Oct 102014
 

The Labor Market

In September 248,000 new jobs were created in the U.S. 🙂 The national unemployment rate dropped from 6.1% to 5.9%, the lowest since 2008. This must mean we’re almost back at pre-recession, full employment right? Well if you ask people on the streets how they feel about the strong labor market recovery, many of them will not know what you’re talking about.

14-10-cloe-what-recovery-labor-market

The Chicago PMI which is a confidence indicator for businesses dropped to 60.5 in September from 64.3 in the previous month. The Conference Board published its Consumer Confidence survey and they were expecting 92.5 in September. However the actual number was only 86 🙁 So why is there a disconnect between the employment data and how people really feel about their finances? To understand this we simply have to dig a little deeper into the numbers.

Read Between the Lines

Compared to Canada’s high unemployment rate of 6.8%, the U.S. appears to be quite smug sitting at just 5.9%. 😛 However the unemployment rate does not account for people who are no longer looking for a job. And in September 315,000 people in the U.S. dropped out of the labor market. The labor force participation rate is now at 62.7%. This is the lowest it has been in 36 years! The last time this many people was out of work relative to the population size was back in 1978. This is why so many people are still frustrated with the job market, and don’t believe that the U.S. economy has recovered. The number of jobless people rose to an all time high of 92.6 million last month. That’s 92.6 million people not paying any income tax. That’s more than 1/3rd of everyone who could be working, but aren’t. 😯

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Mar 082013
 
Happy International Women’s Day

13_03_friendsbenefits, celebrate women's dayToday is March 8th so let’s celebrate women’s economic and social achievements. I watched an 11min interview featuring a couple of representatives from TD Bank. Ms. Caranci is an economist and Ms. Caskey is a portfolio manager. They mentioned that studies from Credit Suisse and other notable institutions show that corporations with more female board members outperform those that have less. For example looking at the S&P/TSX Composite index over the last year companies with at least one woman on the board have seen a 7.2% return on average, while the overall index returned just 4% 😀 Makes sense to me. Women represent half the consumer market place. So if I was running a company I would certainly want to have a woman’s perspective when it comes to making strategic business decisions. It’s too bad that only 11% of board members of companies on the TSX Composite are female. In the interview, Ms. Caranci says this is partly because of the composition of our industries. For example, half the stock market index is made up of resource companies and they “only have 6 to 7 percent representation of women, so they’re really pulling down those numbers.” So what can corporate Canada do to get more women represented on company boards? There are a few ideas floating around. For instance some European countries have strict quotas for their companies. In Norway publicly traded companies must have at least 40% female representation on the board, or else the company faces penalties or sanctions, such as being de-listed from the stock exchange 🙁 I don’t think Canada should necessarily adopt those kinds of laws because some argue mandatory quotas does more harm than good for women in the workplace, but I’m sure we can figure something out.

So how can the average investor use this information? Well since the research has suggested that a board of directions with a diverse background of both men and women tend to outperform the benchmark, we should consider this information when researching which stocks to buy. Thankfully, Ms. Caskey gave us a list of some notable companies that have a relatively high female representation on the board or executive team. I’ve listed a few below. Stock symbols are in (brackets) 😉

Potash Corp (POT) – 23% female board
EnCana (ECA) – 30% female board
Lululemon (LLL) – 45% female board

I currently have POT and ECA in my long term buy and hold portfolio. LLL is a very interesting company that started in Vancouver and has expanded very successfully into other countries. The brand was even featured on Oprah, lol. I’m a little concerned about the stock’s valuation because I don’t know how long it’ll continue to grow at its current rate. So this athletic apparel company is only on my watch list for now (^_^) Side note: LLL is not included in the TSX Composite index.

13_03_lululemonbrand, women's day

February Employment

How about some good news to end the work week 😀 Canada created 51,000 new jobs last month, and most of them are full-time work. The overall unemployment rate remains unchanged at 7.0 from the month prior, however this means more people are in the workforce which is a good thing. ON and BC made up most of the gains, with 35,000 and nearly 20,000 new jobs respectively. In the United States about 236,000 new jobs were created in February and unemployment edged down to 7.7% which gave investors the confidence to push the Dow Jones Industrial Average up by almost half a percent today to end the week at $14,397, yet another record high 😀

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Blog roundup – Personal finance and other interesting articles from around the web
Passive Income Earner explains the difference between Bonds and Preferred Shares
Mrs. Pop from Planting our Pennies shares their up to date balance sheet (net worth) They have a ton of assets
Mr. CBB from Canadian Budget Binder has some pretty impressive numbers for his family as well.
Laurie from Frugal Farmer encourages anyone who might be struggling with their finances to take back control
Money After Graduation on the value of a concert ticket
Pauline from Reach Financial Independence on realizing not everyone has to have the same goals because we all have different values
Jordann from My Alternate Life on what it takes to become an entrepreneur
Frugal Rules has several tips on doing your income taxes
Mo’ Money Mo’ Houses tells us a little bit about the writer behind the blog, herself

 

Jan 032013
 

I hope everyone had a great holiday. December saw some good performance in the stock market. US economy added 155,000 jobs in December, unemployment rate stayed at 7.8 per cent. This means all the government stimulus and spending in the past has halted, and now the pressure is on the private sector to create jobs and generate new taxes to help pay back the money borrowed from those stimulus programs. Overall I feel pretty confident about the global financial outlook in 2013.

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*Side Income:
  • Part-Time Work = $1,100
  • Dividends = $400

*Discretionary Spending:

  • Eating Out = $100
  • Others = $2,500

*Net Worth: (MoM)

  • Assets: total = $497,500
  • Cash = $1,000 ($19,200)
  • Stocks = $68,700 (+$1,300)
  • RRSP = $29,800 (-$700)
  • Home  = $248,000
  • Farm = $150,000 (New)
  • Liabilities: total = $357,200
  • Mortgage = $204,500 (-$300)
  • Farm Loan = $112,000 (New)
  • Margin Loan = $20,900 (unch)
  • Line of Credit = $19,800  (New)
  • RRSP Loan = $0 (-$1,000)

*Total Net Worth = $140,300 (+1.67%

Net worth on Dec 31st, 2011 = $102,300

So year over year change = +$38,000 (+37.1%)

I finally used all the money I had in a trust account to pay for the down payment on a farm so my net worth statement will have some new additions. Also the $2,500 expenses under the “Others” spending category is the legal fees associated with purchasing the farmland.  Last year at this time I had just broken the 6 figure net worth mark. This year I am $38,000 wealthier and continuing on my way to financial freedom.

 

* Numbers are rounded to the nearest $100.