What Does Mutual Fund Mean?
An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.
Investopedia explains Mutual Fund...
One of the main advantages of mutual funds is that they give small investors access to professionally managed, diversified portfolios of equities, bonds and other securities, which would be quite difficult (if not impossible) to create with a small amount of capital. Each shareholder participates proportionally in the gain or loss of the fund. Mutual fund units, or shares, are issued and can typically be purchased or redeemed as needed at the fund's current net asset value (NAV) per share, which is sometimes expressed as NAVPS.
What Does Hedge Fund Mean?
An aggressively managed portfolio of investments that uses advanced investment strategies such as leveraged, long, short and derivative positions in both domestic and international markets with the goal of generating high returns (either in an absolute sense or over a specified market benchmark).
Legally, hedge funds are most often set up as private investment partnerships that are open to a limited number of investors and require a very large initial minimum investment. Investments in hedge funds are illiquid as they often require investors keep their money in the fund for at least one year.
Investopedia explains Hedge Fund...
For the most part, hedge funds (unlike mutual funds) are unregulated because they cater to sophisticated investors. In the U.S., laws require that the majority of investors in the fund be accredited. That is, they must earn a minimum amount of money annually and have a net worth of more than $1 million, along with a significant amount of investment knowledge. You can think of hedge funds as mutual funds for the super rich. They are similar to mutual funds in that investments are pooled and professionally managed, but differ in that the fund has far more flexibility in its investment strategies.
It is important to note that hedging is actually the practice of attempting to reduce risk, but the goal of most hedge funds is to maximize return on investment. The name is mostly historical, as the first hedge funds tried to hedge against the downside risk of a bear market by shorting the market (mutual funds generally can't enter into short positions as one of their primary goals). Nowadays, hedge funds use dozens of different strategies, so it isn't accurate to say that hedge funds just "hedge risk". In fact, because hedge fund managers make speculative investments, these funds can carry more risk than the overall market.
What Does Target Risk Fund Mean?
A fund that attempts to expose its investors to a specified amount of risk. The fund manager of a target risk fund is responsible for overseeing all the securities owned within the fund, to ensure that the level of risk isn’t greater or less than the fund's target amount of risk exposure.
Investopedia explains Target Risk Fund...
Target risk funds typically label themselves as "conservative", "moderate risk" or "aggressive" in terms of their risk exposure. Regardless of the label applied, the intent is to offer a relatively constant level of risk exposure to investors.
This allows investors who are considered highly risk averse to identify and select a fund of funds that has a conservative risk exposure target, and once invested in the fund, remain confident that their level of risk exposure will not change substantially.
The manager of a target risk fund is responsible for ensuring that the fund's level of risk exposure is on target, and the fee’s charged for operating the fund (on top of the fees charged by mutual funds owned within the target risk fund) is compensation for the value-added service.
What Does Fund Of Funds Mean?
A mutual fund that invests in other mutual funds.
This method is sometimes known as "multi-management".
Investopedia explains Fund Of Funds...
A fund of funds allows investors to achieve a broad diversification and an appropriate asset allocation with investments in a variety of fund categories that are all wrapped up into one fund. However, if the fund of funds carries an operating expense, investors are essentially paying double for an expense that is already included in the expense figures of the underlying funds.
Historically, a fund of funds showed an expense figure that didn't always include the fees of the underlying funds. As of January 2007, the SEC began requiring that these fees be disclosed in a line called "Acquired Fund Fees and Expenses" (AFFE).
Wednesday, December 24, 2008
Thursday, December 18, 2008
HOW TO SAVE IN BAD TIMES
HOW TO SAVE IN BAD TIMES
Bad times are likely to bring deflation, and deflation can make you poorer, even drive you into bankruptcy. Or it can make you significantly richer. The choice is yours. One thing you can do that will make the biggest difference is saving! If you can’t save, deflation could hurt you. If you can save, deflation will help you reap some very nice benefits:
Benefit 1. Your savings will go a long way. When you do spend, you will get more for less.
Benefit 2. At the right time, you will be able to buy great investment bargains. The investment world will be like one giant clearance sale at a major department store.
Benefit 3. Income! Right now, interest rates are low. But even low interest rates are better than a high-interest expense. Moreover, if you wait for a time when bond markets have fallen and their yields have risen, you could lock in a relatively high rate for many years to come.
Benefit 4. Even if there is no deflation, you will sleep better at night knowing that you have a good cushion to fall back on in case of any unexpected event. And even if inflation heats up again, you can largely keep up with the inflation by keeping your savings in a money market mutual fund—your interest income is likely to go up more or less in synch with the inflation.
To reap these benefits, follow these steps:
Step 1. Figure out how much you can comfortably save each month. Many people aim too high, fail, and then give up. Better to aim low and then stick with it religiously.
Step 2. If at all possible, make sure that money is saved automatically. Your employer, your credit union, or your bank will provide additional information on how to set it up. However, make sure it is a safe institution. For a rating on almost any bank, visit www.weissratings.com; for a rating on a credit union, visit www.veribanc.com.
Step 3. If you cannot set up an auto-savings program, resolve to never spend a dime until after your monthly savings have been set aside. There is absolutely no expenditure (except basic necessities, of course), which is more important than savings. This has always been true. In bad or deflationary times, it’s not even an option. Unless you already have a substantial nest egg, you almost invariably have to do it.
Step 4. Let time work for you. You will be absolutely amazed at how much money you can accumulate just by putting the same small, comfortable amount away month after month. And that’s even without any interest. Once you add the interest, plus the interest on the interest, you will be even more amazed.
Bad times are likely to bring deflation, and deflation can make you poorer, even drive you into bankruptcy. Or it can make you significantly richer. The choice is yours. One thing you can do that will make the biggest difference is saving! If you can’t save, deflation could hurt you. If you can save, deflation will help you reap some very nice benefits:
Benefit 1. Your savings will go a long way. When you do spend, you will get more for less.
Benefit 2. At the right time, you will be able to buy great investment bargains. The investment world will be like one giant clearance sale at a major department store.
Benefit 3. Income! Right now, interest rates are low. But even low interest rates are better than a high-interest expense. Moreover, if you wait for a time when bond markets have fallen and their yields have risen, you could lock in a relatively high rate for many years to come.
Benefit 4. Even if there is no deflation, you will sleep better at night knowing that you have a good cushion to fall back on in case of any unexpected event. And even if inflation heats up again, you can largely keep up with the inflation by keeping your savings in a money market mutual fund—your interest income is likely to go up more or less in synch with the inflation.
To reap these benefits, follow these steps:
Step 1. Figure out how much you can comfortably save each month. Many people aim too high, fail, and then give up. Better to aim low and then stick with it religiously.
