So what are we to make of the recent drop in the price of gold? Is this a sign that the economy, both here in the United States and globally, is recovering? USNews.com reports:

The price of gold is possibly the best proxy for the outlook on global stability, and lately the price of gold has been plunging. At about $1,400 per ounce, gold is down more than 15 percent so far this year, and down about 27 percent from the all-time high of $1,921 it reached in September of 2011. A lot of factors affect the price of gold, but in general, the value of gold rises when investors worry about the global economy and falls during better times when stocks and other assets seems like better investments.

The economy is still fragile, with chronically high unemployment in the United States, debt problems pervasive in Europe, and growth in China slowing more than expected. But there’s nothing new about these problems and in general, investors seem to be gaining confidence that the worst possible outcomes won’t happen. “Wherever there is a crisis, it is being patched up,” currency expert Axel Merk of Merk Investments wrote in a recent newsletter. “That doesn’t make the rest of the world ‘safe,’ but it may be perceived to be less risky than before the patch was applied.”

There’s no secret about who’s applying the patch: the Federal Reserve and its chairman Ben Bernanke, followed by the European Central Bank and now, the Bank of Japan. The Fed’s aggressive easy-money policies, known as quantitative easing, date to 2008 and could continue into 2014 or 2015. The ECB has been pursuing similar policies since 2012 and the Bank of Japan recently announced its own Fed-style easy-money program.

On the surface, the fact that gold prices are dropping sharply is a sign of increasing confidence in the global economy at large. These types of market signals are generally more valuable than any polling data or even analysis from economists—because these signals are created by investors literally “putting their money where their mouth is” and shifting their investments back into stocks, bonds, and other assets.

But there is reason for caution, and it’s made clear in the final paragraph of the excerpt we posted above. Namely, the fact that central banks are taking historically unprecedented action to stimulate their economies. For the time being, these actions appear to be successful. But a forward-thinking investor has to question the eventual consequences that may result from this aggressive stimulus. Specifically, the threat of inflation posed by this stimulus is significant. Stay tuned!

If you would like to learn more, we can help. And if you are ready to create a financial game plan for your future, get in touch with us today. We’ll help you create a portfolio that is protected against economic instability, inflation, and market volatility. We look forward to hearing from you!

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The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by CelebritySites™.

Stocks rose on Tuesday, driving the S&P 500 within striking distance of its all-time high, as strong data on home prices and manufacturing fed optimism about the economy, although the improvements were seen as slow.

Data showed U.S. single-family home prices rose in January at the fastest pace in more than six years while long-lasting U.S. manufactured goods, also known as durable goods orders, shot up in February.

 ”I think the batch of data was enough to convince investors that the U.S. economy is on the right track,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co, in New York.

“At this point, it’s hard to argue that anything will derail the U.S. economy, and that is boosting investors’ confidence as they continue to load up on equities.”

Still, investors may look for reasons to take profits, with the S&P 500 up 9.4 percent so far this year. The rally has lifted the benchmark index near its all-time closing high, which it nearly reached on Monday.

The benchmark S&P 500 index traded on Monday just a quarter point below its all-time closing high, then retreated as investors cashed in gains in the wake of news out of Europe. Its record close stands at 1,565.15, set October 9, 2007.

In a sign that growth continues to be slow, sales of new U.S. single-family homes fell more than expected in February, and the latest reading on consumer confidence was weaker than expected.

Shares of homebuilding stocks were mixed. Lennar Corp (LEN.N) stock edged up 0.4 percent to $41.71, but Hovnanian Enterprises (HOV.N) shares slid 3 percent at $5.88.

Investors remained concerned about the negative implications of a financial rescue plan for Cyprus. They worried it would serve as a template for other euro-zone economies requiring bailouts.

As you can see, there are many mixed signals regarding the overall strength of the economy. In particular, the financial crisis in the European country of Cyprus concerns many investors. As you plan for retirement, one of the key questions you are likely asking yourself is “can we trust the market again?” After the crash of 2007-2008, it’s easy (and probably wise) to remain skeptical. At the very least, your portfolio should be diversified across a variety of asset classes so that you are not overly dependent on the Wall Street recovery to continue.

If you’d like to learn more, or if you’d like help creating an investment plan that is protected against the dangers of market volatility, rising inflation, and increasing tax rates, we can help. Please get in touch with us today!

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The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by CelebritySites™.

The Washington Post reports:

Four days from the onset of the so-called “sequester,” a series of wide-ranging across-the-board budget cuts, politicians from both parties spent Monday talking about how ill-advised it would be to allow the cuts to proceed.

But they appeared to be making little—or no—progress toward preventing them.

At the White House, President Obama told a gathering of the nation’s governors that “Congress is poised to allow a series of arbitrary, automatic budget cuts to kick in that will slow our economy, eliminate good jobs and leave a lot of folks who are already pretty thinly stretched scrambling to figure out what to do.”

Obama urged the governors to lobby their state’s Congressional delegations, telling them, “These cuts do not have to happen. Congress can turn them off anytime with just a little bit of compromise.”

