Tuesday, January 24, 2012

Policy Uncertainty Index

The Policy Uncertainty Index, developed by a team of professors from Stanford and the University of Chicago, illustrates how uncertainty about the direction of future government policy can weigh on our economy.  The index takes into consideration:
  1. The frequency of news stories on the issue of government policy uncertainty
  2. Expiring federal tax provisions (there happen to be 41 in 2012) 
  3. Disagreement among forecasters over inflation and federal government purchases
The professors estimate that the significant increase in policy uncertainty over the past five years (which has increased overall economic uncertainty) has cost our economy 2.5 million jobs. 

We would agree that a strong implication of their research is that clarity on future tax and spending policies may lead to acceleration in economic growth.  Today, many businesses are unwilling to invest for growth or hire new employees because of the uncertainty of future tax rates.  Another key issue that continues to burden us is our federal deficit and growing debt level. 

The United States and the rest of the developed world need to focus on policies that will support economic growth.  As U.S. citizens we should demand candidates for 2012 election (presidential, congressional, and gubernatorial) put forth their vision for restoring growth and be judged accordingly

Thursday, January 19, 2012

Worst Retirement Destinations

There are dozens of lists available for the “best retirement spots,” but where can you find information about the retirement destinations you should avoid like the plague?  TopRetirements.com has released results of their most recent study of the worst states to retire to and the conclusions may be surprising. 
The study, based mainly on objective data such as tax rates, weather and cost of living, ranked ten states as the worst in the union to retire to.  Seven of these worst ten states earned the same honor last year!  Here is the first half of their list and a short explanation of why each state earned it's spot:
1.     Connecticut: high taxes and cost of living
2.     Illinois: state is in severe fiscal trouble
3.     Rhode Island: high property taxes
4.     Vermont: high property and income taxes
5.     Massachusetts: high taxes, although social security income is exempt
What is less surprising about the list is that most of the top ten worst states for retirees are positioned in the northeast, partly because of the unfavorable climate and generally high property taxes, two key factors in the study.
To find more information on this topic and use a tool that allows you to customize the ranking specific to your tastes, visit http://tinyurl.com/7qlcj4b.
 

Tuesday, January 10, 2012

Volatility in the Dow Index

Since the Dow Jones Industrial Average (DJIA) is an index many pay attention to, we’d like to share some interesting facts.  These speak to the amount of volatility we’ve experienced in the stock market over the past several years.     

Ø  The DJIA crossed from below the 12,000 level to close above it 14 times in 2011.  The 12,000 level was first crossed on October 19, 2006 and then the index went below 12,000 on June 20, 2008.  It would not reach 12,000 again until February 1, 2011.

Ø  The 11,000 level was first reached on May 3, 1999.  The index fell below 11,000 on September 26, 2008 and did not to reach 11,000 again until April 12, 2010.  We started 2011 above the 11,000 level but crossed it from below that level to close above 11,000 five times during the year.   

Please note all numbers are reported on a closing basis.