Step 2. If at all possible, make sure that money is saved automatically. Your employer, your credit union, or your bank will provide additional information on how to set it up. However, make sure it is a safe institution. For a rating on almost any bank, visit www.weissratings.com; for a rating on a credit union, visit www.veribanc.com.
Step 3. If you cannot set up an auto-savings program, resolve to never spend a dime until after your monthly savings have been set aside. There is absolutely no expenditure (except basic necessities, of course), which is more important than savings. This has always been true. In bad or deflationary times, it’s not even an option. Unless you already have a substantial nest egg, you almost invariably have to do it.
Step 4. Let time work for you. You will be absolutely amazed at how much money you can accumulate just by putting the same small, comfortable amount away month after month. And that’s even without any interest. Once you add the interest, plus the interest on the interest, you will be even more amazed.
HOW TO PROTECT YOUR JOB IN BAD TIMES
HOW TO PROTECT YOUR JOB IN BAD TIMES
The job cuts of 2002 were unusual for two reasons: (1) they took place when the economy was supposedly “recovering” and (2) they affected almost everyone in equal proportion—regardless of ethnic group, origin, gender, profession, job status,or income level. The same will probably be true in the future as well. To protect your job, follow these steps:
Step 1. Check the financial prospects of your company. If its shares are listed on a stock exchange, you can get a rating on the stock by checking with an independent rating agency. If you feel you can’t afford to spend a few dollars for the rating, you can also get a free risk rating from Risk Metrics (212-981-7475 or www.riskgrades.com).
Step 2. If your employer does not have shares listed on an exchange, ask for the latest financial statement. If your employer says it is confidential, you can acquire an independent report from Dun & Bradstreet (www.dnb.com).
Step 3. If your company has a weak risk rating or a poor report from Dun & Bradstreet, it’s not a good sign. It might do OK in good times, but your job—and possibly the entire company—may be vulnerable in bad times.
Step 4. Needless to say, to secure your income, there are two strategies you can follow:
Strategy A. Do your utmost to make yourself a valuable employee. Seek company-sponsored opportunities for learning new job skills. And even if none are available,
allocate at least an hour per day of your spare time to learn skills of value to the firm. With the Internet, you’d be amazed at how much you can learn for free or at
a very low cost. And if you do not have access to the Internet from home, free access is available at most public libraries. The librarian should be able to give you some excellent tips on the latest, best sites.
Strategy B. Do your utmost to continually stay on top of the job market. Visit www.monster.com and similar sites to take advantage of a wealth of free information on the most marketable job skills, tips on how to get a job, and updates on what’s going on in various industries. Also use these sites to keep your résumé posted on the Web as much as possible.
Step 5. Use the following guidelines to decide which strategy to pursue:
■ If the economy is strong and your company is low risk: Pursue Strategy A almost exclusively but continue to stay in touch with what’s going on in the job market. If
the economy is weak but the company seems to be low risk, pursue both strategies with equal energy.
■ If the economy is strong but the company is high risk, pursue both strategies with equal energy.
■ If the economy is weak and the risk is high, make Strategy B your first priority but do not neglect Strategy A, especially with respect to job skills. If you do change jobs, you will still need those as well. Don’t be afraid of what your employer might think or say about any job-search activities. Make it clear that you
always stay in touch with the job market no matter what,and if you have no intention of leaving, say so.
The job cuts of 2002 were unusual for two reasons: (1) they took place when the economy was supposedly “recovering” and (2) they affected almost everyone in equal proportion—regardless of ethnic group, origin, gender, profession, job status,or income level. The same will probably be true in the future as well. To protect your job, follow these steps:
Step 1. Check the financial prospects of your company. If its shares are listed on a stock exchange, you can get a rating on the stock by checking with an independent rating agency. If you feel you can’t afford to spend a few dollars for the rating, you can also get a free risk rating from Risk Metrics (212-981-7475 or www.riskgrades.com).
Step 2. If your employer does not have shares listed on an exchange, ask for the latest financial statement. If your employer says it is confidential, you can acquire an independent report from Dun & Bradstreet (www.dnb.com).
Step 3. If your company has a weak risk rating or a poor report from Dun & Bradstreet, it’s not a good sign. It might do OK in good times, but your job—and possibly the entire company—may be vulnerable in bad times.
Step 4. Needless to say, to secure your income, there are two strategies you can follow:
Strategy A. Do your utmost to make yourself a valuable employee. Seek company-sponsored opportunities for learning new job skills. And even if none are available,
allocate at least an hour per day of your spare time to learn skills of value to the firm. With the Internet, you’d be amazed at how much you can learn for free or at
a very low cost. And if you do not have access to the Internet from home, free access is available at most public libraries. The librarian should be able to give you some excellent tips on the latest, best sites.
Strategy B. Do your utmost to continually stay on top of the job market. Visit www.monster.com and similar sites to take advantage of a wealth of free information on the most marketable job skills, tips on how to get a job, and updates on what’s going on in various industries. Also use these sites to keep your résumé posted on the Web as much as possible.
Step 5. Use the following guidelines to decide which strategy to pursue:
■ If the economy is strong and your company is low risk: Pursue Strategy A almost exclusively but continue to stay in touch with what’s going on in the job market. If
the economy is weak but the company seems to be low risk, pursue both strategies with equal energy.
■ If the economy is strong but the company is high risk, pursue both strategies with equal energy.
■ If the economy is weak and the risk is high, make Strategy B your first priority but do not neglect Strategy A, especially with respect to job skills. If you do change jobs, you will still need those as well. Don’t be afraid of what your employer might think or say about any job-search activities. Make it clear that you
always stay in touch with the job market no matter what,and if you have no intention of leaving, say so.
HOW TO REDUCE DEBTS IN BAD TIMES
HOW TO REDUCE DEBTS IN BAD TIMES
Not all debt is bad. But it’s well known that debt can be a financial drug that is highly addictive. Yet banks mail tens of millions of unsolicited credit cards to American households every year, effectively putting free samples of this potential
narcotic into the hands of nearly everyone except the homeless. Mortgage companies make millions of unsolicited phone calls offering their “low-rate” mortgages. And even the Federal Reserve chairman himself, in testimony before Congress, urged Americans to spend and borrow more. The consequences are mind-boggling: The most personal bankruptcies in history. Countless divorces attributed to, or aggravated by, debt troubles. Many suicides. And that’s in relatively good times! In bad times, it’s worse. If your debt is already feeling burdensome, any loss in income that you may suffer can push you over the brink. And even if you feel your debt is currently manageable, a decline in the economy can suddenly make any debts loom far larger. Deflation (falling prices and incomes) can be especially painful: It makes all debts much harder to pay. If bad times or deflation strike your household, you may find yourself making only minimum payments on your credit card. You may notice that the balance of your checking account is running low—or running down completely—before the end of each month, and you’re drawing into savings to cover the shortfall. You could find yourself filling out applications for extra loans (more debt!) or borrowing from your retirement fund or life insurance policy. Act quickly to prevent these problems. If they are already happening, act even more quickly!If you have significant debts right now, you could be sleepwalking toward bankruptcy.Is bankruptcy an easy way out? No. It can be a lot tougher than you think. And if bankruptcy reform laws are enacted, tougher still. So if there ever was a time to eliminate your debt, this is it. Follow these steps:
Step 1: Declare your own personal war on debt. If debt has the potential to disrupt your life and cause your family serious grief, we assure you it is not your friend.
Focus your mental energy on reducing it.
Step 2: Attack your credit cards first. Get a pair of scissors. Put the scissors on your dining room table. Collect all credit cards in the household, including your own, your spouse’s, and those of anyone else for whom you’re financially responsible. Put them on the table too. Next, delight in that crisp “snip-snip-snip” sound as you cut them all in half. Enjoy the satisfaction of gathering them all together with one, clean sweeping motion of the hand. Watch with glee as they tumble neatly into the wastebasket.
Step 3: Attack your credit card statements next. Gather every last statement you have. If you don’t have all of them, don’t fret. You certainly will by the end of the
month. On the statement, find the annual percentage rate (APR). At the top of each statement, write down the APR in large numbers. Then, sort the statements with the largest APR at the top, the lowest at the bottom.
Step 4: Add up your minimum monthly payments. Let’s say it comes to $200. Isn’t it enough to just pay the minimum? No! Credit card companies deliberately require
very, very low minimum payments. Their agenda is to let you pile up as much debt as possible so they can earn as much interest as possible. How long would it take you to
pay off a credit card with minimum monthly payments alone? It’s a joke. Even with all your credit cards now in the trash, if you owe $2,000 on a 17 percent card, it could take you 24 years and cost you $979 in interest alone (on top of the $1,000 principal). So minimum payments are definitely not the way to go.
Step 5: Figure out how much you can pay over and above the total of all the minimum payments. Try to pay at least triple your minimum. So if your total is $200, that means your goal should be to squeeze at least another $600 out of your budget each month.
Step 6: Pay off the worst ones first! Use 100 percent of the extra $600 to pay off the credit card with the highest interest rate. If two or more cards have the same or
almost the same interest rate, send the extra $600 to the one that has the highest balance.
Step 7: Consider using your savings to get out of debt. The rate you’re paying is probably close to 10 times higher than the rate you’re earning! Not exactly a good deal.
Step 8: Avoid new credit cards. Period. Once you’ve kicked the credit card habit, don’t go back. If you need the convenience of a card, get a debit card. But ask your
bank to give you a true, pure debit card—not one that comes with a built-in credit card feature. If new ones come in the mail, trash them immediately.
Step 9: Start paying down any other personal loans you may have. If you’ve been able to get along with $600 less per month in spending money until now, and if your
circumstances don’t change, you should be able to stick with it. Use it to pay down any other personal loans you may have.
Step 10: Pay down your mortgage. Most people don’t realize that all you have to do is to write a larger check than normal, put it in the business reply envelope, and
send it to the mortgage company. They will automatically deduct the extra amount from your principal. So, continuing with the earlier example, if your regular mortgage payment is $1,000, write the mortgage company a check for $1,600 every month. You’d be surprised how much more quickly your mortgage will be paid off.
Not all debt is bad. But it’s well known that debt can be a financial drug that is highly addictive. Yet banks mail tens of millions of unsolicited credit cards to American households every year, effectively putting free samples of this potential
narcotic into the hands of nearly everyone except the homeless. Mortgage companies make millions of unsolicited phone calls offering their “low-rate” mortgages. And even the Federal Reserve chairman himself, in testimony before Congress, urged Americans to spend and borrow more. The consequences are mind-boggling: The most personal bankruptcies in history. Countless divorces attributed to, or aggravated by, debt troubles. Many suicides. And that’s in relatively good times! In bad times, it’s worse. If your debt is already feeling burdensome, any loss in income that you may suffer can push you over the brink. And even if you feel your debt is currently manageable, a decline in the economy can suddenly make any debts loom far larger. Deflation (falling prices and incomes) can be especially painful: It makes all debts much harder to pay. If bad times or deflation strike your household, you may find yourself making only minimum payments on your credit card. You may notice that the balance of your checking account is running low—or running down completely—before the end of each month, and you’re drawing into savings to cover the shortfall. You could find yourself filling out applications for extra loans (more debt!) or borrowing from your retirement fund or life insurance policy. Act quickly to prevent these problems. If they are already happening, act even more quickly!If you have significant debts right now, you could be sleepwalking toward bankruptcy.Is bankruptcy an easy way out? No. It can be a lot tougher than you think. And if bankruptcy reform laws are enacted, tougher still. So if there ever was a time to eliminate your debt, this is it. Follow these steps:
Step 1: Declare your own personal war on debt. If debt has the potential to disrupt your life and cause your family serious grief, we assure you it is not your friend.
Focus your mental energy on reducing it.
Step 2: Attack your credit cards first. Get a pair of scissors. Put the scissors on your dining room table. Collect all credit cards in the household, including your own, your spouse’s, and those of anyone else for whom you’re financially responsible. Put them on the table too. Next, delight in that crisp “snip-snip-snip” sound as you cut them all in half. Enjoy the satisfaction of gathering them all together with one, clean sweeping motion of the hand. Watch with glee as they tumble neatly into the wastebasket.
Step 3: Attack your credit card statements next. Gather every last statement you have. If you don’t have all of them, don’t fret. You certainly will by the end of the
month. On the statement, find the annual percentage rate (APR). At the top of each statement, write down the APR in large numbers. Then, sort the statements with the largest APR at the top, the lowest at the bottom.
Step 4: Add up your minimum monthly payments. Let’s say it comes to $200. Isn’t it enough to just pay the minimum? No! Credit card companies deliberately require
very, very low minimum payments. Their agenda is to let you pile up as much debt as possible so they can earn as much interest as possible. How long would it take you to
pay off a credit card with minimum monthly payments alone? It’s a joke. Even with all your credit cards now in the trash, if you owe $2,000 on a 17 percent card, it could take you 24 years and cost you $979 in interest alone (on top of the $1,000 principal). So minimum payments are definitely not the way to go.
Step 5: Figure out how much you can pay over and above the total of all the minimum payments. Try to pay at least triple your minimum. So if your total is $200, that means your goal should be to squeeze at least another $600 out of your budget each month.
Step 6: Pay off the worst ones first! Use 100 percent of the extra $600 to pay off the credit card with the highest interest rate. If two or more cards have the same or
almost the same interest rate, send the extra $600 to the one that has the highest balance.
Step 7: Consider using your savings to get out of debt. The rate you’re paying is probably close to 10 times higher than the rate you’re earning! Not exactly a good deal.
Step 8: Avoid new credit cards. Period. Once you’ve kicked the credit card habit, don’t go back. If you need the convenience of a card, get a debit card. But ask your
bank to give you a true, pure debit card—not one that comes with a built-in credit card feature. If new ones come in the mail, trash them immediately.
Step 9: Start paying down any other personal loans you may have. If you’ve been able to get along with $600 less per month in spending money until now, and if your
circumstances don’t change, you should be able to stick with it. Use it to pay down any other personal loans you may have.
Step 10: Pay down your mortgage. Most people don’t realize that all you have to do is to write a larger check than normal, put it in the business reply envelope, and
send it to the mortgage company. They will automatically deduct the extra amount from your principal. So, continuing with the earlier example, if your regular mortgage payment is $1,000, write the mortgage company a check for $1,600 every month. You’d be surprised how much more quickly your mortgage will be paid off.
Monday, December 15, 2008
9 Predictions For '09 In The Markets
Predictions: 9 For '09 In The Markets
Posted By:Patti Domm
Last year at this time, we happily said goodbye to 2007 with a naive hopefulness that 2008 would be better. The credit crisis would end, the economy would show its resilience, and stocks, well stocks, were supposed to go up. Instead, the credit crunch worsened, the government rescued (or didn't rescue) a series of financial institutions and stocks hit an 11-year low.
So much for year-end prognostications. It only makes sense to turn up the gloom factor on 2009 predictions, and hope for the best.
1. Manic Markets
Volatility in the stock market continues to be the norm as the New Year starts. But stocks could slip into a protracted, quiet period before ultimately moving slightly higher later in the year. Credit markets begin to heal but not before more market calamity and dislocations.
2. 'R' Word
Last year, nobody wanted to say it but it's now clear, the economy could be in full-blown recession for most of the year. Third quarter will hopefully be a turning point.
3. Jobs
Unemployment numbers get pretty bad. Look for a high of close to 10 percent by the end of the year, or greater depending on how the next fiscal stimulus package is dispersed.
4. Financial Institutions
More fail, more merge, and the government has a new group it helps in the first quarter. But by year end, look for some institutions try to shake loose their new government shareholder. Other will have the government riding along for a long time to come.
5. Housing
It's the starting point and end of the financial meltdown and unfortunately, it doesn't get better any time soon. By year end, it may start to seem like there's a faint light at the end of the tunnel, not a train. The first part of the year could be just ugly.
6. Washington
The government continues to find creative ways to jump into the inner workings of the financial markets and to save companies from themselves. By the spring, everyone agrees it's now a bad idea and there's been enough interference. In the first quarter, the government's role as shareholder starts to take shape, and we see just how much meddling regulators will do with the companies they oversee.
7. Foreign Affairs
Economic recovery and the functioning of the international banking system are dependant on the cooperation of world leaders and central banks. So far, there's been an unprecedented, far reaching level of cooperation. The challenge in 2009 will be how these forced allegiances perform under pressure. But because each country knows its survival depends on the whole planet thriving, they continue to work on a global solution.
8. Currency
The dollar holds its gains against the euro and other currencies. Risk aversion fades, pushing the yen higher.
9. Uncharted Territory
We hear that about a million and a half times when those who give out advice and make forecasts tell us they could not have predicted what the markets and economy would do next.
Posted By:Patti Domm
Last year at this time, we happily said goodbye to 2007 with a naive hopefulness that 2008 would be better. The credit crisis would end, the economy would show its resilience, and stocks, well stocks, were supposed to go up. Instead, the credit crunch worsened, the government rescued (or didn't rescue) a series of financial institutions and stocks hit an 11-year low.
So much for year-end prognostications. It only makes sense to turn up the gloom factor on 2009 predictions, and hope for the best.
1. Manic Markets
Volatility in the stock market continues to be the norm as the New Year starts. But stocks could slip into a protracted, quiet period before ultimately moving slightly higher later in the year. Credit markets begin to heal but not before more market calamity and dislocations.
2. 'R' Word
Last year, nobody wanted to say it but it's now clear, the economy could be in full-blown recession for most of the year. Third quarter will hopefully be a turning point.
3. Jobs
Unemployment numbers get pretty bad. Look for a high of close to 10 percent by the end of the year, or greater depending on how the next fiscal stimulus package is dispersed.
4. Financial Institutions
More fail, more merge, and the government has a new group it helps in the first quarter. But by year end, look for some institutions try to shake loose their new government shareholder. Other will have the government riding along for a long time to come.
5. Housing
It's the starting point and end of the financial meltdown and unfortunately, it doesn't get better any time soon. By year end, it may start to seem like there's a faint light at the end of the tunnel, not a train. The first part of the year could be just ugly.
6. Washington
The government continues to find creative ways to jump into the inner workings of the financial markets and to save companies from themselves. By the spring, everyone agrees it's now a bad idea and there's been enough interference. In the first quarter, the government's role as shareholder starts to take shape, and we see just how much meddling regulators will do with the companies they oversee.
7. Foreign Affairs
Economic recovery and the functioning of the international banking system are dependant on the cooperation of world leaders and central banks. So far, there's been an unprecedented, far reaching level of cooperation. The challenge in 2009 will be how these forced allegiances perform under pressure. But because each country knows its survival depends on the whole planet thriving, they continue to work on a global solution.
8. Currency
The dollar holds its gains against the euro and other currencies. Risk aversion fades, pushing the yen higher.
9. Uncharted Territory
We hear that about a million and a half times when those who give out advice and make forecasts tell us they could not have predicted what the markets and economy would do next.
Tuesday, December 9, 2008
Why Buffett's Buying Today
In the midst of economic chaos, Warren Buffett recently made a bold prediction. He said that now is the time to buy American stocks.
Of course, this call seems utterly insane. Banks are failing, the credit markets are deadlocked, unemployment is skyrocketing, and there's likely to be terrible news for months.
On the other hand, this is Warren Buffett, and he's made these sorts of predictions before.
1974: Stagflation
The years 1973 and 1974 were two very bad ones for the market. OPEC had started flexing its muscles, causing oil to quadruple. This resulted in a long recession, with inflation spiking to 12.3% in 1974, while real GDP growth fell by 0.5%. America experienced stagflation -- the ugly combination of a recession and high inflation rates -- and people were terrified. The situation was even worse in the United Kingdom, where the government was bailing out banks after real estate crashed. Over those two years, the S&P 500 plunged by 42%.
It was then, on Nov. 1, 1974, at the height of the pessimism, that Buffett made his first well-publicized bullish market call. He noted that he was well aware that the world was in a mess, but that stocks were simply too cheap. "If you're only worried about corporate profits, panic or depression, these things don't bother me at these prices."
To be totally clear, Buffett made one of the most direct predictions of his entire career: "Now is the time to invest and get rich." Buffett himself was buying shares of The Washington Post (NYSE: WPO) and advertising agency Interpublic (NYSE: IPG).
It worked out pretty well for him. The market jumped 32% in 1975, and another 19% the next year. Even today, the Dow Jones Industrial Average's 38% gain in 1975 stands up as its biggest increase since 1955.
1979: An oil crisis
That excellent performance was followed by two poor years. Once again, we were experiencing double-digit inflation and falling GDP growth. Again, we were going through an oil crisis, this one coming in the wake of the Iranian Revolution. As a result, when Buffett made his next call on Aug. 6, 1979, the Dow Jones Average was actually trading lower than it was at the end of 1975.
This time, Buffett noted that stocks were far more attractive than bonds. He believed that pension managers, who were piling into bonds yielding 9.5%, were investing using the rearview mirror. They were avoiding the equities that had recently lost them money. But Buffett recognized that the underlying businesses were actually performing well. A combination of falling stock prices and improving business fundamentals made stocks an attractive investment.
Buffett figured that stocks were probably offering long-term returns of 13% or better. He bought oil producer Hess (NYSE: HES), GEICO, and General Foods, which later became part of Kraft (NYSE: KFT).
This time, Buffett's timing wasn't perfect -- the S&P 500 fell a bit more over the next few months. But his long-term prediction was spot-on. During the 1980s, the S&P 500 rose 13% annually before dividends.
1999: The Internet bubble
In November 1999, during the height of the Internet bubble, Buffett made his only bearish call. At the time, the market was in a speculative fervor, with Internet stocks showing huge price increases seemingly every day. In the five years between 1995 and 1999, the S&P 500 tripled, with compound annual returns of 26%. Many considered Buffett a relic for refusing to buy into the technology boom.
Buffett, however, noted that, because of a combination of cheap initial valuations and falling interest rates, stocks had achieved unprecedented annual returns of 19% over a 17-year period. These results made investors unreasonably optimistic. New investors were expecting 10-year annual returns of 22.6%, while even experienced investors predicted 12.9%. But the huge boom was only supported by modest GDP growth, and therefore wasn't sustainable. So, Buffett expected about 4% real returns.
He continued to hold Coca-Cola (NYSE: KO), Wells Fargo (NYSE: WFC), and M&T Bank (NYSE: MTB), though he noted in the 2004 annual report that he should have sold some of Berkshire Hathaway's overvalued holdings.
Buffett's bearish prediction proved optimistic. The market continued to rise for a few months, with the S&P 500 topping out 9% above where it was when Buffett made the call. But that was followed by a crash. Since his call, the S&P 500 has dropped by 39%, for average annual losses of about 5%, well below Buffett's estimates.
The Foolish bottom line
The common theme of all these predictions is that Buffett didn't care about short-term fears. He wasn't worried about stagflation in the 1970s, and he didn't buy into the unrealistic optimism of the late 1990s. Instead, he rationally valued stocks, and made the right long-term calls. His biggest mistake was the 4% number he threw out in 1999 -- long-term returns have been much worse than his bearish prediction.
But that prediction was too optimistic partly because stocks are so unreasonably cheap right now. And that's why Buffett's buying today.
Of course, this call seems utterly insane. Banks are failing, the credit markets are deadlocked, unemployment is skyrocketing, and there's likely to be terrible news for months.
On the other hand, this is Warren Buffett, and he's made these sorts of predictions before.
1974: Stagflation
The years 1973 and 1974 were two very bad ones for the market. OPEC had started flexing its muscles, causing oil to quadruple. This resulted in a long recession, with inflation spiking to 12.3% in 1974, while real GDP growth fell by 0.5%. America experienced stagflation -- the ugly combination of a recession and high inflation rates -- and people were terrified. The situation was even worse in the United Kingdom, where the government was bailing out banks after real estate crashed. Over those two years, the S&P 500 plunged by 42%.
It was then, on Nov. 1, 1974, at the height of the pessimism, that Buffett made his first well-publicized bullish market call. He noted that he was well aware that the world was in a mess, but that stocks were simply too cheap. "If you're only worried about corporate profits, panic or depression, these things don't bother me at these prices."
To be totally clear, Buffett made one of the most direct predictions of his entire career: "Now is the time to invest and get rich." Buffett himself was buying shares of The Washington Post (NYSE: WPO) and advertising agency Interpublic (NYSE: IPG).
It worked out pretty well for him. The market jumped 32% in 1975, and another 19% the next year. Even today, the Dow Jones Industrial Average's 38% gain in 1975 stands up as its biggest increase since 1955.
1979: An oil crisis
That excellent performance was followed by two poor years. Once again, we were experiencing double-digit inflation and falling GDP growth. Again, we were going through an oil crisis, this one coming in the wake of the Iranian Revolution. As a result, when Buffett made his next call on Aug. 6, 1979, the Dow Jones Average was actually trading lower than it was at the end of 1975.
This time, Buffett noted that stocks were far more attractive than bonds. He believed that pension managers, who were piling into bonds yielding 9.5%, were investing using the rearview mirror. They were avoiding the equities that had recently lost them money. But Buffett recognized that the underlying businesses were actually performing well. A combination of falling stock prices and improving business fundamentals made stocks an attractive investment.
Buffett figured that stocks were probably offering long-term returns of 13% or better. He bought oil producer Hess (NYSE: HES), GEICO, and General Foods, which later became part of Kraft (NYSE: KFT).
This time, Buffett's timing wasn't perfect -- the S&P 500 fell a bit more over the next few months. But his long-term prediction was spot-on. During the 1980s, the S&P 500 rose 13% annually before dividends.
1999: The Internet bubble
In November 1999, during the height of the Internet bubble, Buffett made his only bearish call. At the time, the market was in a speculative fervor, with Internet stocks showing huge price increases seemingly every day. In the five years between 1995 and 1999, the S&P 500 tripled, with compound annual returns of 26%. Many considered Buffett a relic for refusing to buy into the technology boom.
Buffett, however, noted that, because of a combination of cheap initial valuations and falling interest rates, stocks had achieved unprecedented annual returns of 19% over a 17-year period. These results made investors unreasonably optimistic. New investors were expecting 10-year annual returns of 22.6%, while even experienced investors predicted 12.9%. But the huge boom was only supported by modest GDP growth, and therefore wasn't sustainable. So, Buffett expected about 4% real returns.
He continued to hold Coca-Cola (NYSE: KO), Wells Fargo (NYSE: WFC), and M&T Bank (NYSE: MTB), though he noted in the 2004 annual report that he should have sold some of Berkshire Hathaway's overvalued holdings.
Buffett's bearish prediction proved optimistic. The market continued to rise for a few months, with the S&P 500 topping out 9% above where it was when Buffett made the call. But that was followed by a crash. Since his call, the S&P 500 has dropped by 39%, for average annual losses of about 5%, well below Buffett's estimates.
The Foolish bottom line
The common theme of all these predictions is that Buffett didn't care about short-term fears. He wasn't worried about stagflation in the 1970s, and he didn't buy into the unrealistic optimism of the late 1990s. Instead, he rationally valued stocks, and made the right long-term calls. His biggest mistake was the 4% number he threw out in 1999 -- long-term returns have been much worse than his bearish prediction.
But that prediction was too optimistic partly because stocks are so unreasonably cheap right now. And that's why Buffett's buying today.
Saturday, December 6, 2008
7 product that are getting cheaper
Your financial ship is taking on water from all sides: a plunging stock market, alarming spikes in food costs and a home value that's headed in the wrong direction. Now, Congress is enlisting your help to bail out Wall Street as well.
Ready for some good news?
Preposterous though it may seem, we have identified seven islands of relief in this dark sea of economic uncertainty.
That's right -- seven categories of consumer goods and services in which prices have actually declined over the past decade.
The good news comes from the Bureau of Labor Statistics' Consumer Price Index, or CPI. The Federal Trade Commission coordinates with the Bureau of Labor Statistics, or BLS, to make sure the CPI reflects an apples-to-apples value comparison before adjusting for inflation.
An improvement in the quality of a product over time is an important factor in this calculation.
"When they examine, they try to correct for differences in the quality of products," says Tom Kelly, who used to work for the FTC and is now director of the Center for Business and Economic Research at Baylor University in Waco, Texas.
"So when you make comparisons, you're comparing two similar-quality products. If the price remains the same and the quality goes up, that effectively reduces the price."
Following are seven categories of goods and services that are comparatively cheaper today than they were 10 years ago. All figures are based on a BLS comparison of like products and services from August 1998 and August 2008.
Items That Have Grown Cheaper
1. Phone bargains: Can you hear me now?
Motormouths rejoice: The price of wireless telephone services dropped 31.6 percent during the past decade, while the price of long-distance telephone calls fell 23.1 percent.
Why the cell phone bargains?
"Cellular telephone service was a relatively new item 10 years ago," says Dan Ginsburg, BLS supervisory economist for the CPI services section. "Usually, items that come in with new technology start off higher priced, but as sophistication in delivering the service becomes greater and competing companies develop more high-tech solutions, the costs keep coming down. Competition helps keep the prices low."
You can thank competition for the long-distance savings, too.
Ginsburg credits the 1983 deregulation of telephone services that resulted in the "Baby Bells" for reducing the cost of long-distance calls.
"As competition crept into the market, it became much less expensive with newer technology to make long-distance calls, so the prices just came way down," he says. "Suddenly, the Sprints and MCIs and other companies were eligible for long-distance service. It worked the way they thought it would."
2. Electronics: Applause, applause
It's hardly news that the prices of personal electronics have dropped to what would have been garage-sale prices a decade ago. This is true of televisions (down 77.9 percent); computers (down 88.3 percent); audio equipment (down 39.3 percent); and videocassettes, video discs and other media, including rentals (down 20.4 percent).
"Televisions and audio equipment have benefited from technological change," Ginsburg says. "It became much less expensive to manufacture TV sets. With the advent of high-definition TV in more recent years, older televisions that couldn't capture high-definition TV became less valuable and the prices dropped, even though they were still being manufactured."
Increased competition and cheaper labor costs associated with overseas outsourcing played a big role in price declines. These factors, combined with new technology, helped lower the prices of other recreational electronics, including photography (down 19.3 percent) and musical instruments (down 4.1 percent).
"The switch from conventional film to electronic capturing of pictures, moving into an electronic rather than a chemical-based methodology, apparently had big savings," Ginsburg says.
What about those bargain-basement Fender Stratocasters?
"That's been affected a lot by competition," Kelly says. "Particularly, you're getting more standardized products like guitars, which are made in China and other countries."
3. Footwear: These boots were made for savings
The recent "Sex and the City" movie would have us think that every woman's closet is stuffed to overflowing with Manolo Blahnik and Jimmy Choo shoes.
Not so, says BLS apparel economist Nicole Shepler.
"I don't have any hard-and-fast data on that, but that is a very small part of what we price overall," she says. "So, I think that doesn't have much of an impact."
In fact, shoe prices have declined by 3.9 percent, thanks in large part to lower-cost foreign imports and the growth of discount outlets and big-box stores.
"You still have $200 Nikes," Shepler admits. "But I would hypothesize that that may be one of the reasons why footwear has not declined as much as some of the other clothing areas."
4. New vehicles: More features, fewer buyers
Kelly isn't afraid to state the obvious: "People are not buying cars."
Reduced demand tends to lower prices, as witnessed by the 6.6 percent drop in the price of new cars and trucks over the past decade.
Ginsburg says the automotive industry has tried to hedge consumer disinterest by using less expensive materials and boosting the features: cup holders, seat warmers, DVD players, backup cameras and the like.
Because the Consumer Price Index takes functionality into consideration, the CPI's decline in the price of new cars and trucks may in part reflect that increase in features and options.
"Motor vehicles are a relatively mature industry," Ginsburg says. "As technology improvements are brought out, we usually quality-adjust for those because they have certain value for the consumer.
"If you look at the actual price-page of the vehicle today versus 10 years ago, today's Chevy Impala is probably quite a bit more expensive but it also has quite a bit more safety features and enhancements that are deemed desirable by motorists. If you remove those quality aspects, the price difference falls quite a bit."
5. Toys: Not all fun and games
The good news for parents is that the price of toys has declined 44.4 percent over the past decade.
The bad news? In some cases, quality may have been sacrificed for profit, as witnessed by recent lead-based toy scandals.
"Most of your toys have been outsourced to other countries where labor costs are lower," Kelly says.
On the bright side, Ginsburg says the declining cost of electronics has helped drive down the price of playthings.
