card debt faster than they expected, they would be much more likely to work toward that goal.

In addition to paying larger amounts on the credit cards and finding cards with lower rates, there are other ways to reduce charge card debt quickly. One of those ways to reduce credit card debt in a short period is to refinance a home and use the equity created from that to pay off other debt, such as credit cards.

However, there are a lot of significant problems that can come about from home refinance, as well, so it’s important to be very clear about what’s being done and the amount of money being spent. Paying off the credit cards with equity and then using the credit cards again will only dig the person in deeper where debt’s concerned.

As with any debt reduction strategy, there are good and bad points to paying extra, getting cards with lower rates, and doing things like refinancing a home or taking out a personal loan to pay down debt. Consider the situation carefully to make the best choice, and see a credit counselor to help if necessary. There are also many online tools that can help with debt reduction planning.

Understanding Variation & Managing Business Uncertainty with Monte Carlo Simulation

Monte Carlo Methods encompass a variety of mathematical problem-solving techniques based on randomly generated numbers and probability distributions. The term was coined by Von Newman, after the famous casino in Monaco. Monte Carlo Methods were central to some of the simulations used in the Manhattan Project.

An easy way to understand this approach is by using random numbers to estimate a surface area. Consider a one square foot area subdivided into four equal parts. A randomly generated pair of numbers between zero and one will have a probability of one fourth to be in upper corner sub-square.

Monte Carlo Simulation used in winning tradesAlternatively, imagine the same square hanging on a wall with the upper right sub-square painted in red and a group of drunken people aimlessly throwing darts at it. Of the total amount of darts that hit the square, about one fourth will hit inside the red area. The larger the number of darts, the closer the proportion will be to one quarter.

Take this one step further. Instead of squares let’s draw a complex figure within the square, one whose surface area would be really difficult to calculate, say a Mickey Mouse silhouette. After the drunken crew aimlessly throws enough darts so that 100 hit the square, the number of darts inside the figure will be proportional to its surface area, say 75. Hence, three-quarters of a square foot will be a close approximation of the area of Mickey Mouse!

Random Sampling in Business and Finance

Managing uncertainty is an inherent part of the business, where the future heavily influences the present and the reliability of an outcome is a function of the combined reliabilities of its inputs. One way to cope with this uncertainty is using Sensitivity Analysis to understand the behavior of a given system better. With more than a few variables, it can become a complex and often frustrating task.

Modeling Net Present Value

To take an example from finance, consider a Net Present Value (NPV) calculation. A simple model will likely include variables such as market demand, sales volume by period, unit price, materials cost, inventory levels, etc. Some of these variables can be considered fixed or determined by other variables in our model; others would be expected to vary according to a certain probability distribution.

For example, unit price could be modeled to be a function of expected demand, given its elasticity, but demand itself would be uncertain. Once the probability distribution of each of the relevant variables is determined, a simulation software (well-known packages are @Risk and Crystal Ball) can randomly sample each variable and calculate the NPV many times. The resulting values will constitute an estimate of the probability distribution of the NPV itself.

Understanding the probability distribution of the NPV of a project, allows us not only to understand its variability in a quantitative way (via its standard deviation), but to make reasonable estimates of the likelihood of a given result. For instance, the probability that NPV is greater than zero.

The same ideas can be expanded to virtually any area of business that faces uncertainty, from inventory management to marketing.

A Word of Caution

As with any other modeling method, the validity of simulation results obtained using a Monte Carlo approach is determined by the quality of the model itself and its inputs. While modern software allows the construct fairly sophisticated models with little effort this is no substitute for understanding the underlying concepts. Impressively looking results based on an allocation model can, undeservedly, create the illusion of detail.

An In-Depth Look at the Psychology of Spending

Spending is where personal values and aspirations meet the ancient practices of hunting, gathering, trade and a touch of sympathetic magic. Money is one of the leading tools we have for manipulating our environment. But while some spending is necessary for survival (and to stay out of prison) beyond that, there are choices to be made, and this is where psychology enters the picture.

Impulse buying using credit cards will maim you laterExploring our psychological and emotional relationship with money is a vast topic. But if you narrow the focus to spending or spending habits, it leaves the questions of how and why we spend, what we choose to spend money on and how we feel about it. It begins with that primary function of money – to control and change our environment.