On the Republican side, a trio of governors on Monday argued that Obama was trying to frighten the public about the impact of the cuts, and urged him to continue pursuing alternate spending reductions as they criticized his call for new tax revenue.

“I think he’s trying to scare the American people,” Louisiana Gov. Bobby Jindal (R) told reporters at a Republican Governors Association news conference following a meeting with Obama at the White House.

Wisconsin Gov. Scott Walker (R), vice chairman of the RGA, and South Carolina Gov. Nikki Haley (R) appeared alongside Jindal and echoed his criticism of the president.

“My kids could find 83 billion dollars” to cut “from a four-trillion-dollar budget,” Haley said.

The deep cuts, split evenly between defense and domestic spending are set to begin Friday, unless lawmakers act to avert them. Democrats are advocating a mix of new tax revenues and alternate spending reductions as a means of avoiding the sequester. Republicans are opposed to any tax increases.

Why is this a big deal for investors? To put it simply, significant spending cuts would be a shock to the economy, which is still struggling to recover from recession. The spending cuts would impact a variety of different sectors of the economy, but the net result will be less money flowing into the private sector. In turn, consumers will reduce their spending (because they have less money to spend), and businesses will suffer. Businesses will lay off employees in order to cut their costs, and the cycle continues.

Now, nobody disputes that we have a serious budget deficit problem. But many respected economists on both sides of the aisle would prefer to see the deficit dealt with in a more deliberate, sensitive manner. As an investor, it’s hard not to be concerned. Should the cuts occur, the economy may be worse off for it.

If you’d like to learn more about creating a portfolio that is protected against market volatility and economic unrest, please get in touch with us today!

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The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by CelebritySites™.

Is it possible that there is finally reason to start thinking optimistically? Some think so. As a blog entry published by the Washington Post reports:

Lately, we’ve been getting some genuinely encouraging news on the jobs front. For the past two weeks, the number of initial unemployment claims has been plummeting. A lot. Does that mean the U.S. labor market is rapidly improving? Or is it all just a statistical fluke?

On Thursday, the Department of Labor reported that the number of new people filing for unemployment benefits fell to just 330,000, a huge drop from the previous week and a new five-year low. This is usually a good indicator of the state of the labor market, so that’s a healthy sign. What’s more, initial jobless claims have been dropping far faster than economists have expected all January.

So does that mean we’re on the verge of an economic boom? Many analysts remain quite cautious about this recent drop. The usual thing to say is that claims data in January is often quite volatile, since it’s inherently difficult for government statisticians to make the proper adjustments for seasonal hiring around the holiday period.

One theory, offered up by Quartz’s Matt Phillips, is that the recent drop might simply be due to a temporary surge of construction hiring as the Northeast tries to rebuild after superstorm Sandy. He points out that New York saw the largest decline in jobless claims last month, some 27,000, thanks to “fewer layoffs in transportation, construction, and educational service industries.”

[…]

It’s possible that the labor market really is getting much better, much faster than anyone expected. With the U.S. unemployment rate still at a painfully high 7.8 percent, that would help a lot. Remember, if the recent gradual pace of job growth persists, it will take more than a decade for the United States to get back to full employment.

Time will tell whether or not these statistics are just a fluke, or whether they are signs that unemployed Americans are finally able to begin finding jobs.

Either way, as an investor it’s important to remember that the performance of your investments is often largely dictated by economic factors that are outside of your control—such as inflation, taxation, and market volatility. Whether or not the economy is finally coming out of this slump, it is critical that you protect yourself and your family against future volatility. If you’d like to learn more about creating an investment portfolio that shields you from these risks, please get in touch with us today!

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The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by CelebritySites™.

OK, that may be a bit of an overstatement—but the truth is that the real estate market is a vital component of the overall economy, for better or for worse. Many of you may recall that the economic collapse of 2007 and 2008 was preceded by a massive plunge on the part of the real estate market. And many analysts blame the agonizingly slow recovery we are currently experiencing on the lackluster recovery of the housing market.

Now, however, things may be changing for the better. Bloomberg reports:

Home prices climbed more than forecast in October, indicating a rebounding real-estate market will bolster the U.S. economy for the first time in seven years.

The S&P/Case-Shiller index of property values in 20 cities increased 4.3 percent from October 2011, the biggest 12-month advance since May 2010, the group said today in New York. The median forecast of 30 economists in a Bloomberg survey projected a 4 percent gain.

Property values will probably keep heading higher as record-low mortgage rates, a growing population and an improving economy spur demand for housing. The turnaround in real estate is buoying household confidence and wealth, one reason why consumer spending is improving even as concern mounts that lawmakers will fail to stave off looming tax increases.

“The housing market is definitely starting to recover,” said Ryan Wang, an economist with HSBC Securities USA Inc. in New York, who’s the second-best forecaster of the S&P/Case- Shiller index over the past two years, according to data compiled by Bloomberg. Higher property values have “added about a trillion dollars to household wealth just since the beginning of this year.”

The boost to household net worth “will provide an important benefit for consumers and for the broader economy,” Wang said.