"Toys, games, hobbies and playground equipment are down," Ginsburg says. "I would think that's due to outsourcing and moving toward electronic devices that have become very inexpensive to produce."
6. Apparel: Dress for less
We may be struggling to fill the gas tank or feed the family, but we can take some solace in the fact that the cost to clothe the family has dropped 11 percent during the past decade.
Shepler theorizes that as a society, we have shifted our measure of fashion away from clothing and toward more ostentatious displays of bling, such as plasma TVs and iPhones.
"In a sense, electronics has replaced clothing as the fashionable item," she says. "It's about having the latest iPod or toy instead of apparel as reflecting status.
"The demand for clothing has certainly fallen as more and more shoppers are looking to electronics as being the fashionable item."
Lower-cost foreign imports and volume buying by discount and big-box stores have helped lower price tags. This is particularly true for the cost of boys and girls clothing, which has dropped 23.3 percent and 18.6 percent in 10 years, respectively.
"Children's apparel certainly declined a bit more, likely due to more shoppers going to discounters," Shepler says. "Outlet and big-box stores didn't exist to this extent 10 years ago."
But Ginsburg warns that the quality of those garments may not measure up.
"The length of life of a garment may be a quality factor, but it's not measurable without being able to have someone wear the garment for six months, then wear an American-made equivalent for six months and see the differences between how they wear," he says.
7. Watches: Time to save big
You may not be able to buy time as easily in a slowing economy, but you certainly can tell time for less. The cost of a timepiece fell 6.2 percent in the last decade.
Shepler says for every Rolex, there are hundreds of thousands of Timex watches that account for the Consumer Price Index figure.
"Watches are an item where you do get a little bit of the high-end goods but it's more going to focus on what shoppers are actually buying, which is going to be more of the less-expensive items, and those are going to be bought more at discounters," she says.
In fact, the price of watches, especially with the widespread adoption of digital inner workings, has declined to such a degree that many of us consider them disposable.
"Rolexes haven't really caught on with everybody; they're still buying the throwaway watches -- planned obsolescence," she says. "We would have some of those higher-end watches, but it's certainly not going to make up the bulk of our sample."
The Downside
Kelly says these seven relative bargains may actually exceed their CPI-estimated savings due to the recent bumpy ride of the U.S. dollar.
"If you look at the dollar, for a long time it was falling fairly rapidly, causing some of these prices to hold up a little," he says. "Now, the dollar is stabilizing in terms of its rate of decreasing. If the dollar goes up in value, it makes foreign-made goods cheaper; in other words, it lowers the price of foreign currency so importers can buy those items cheaper."
However, there's a downside to falling prices as well, Kelly says.
"When prices are falling, people will postpone buying," he says. "So you don't necessarily want deflation; you want disinflation.
"If you start having prices going down -- as in the housing market right now where housing prices are collapsing -- people say, 'Why should I buy a house now? It's obviously a buyer's market, I'll just wait a few more months and get something even better.'"
Such prudence will likely characterize consumer behavior as the economy slows, world markets struggle to stabilize and the effects of the Wall Street bailout on Main Street become clearer, Kelly says.
"You'll find that even more of those people who have money to spend are going to sit back and wait on the big-ticket items," he says. "Those are durable items that they've already got in hand but maybe don't have the latest high-def, 52-inch version of.
They're going to live with the one they have for six more months to get something better."
Copyrighted, Bankrate.com. All rights reserved.
Taken From finance.yahoo.com
Ready for some good news?
Preposterous though it may seem, we have identified seven islands of relief in this dark sea of economic uncertainty.
That's right -- seven categories of consumer goods and services in which prices have actually declined over the past decade.
The good news comes from the Bureau of Labor Statistics' Consumer Price Index, or CPI. The Federal Trade Commission coordinates with the Bureau of Labor Statistics, or BLS, to make sure the CPI reflects an apples-to-apples value comparison before adjusting for inflation.
An improvement in the quality of a product over time is an important factor in this calculation.
"When they examine, they try to correct for differences in the quality of products," says Tom Kelly, who used to work for the FTC and is now director of the Center for Business and Economic Research at Baylor University in Waco, Texas.
"So when you make comparisons, you're comparing two similar-quality products. If the price remains the same and the quality goes up, that effectively reduces the price."
Following are seven categories of goods and services that are comparatively cheaper today than they were 10 years ago. All figures are based on a BLS comparison of like products and services from August 1998 and August 2008.
Items That Have Grown Cheaper
1. Phone bargains: Can you hear me now?
Motormouths rejoice: The price of wireless telephone services dropped 31.6 percent during the past decade, while the price of long-distance telephone calls fell 23.1 percent.
Why the cell phone bargains?
"Cellular telephone service was a relatively new item 10 years ago," says Dan Ginsburg, BLS supervisory economist for the CPI services section. "Usually, items that come in with new technology start off higher priced, but as sophistication in delivering the service becomes greater and competing companies develop more high-tech solutions, the costs keep coming down. Competition helps keep the prices low."
You can thank competition for the long-distance savings, too.
Ginsburg credits the 1983 deregulation of telephone services that resulted in the "Baby Bells" for reducing the cost of long-distance calls.
"As competition crept into the market, it became much less expensive with newer technology to make long-distance calls, so the prices just came way down," he says. "Suddenly, the Sprints and MCIs and other companies were eligible for long-distance service. It worked the way they thought it would."
2. Electronics: Applause, applause
It's hardly news that the prices of personal electronics have dropped to what would have been garage-sale prices a decade ago. This is true of televisions (down 77.9 percent); computers (down 88.3 percent); audio equipment (down 39.3 percent); and videocassettes, video discs and other media, including rentals (down 20.4 percent).
"Televisions and audio equipment have benefited from technological change," Ginsburg says. "It became much less expensive to manufacture TV sets. With the advent of high-definition TV in more recent years, older televisions that couldn't capture high-definition TV became less valuable and the prices dropped, even though they were still being manufactured."
Increased competition and cheaper labor costs associated with overseas outsourcing played a big role in price declines. These factors, combined with new technology, helped lower the prices of other recreational electronics, including photography (down 19.3 percent) and musical instruments (down 4.1 percent).
"The switch from conventional film to electronic capturing of pictures, moving into an electronic rather than a chemical-based methodology, apparently had big savings," Ginsburg says.
What about those bargain-basement Fender Stratocasters?
"That's been affected a lot by competition," Kelly says. "Particularly, you're getting more standardized products like guitars, which are made in China and other countries."
3. Footwear: These boots were made for savings
The recent "Sex and the City" movie would have us think that every woman's closet is stuffed to overflowing with Manolo Blahnik and Jimmy Choo shoes.
Not so, says BLS apparel economist Nicole Shepler.
"I don't have any hard-and-fast data on that, but that is a very small part of what we price overall," she says. "So, I think that doesn't have much of an impact."
In fact, shoe prices have declined by 3.9 percent, thanks in large part to lower-cost foreign imports and the growth of discount outlets and big-box stores.
"You still have $200 Nikes," Shepler admits. "But I would hypothesize that that may be one of the reasons why footwear has not declined as much as some of the other clothing areas."
4. New vehicles: More features, fewer buyers
Kelly isn't afraid to state the obvious: "People are not buying cars."
Reduced demand tends to lower prices, as witnessed by the 6.6 percent drop in the price of new cars and trucks over the past decade.
Ginsburg says the automotive industry has tried to hedge consumer disinterest by using less expensive materials and boosting the features: cup holders, seat warmers, DVD players, backup cameras and the like.
Because the Consumer Price Index takes functionality into consideration, the CPI's decline in the price of new cars and trucks may in part reflect that increase in features and options.
"Motor vehicles are a relatively mature industry," Ginsburg says. "As technology improvements are brought out, we usually quality-adjust for those because they have certain value for the consumer.
"If you look at the actual price-page of the vehicle today versus 10 years ago, today's Chevy Impala is probably quite a bit more expensive but it also has quite a bit more safety features and enhancements that are deemed desirable by motorists. If you remove those quality aspects, the price difference falls quite a bit."
5. Toys: Not all fun and games
The good news for parents is that the price of toys has declined 44.4 percent over the past decade.
The bad news? In some cases, quality may have been sacrificed for profit, as witnessed by recent lead-based toy scandals.
"Most of your toys have been outsourced to other countries where labor costs are lower," Kelly says.
On the bright side, Ginsburg says the declining cost of electronics has helped drive down the price of playthings.
"Toys, games, hobbies and playground equipment are down," Ginsburg says. "I would think that's due to outsourcing and moving toward electronic devices that have become very inexpensive to produce."
6. Apparel: Dress for less
We may be struggling to fill the gas tank or feed the family, but we can take some solace in the fact that the cost to clothe the family has dropped 11 percent during the past decade.
Shepler theorizes that as a society, we have shifted our measure of fashion away from clothing and toward more ostentatious displays of bling, such as plasma TVs and iPhones.
"In a sense, electronics has replaced clothing as the fashionable item," she says. "It's about having the latest iPod or toy instead of apparel as reflecting status.
"The demand for clothing has certainly fallen as more and more shoppers are looking to electronics as being the fashionable item."
Lower-cost foreign imports and volume buying by discount and big-box stores have helped lower price tags. This is particularly true for the cost of boys and girls clothing, which has dropped 23.3 percent and 18.6 percent in 10 years, respectively.
"Children's apparel certainly declined a bit more, likely due to more shoppers going to discounters," Shepler says. "Outlet and big-box stores didn't exist to this extent 10 years ago."
But Ginsburg warns that the quality of those garments may not measure up.
"The length of life of a garment may be a quality factor, but it's not measurable without being able to have someone wear the garment for six months, then wear an American-made equivalent for six months and see the differences between how they wear," he says.
7. Watches: Time to save big
You may not be able to buy time as easily in a slowing economy, but you certainly can tell time for less. The cost of a timepiece fell 6.2 percent in the last decade.
Shepler says for every Rolex, there are hundreds of thousands of Timex watches that account for the Consumer Price Index figure.
"Watches are an item where you do get a little bit of the high-end goods but it's more going to focus on what shoppers are actually buying, which is going to be more of the less-expensive items, and those are going to be bought more at discounters," she says.
In fact, the price of watches, especially with the widespread adoption of digital inner workings, has declined to such a degree that many of us consider them disposable.
"Rolexes haven't really caught on with everybody; they're still buying the throwaway watches -- planned obsolescence," she says. "We would have some of those higher-end watches, but it's certainly not going to make up the bulk of our sample."
The Downside
Kelly says these seven relative bargains may actually exceed their CPI-estimated savings due to the recent bumpy ride of the U.S. dollar.
"If you look at the dollar, for a long time it was falling fairly rapidly, causing some of these prices to hold up a little," he says. "Now, the dollar is stabilizing in terms of its rate of decreasing. If the dollar goes up in value, it makes foreign-made goods cheaper; in other words, it lowers the price of foreign currency so importers can buy those items cheaper."
However, there's a downside to falling prices as well, Kelly says.
"When prices are falling, people will postpone buying," he says. "So you don't necessarily want deflation; you want disinflation.
"If you start having prices going down -- as in the housing market right now where housing prices are collapsing -- people say, 'Why should I buy a house now? It's obviously a buyer's market, I'll just wait a few more months and get something even better.'"
Such prudence will likely characterize consumer behavior as the economy slows, world markets struggle to stabilize and the effects of the Wall Street bailout on Main Street become clearer, Kelly says.
"You'll find that even more of those people who have money to spend are going to sit back and wait on the big-ticket items," he says. "Those are durable items that they've already got in hand but maybe don't have the latest high-def, 52-inch version of.
They're going to live with the one they have for six more months to get something better."
Copyrighted, Bankrate.com. All rights reserved.
Taken From finance.yahoo.com
Friday, December 5, 2008
Recession
What causes a recession?
According to the National Bureau of Economic Research (NBER), recession is defined as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production and wholesale-retail sales". More specifically, recession is defined as when businesses cease to expand, the GDP diminishes for two consecutive quarters, the rate of unemployment rises and housing prices decline.
Many factors contribute to an economy's fall into a recession, but the major cause is inflation. Inflation refers to a general rise in the prices of goods and services over a period of time. The higher the rate of inflation, the smaller the percentage of goods and services that can be purchased with the same amount of money. Inflation can happen for reasons as varied as increased production costs, higher energy costs and national debt. (For more on this topic, see All About Inflation.)
In an inflationary environment, people tend to cut out leisure spending, reduce overall spending and begin to save more. But as individuals and businesses curtail expenditures in an effort to trim costs, this causes GDP to decline. Unemployment rates rise because companies lay off workers to cut costs. It is these combined factors that cause the economy to fall into a recession
Recession: What Does It Mean To Investors?
When the economy heads into a tailspin, you may hear news reports of dropping housing starts, increased jobless claims and shrinking economic output. How does this affect us as investors? What do house building and shrinking output have to do with your portfolio? As you'll discover, these indicators are part of a larger picture, which determines the strength of the economy and whether we are in a period of recession or expansion.
The Phases of the Business Cycle
In order to determine the current state of the economy, we first need to take a good look at the business cycle as a whole. