Mortgages and student loans are generally the biggest debts we face, but car loans, the third-largest form of debt in the U.S., can also be pernicious and affect our financial plans. Americans had over $1 trillion in auto loans outstanding in the third quarter of 2015, according to the Fed.
Nearly a quarter of adults surveyed said they or their spouse either purchased or leased a new or used car or truck in the last year. About two thirds of those who purchased a new or used vehicle took out a loan to do so. And 12 percent of car buyers who used loans to pay for their vehicle took out a loan with a longer repayment period than the amount of time they planned to own the vehicle.
That’s a potentially dangerous financial situation to be in, considering how high interest rates on car loans can be. Five percent of those who got their loan from a car dealership or seller and 4 percent who got the loan from a bank, credit union or Internet lender were paying an interest rate of 10 percent or higher.
Tuesday, May 31, 2016
Monday, May 30, 2016
Thoughts for Memorial Day
“The brave die never, though they sleep in dust: Their courage nerves a thousand living men.” ~ Minot J. Savage
"Who kept the faith and fought the fight; The glory theirs, the duty ours." ~ Wallace Bruce
“Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty.” ~ John F. Kennedy
"Who kept the faith and fought the fight; The glory theirs, the duty ours." ~ Wallace Bruce
“Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty.” ~ John F. Kennedy
Friday, May 27, 2016
A Disastrous Earnings Season
First-quarter earnings season is close to over, and it looks like it may be the worst once since the Great Recession. Overall profits for S&P 500 companies in the quarter so far have been their weakest in six and a half years.
A full 98.4 percent of S&P 500 companies have now reported as of yesterday, and earnings per share is down 7 percent from a year ago, according to FactSet. That's the biggest drop since the third quarter of 2009. On the heels of a 3.2 percent decline in the fourth quarter, it also marks the fourth straight quarter of year-over-year earnings declines.
With oil prices continuing to be low, energy was the worst performer, with a staggering 108 percent decline in earnings for the quarter.The materials subsector was second weakest with a 14.5 percent decline, followed by the financial sector, which was down 12.2 percent.
A full 98.4 percent of S&P 500 companies have now reported as of yesterday, and earnings per share is down 7 percent from a year ago, according to FactSet. That's the biggest drop since the third quarter of 2009. On the heels of a 3.2 percent decline in the fourth quarter, it also marks the fourth straight quarter of year-over-year earnings declines.
With oil prices continuing to be low, energy was the worst performer, with a staggering 108 percent decline in earnings for the quarter.The materials subsector was second weakest with a 14.5 percent decline, followed by the financial sector, which was down 12.2 percent.
Thursday, May 26, 2016
Time to Hit the Road
Are you hitting the road this Memorial Day weekend? Get ready to run into some traffic, as more than 38 million Americans will be traveling over the holiday weekend, according to a survey by AAA Travel. That includes nearly 1 million people right here in New Jersey.
More than 960,000 New Jersey residents are expected to travel more than 50 miles this weekend. That's the highest travel volume for the holiday in a decade, since 965,000 residents hit the road in 2006. It’s also a 1.7 percent increase from the 944,000 travelers last Memorial Day weekend.
Low gas prices are one thing spurring all that travel. This year’s gas prices are the lowest since 2005, when a gallon cost an average of $2.04 in New Jersey and $2.10 nationally. AAA estimates Americans have saved $18 billion on gas so far this year compared with the same period in 2015.
More than 960,000 New Jersey residents are expected to travel more than 50 miles this weekend. That's the highest travel volume for the holiday in a decade, since 965,000 residents hit the road in 2006. It’s also a 1.7 percent increase from the 944,000 travelers last Memorial Day weekend.
Low gas prices are one thing spurring all that travel. This year’s gas prices are the lowest since 2005, when a gallon cost an average of $2.04 in New Jersey and $2.10 nationally. AAA estimates Americans have saved $18 billion on gas so far this year compared with the same period in 2015.
Wednesday, May 25, 2016
The Tech Rebound
Yesterday was another big day for tech stocks, and the sector that has been one of the most disappointing in the entire market is now close to posting a gain on the year. After a string of disappointing first-quarter earnings in April, tech companies in the S&P 500 have risen 3.4 percent so far in May.
That increase brings the tech sector’s 2016 losses down to 0.1 percent. The sector is still the third-worst performer behind health care and financials so far this year, but there may be more good news on the way.
Of tech companies in the S&P 500, 76 percent have announced earnings above analysts’ estimates, and 61 percent have reported revenues that beat expectations, according to FactSet as of Friday. That's higher than the overall marks for the S&P 500, where 71 percent have beat earnings expectations and 53 percent exceeded revenue forecasts.
That increase brings the tech sector’s 2016 losses down to 0.1 percent. The sector is still the third-worst performer behind health care and financials so far this year, but there may be more good news on the way.
Of tech companies in the S&P 500, 76 percent have announced earnings above analysts’ estimates, and 61 percent have reported revenues that beat expectations, according to FactSet as of Friday. That's higher than the overall marks for the S&P 500, where 71 percent have beat earnings expectations and 53 percent exceeded revenue forecasts.
Tuesday, May 24, 2016
Even the Wealthy Don't Diversify
Diversification is a watchword for most financial advisors, but many people still haven't caught on - even the wealthy. Some 27 percent of investors with at least $1 million in net worth said their No. 1 investing mistake before working with a financial adviser was a failure to diversify their portfolios properly.
That's according to a survey of clients of the financial advisory firm deVere Group in the U.S., U.K., Asia, Africa and Europe. The firm says the problems weren't because of a lack of knowledge about diversification, but because of what happens when habits and emotions get in the way of making good decisions.
Other regrets included 23 percent of clients saying they wish they had started investing earlier, 20 percent regretted focusing too much on short-term results when investing, 15 percent said they were emotional over investments and 8 percent said they did not keep enough cash in reserve.
That's according to a survey of clients of the financial advisory firm deVere Group in the U.S., U.K., Asia, Africa and Europe. The firm says the problems weren't because of a lack of knowledge about diversification, but because of what happens when habits and emotions get in the way of making good decisions.
Other regrets included 23 percent of clients saying they wish they had started investing earlier, 20 percent regretted focusing too much on short-term results when investing, 15 percent said they were emotional over investments and 8 percent said they did not keep enough cash in reserve.
Monday, May 23, 2016
America's Biggest Retirement Regret
According to a survey of more than 1,000 adults from Bankrate.com, their biggest regret is not saving for retirement early enough. Nearly one in five Americans put this in the No. 1 spot. What’s more, among those 65 and up, 27 percent said this was the biggest regret, compared with 17 percent of those aged 30 to 49.
According to 2015 data from the Employee Benefit Research Institute, fully 28 percent of workers say they have less than $1,000 saved and 17 percent have between $1,000 and $9,999. Meanwhile, just 14 percent of workers have $250,000 or more saved.
Other financial regrets that Americans have include not having enough saved for emergencies, cited by 13 percent, and taking on too much student loan debt. Just 3 percent said their biggest regret was buying too much house.
According to 2015 data from the Employee Benefit Research Institute, fully 28 percent of workers say they have less than $1,000 saved and 17 percent have between $1,000 and $9,999. Meanwhile, just 14 percent of workers have $250,000 or more saved.
Other financial regrets that Americans have include not having enough saved for emergencies, cited by 13 percent, and taking on too much student loan debt. Just 3 percent said their biggest regret was buying too much house.
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