A sustained pickup in housing is a source of strength as the world’s largest economy struggles to overcome concern the so-called fiscal cliff, representing more than $600 billion in tax increases and federal government spending cuts slated to take effect next year should Congress fail to act, will slow the expansion.

Residential homebuilding has contributed 0.3 percentage point to gross domestic product on average in the first three quarters of 2012, according to Commerce Department data. The last time it added to growth for an entire year was in 2005, when it boosted the economy by 0.36 point.

Obviously, we have a long ways still to go before the economy returns to full strength. Unemployment remains high—and many analysts are concerned about the threat posed by our skyrocketing government deficits.

But while challenges certainly remain, a recovering real estate market is a huge step in the right direction. If you’d like to learn more about the opportunities created by these developments, or if you’d like help structuring your investment portfolio to succeed no matter what the economic conditions may be, please get in touch with us today!

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The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by CelebritySites™.

Of course, as lawmakers head back to Washington DC, they must immediately address the “fiscal cliff” that our nation is currently plummeting towards. As we’ve discussed previously, the fiscal cliff refers to a package of government spending cuts and tax increases designed to reduce the deficit. Unfortunately, most economists predict that these policies will lead to a recession if a more gradual approach is not adopted. Here’s how the Associated Press explains the matter:

The so-called “fiscal cliff” is an economy-rattling combination of expiring Bush- and Obama-era tax cuts and major across-the-board spending cuts to the Pentagon and domestic programs.

The cliff is the punishment for previous failures of a bitterly divided Congress and White House to deal with the government’s spiraling debt or overhaul its unwieldy tax code. The Congressional Budget Office estimates that the austerity program would reduce the deficit by $503 billion through the end of next September – or approaching $700 billion for the entire calendar year. CBO says millions of jobs could be lost.

The fiscal cliff includes:

• The expiration of Bush-era tax cuts on income, investments, married couples and families with children and inheritances. In addition, some 26 million additional face the alternative minimum tax next filing season, which would raise their taxes by an average of $3,700. Cost through September: $330 billion.
• A $55 billion, 9 percent cut in the defense budget next year and another $55 billion in cuts to domestic programs, including a 2 percent cut to Medicare providers.
• The expiration of unemployment benefits for the long-term jobless. Cost: $26 billion.
• A sharp cut in reimbursements for doctors participating in Medicare. Cost: $11 billion.
• The expiration of Obama’s temporary 2 percentage point cut in payroll taxes. Cost: $95 billion.
• A variety of smaller taxes cuts for both businesses and individuals collectively known as tax “extenders.” They include a tax credit for research and development and a deduction for sales taxes in states that don’t have an income tax. Cost: about $65 billion.

Now, taking steps to reduce our deficit is clearly a good thing. But many economists question whether our currently weak economy could survive such a drastic shock. Possible consequences include a rise in unemployment, volatility on Wall Street, and even the possibility of a financial collapse similar to what we experienced in 2007 and 2008.

Most Americans are united in their hope that our politicians will work out an agreement and avoid these consequences. But given the dysfunction of the last several years, would you want to bet your financial future on it?

If you’d like to learn more about the implications of economic uncertainty on your portfolio, and if you’d like to learn how you can protect yourself and your future in these turbulent times, please get in touch with us today!

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The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by CelebritySites™.

The French government presented a budget Friday that was heavy on taxes — including a controversial 75 percent income rate on high earners — but which critics said lacked fundamental reforms that could jumpstart economic growth.

President Francois Hollande’s cabinet defended the spending plan for next year, calling it a “fighting budget” that would win the “battle” against joblessness and help growth.

Like many European countries, France must tread a fine line between cutting the debts that dragged them into the current financial crisis and investing in the economy to spur growth.

The French economy, the second largest among the 17 countries that use the euro, has not grown for three straight quarters, the national statistics agency confirmed Friday. Its gross domestic product stands at €1.8 trillion ($2.2 trillion). Unemployment has been on the rise for more than a year and stands at 10.2 percent.

Economists warn, however, that things could get much worse in France if it doesn’t get serious about slashing state spending and reforming stringent labor laws.

“This is a serious budget, it’s a leftist budget and it’s fighting budget,” Finance Minister Pierre Moscovici told French radio station Europe-1 Friday morning.

Because Hollande promised that he would slash the country’s deficit to 3 percent of its GDP next year — a limit required by European rules — the government must find €30 billion in savings. One-third will come from spending cuts. The rest will come from new or higher taxes on the wealthy and big companies, including a new 75 percent tax on earned income that exceeds €1 million.

The factors that lead the French government to massively raise taxes are similar to what we face here—soaring budget deficits, chronic unemployment, and falling government revenue. In January of 2013, when a new President and Congress have been elected, how will they confront these challenges here at home? There is no question that our deficit needs to be reduced—and considering that neither party has been able to reduce spending over the last decade, despite the rhetoric, the only option would appear to be a revenue increase. And that means… tax hikes.

How would tax increases impact your portfolio? Are you prepared in the event of significant changes to tax policy? What about the threat of inflation? These are all serious factors which must be considered by every investor—if you’d like to learn more, please contact me today!

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The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by CelebritySites™.