The decision to spend or not to spend can relate to how we feel about the status quo. If you worry that your house is insecure, you buy a burglar alarm. If you feel in a rut, you might spend money on a new outfit or home decor. The act of expenditure alone can feel like movement and progress. Now that I’ve bought the book or the exercise machine the world is a bit different – I’ve DONE something.

Psychologically, spending has an advantage over other means of altering our situation because, as long as the funds and items are available, it has an excellent chance of success. I might never use the exercise bike, but at least I was successful in buying it. I didn’t have to apply to get into the shop or prove myself worthy. I chose when and where to make the purchase and how much to spend. I might have to struggle and compromise in other areas of life, but in the role of customer, I am king.

The link between spending and control isn’t limited to the physical environment. People also use cash to try and influence how they’re perceived, and it’s not limited to prominent status symbols like expensive clothes or cars. We can spend money to reinforce membership of a group. Teenagers, for example, often buy the same make and model as their peers to be seen as one of the crowd. But these youngsters are doing more than controlling the impression they make. They are also demonstrating a second psychological factor of spending – value.

The relationship between spending and value goes deeper than getting value for money. Making a sacrifice shows that something is important to us. We talk about valuing our appearance by spending money on it or being prepared to pay for quality. We send checks to causes we support. The willingness of the teenagers to part with money to follow the customs of their friends is a way of saying “I value my membership in this group.” Throughout the world, gifts are used to express care, appreciation, and respect because they say “I value you.”

But value is relative. We spend when we view the spending more important than having the money. This can work two ways – either the purchase or donation seems valuable, or parting with the money does not. A busy executive who buys family members gifts rather than spending time with them, for example, values time more than money. For some people, spending can be a form of a purge. They rid themselves of money they have mixed feeling about, or deliberately sacrifice it to ease feelings of guilt. It’s also why people often spend a windfall more readily than the money they’ve worked for.

Sacrificing financial freedom when impluse buyingCredit cards, layaway plans, and two-for-one offers play to this idea by making the financial sacrifice appear minimal or hiding it from view. But why would we want to buy things we don’t need in the first place? Because it’s such a great deal! This is the third of my spending psychology factors – consumer prowess.

Shopping is our modern equivalent of the hunt. We even use expressions like “bargain hunting” or “bagging” a bargain. And we all like to think of ourselves as good hunters. Coming away with an apparent bargain demonstrates our prowess as consumers. It makes us feel skillful. Similarly, saying “no” can leave us kicking ourselves for letting it get away, regardless of how much or how little use for the item itself.

These factors are some of our most powerful psychological spending buttons, as advertisers well know. Watch a few commercials, and you’ll see attempts to push them:

  • Create a discontent with the status quo (limp hair? Not enough closet space?).
  • Promise progress and improvement (still using the same old detergent? Have more sex appeal).
  • Appeal to values (kind to the earth, because you’re worth it).
  • Minimize apparent sacrifice (nothing to pay till….)
  • Make the purchase seem skillful (order now and get the steak knives free!)

Understanding the psychology of spending doesn’t help the sellers. The cleverest spenders are the ones who know that certain buttons can be pushed and keep a watchful eye on their own.

Should You Invest In A New Accounting System Or Outsource From CFO Services?

If your accounting system is outdated, you’ll need to make some changes. You want to make sure you can rely on the system you’re using. With that said, investing in an accounting system isn’t your only option. You can also outsource from CFO services. Outsourcing offers all kinds of benefits.

Accounting services might be outsourced from legitimate companiesOutsourcing Will Improve Your Efficiency

Right now, you probably spend a great deal of time managing your accounting system. If you outsource, you won’t have to waste any of your time with system management. You’ll be able to work more efficiently if you outsource.

If you’re looking for ways to improve your efficiency, outsourcing is a great idea. If you do choose to outsource, you’ll be able to free up a lot of time and work more efficiently. You’ll be able to put the time you save to good use.

Outsourcing Can Save You Money

A lot of people avoid outsourcing because they think it will cost them a lot of money. In actuality, outsourcing could wind up saving you cash.

If you upgrade your accounting system, you’ll still have to pay someone to manage all of your accounting needs. These kinds of expenses can add up.

In the long-run, outsourcing should save you quite a bit of money. If you wind up outsourcing from CFO services, you’ll have control over what you spend. You can make sure you don’t spend any more than you have to.

Outsourcing Can Boost Your Profitability

When you have more time to devote to your business, you make your business more successful. Having more time to spend on your business will allow you to increase your profitability significantly.

Many businesses see a huge increase in their profitability levels after they outsource their accounting needs. Spending a small amount of money on outsourcing will allow you to increase your profitability levels dramatically. Outsourcing is one of the best ways to strengthen your business, which means it’s one of the best ways to improve your finances.

Outsourcing Will Help You Plan For The Future

When you outsource to the best CFO services in the US, they’ll work with you to develop a strong business strategy. They’ll work with you to figure out what steps you should take in the future.

When you work with a company like this, you’ll be able to plan ahead and prepare for the things that lie ahead. If you have a robust strategy in place, you’ll be ready for any challenges that come your way.

You can’t just fly by the seat of your pants if you want your business to be successful. If you’re looking for ways to boost your business, you’ll want to work with an outsourcing company to develop a business strategy.

You’ll See Short And Long-Term Benefits

If you invest in a new accounting system, you’ll only see benefits in the short term. If you outsource, you’ll see immediate benefits, and you’ll see long-term benefits as well.

Outsourcing can help you in the present and the future. If you have big plans for your business, outsourcing will allow you to bring those plans into reality. You’ll continue to enjoy the benefits of outsourcing for many months and even years to come.

The key of outsourcing is efficiencyYou’ll Be Able To Make Decisions Quickly

If you are spending all of your time managing your accounting needs, you’re going to struggle to make decisions. When you have a lot on your plate, it can be challenging to figure out what you need to do next.

If you outsource these needs, you’ll have more time to devote to your business, which means it will be easier for you to make important decisions. When you do need to make a meaningful choice, you’ll be able to do so very quickly. Working with CFO systems can allow you to make decisions on the fly.

CFO Systems Can Meet Your Specific Needs

CFO systems will work directly with you to address your needs. They won’t take a one-size-fits-all approach with you. They’ll talk to you and figure out what you need before deciding what to do next.

When you get customized help from CFO systems, you’ll be able to ensure that your business gets exactly what it needs. They’ll talk to you about what your goals are, and they’ll be able to help you achieve them.

A new accounting system may be helpful, but it won’t help you meet any specific needs. If you work with the right outsourcing company, you’ll get exactly what you need and more.

At the end of the day, whether you upgrade or outsource is up to you. With that said, outsourcing offers a lot of benefits. Make sure you consider the benefits of outsourcing before you make your decision. If you look at the pros and cons of outsourcing, you’ll be able to make a decision that you can be proud of.

Borrow from a Local Credit Union – Rebuilding Bad Credit & Saving Money

A credit union may not offer the convenience of a high street bank, but they are there purely to serve the interests of their members and not shareholders. Members can either save or borrow money, regardless of bad credit. Although only small loans are offered, the rate of APR is lower and making regular, punctual monthly repayments can help to rebuild credit. The problem is that credit unions are not extensively advertised so knowing how and where to find one is an obstacle that needs to be overcome.

Taking a loan even with bad credit ratingBorrow Money with a Bad Credit Rating

Missed or late payments will cause a bad credit rating, which can make it difficult to borrow money from a bank. Joining a credit union may mean that a member can get a small loan, provided affordability can be proved. This will help to rebuild credit. It could mean that other mainstream sources of credit are available shortly.

Why Join a Credit Union?

  • Small loans. Members can borrow money to help with emergencies, such as paying the rent.
  • Affordability. A small loan won’t be provided if it is likely to exacerbate financial difficulties.
  • Save money. Members can save money at an attractive rate of interest.
  • Member interests. They work purely for the interests of their members, not shareholders.
  • Support. Help and financial advice are provided without charge.

Ways to Find a Credit Union

  • Work.The majority of consumers join through work as Credit Union members form as a result of a shared, collective interest. For example, working for a specific company (KLM Trading Ltd.) or being a member of a certain profession (teaching).
  • Religion. A church, synagogue or mosque may have established a credit union for its members. Try asking there as this will help regarding eligibility.
  • Family. It may be possible to join if a close relation is a member. For example, having a brother or sister who is a teacher may be an excellent route in.
  • Online search. The Credit Union National Association website has a search facility. Consumers can perform a search based on city, zip code or state.
  • Call. The Credit Union National Association can be contacted on (800) 356-9655. A representative will perform a search on the caller’s behalf and advise accordingly.

Consumers with a bad credit rating may be able to get a small loan from a credit union, provided that they can prove affordability. Choosing to borrow money not only helps to rebuild credit, but it also means that a consumer benefits from a lower rate of APR that would be possible through a pawnbroker or payday loan.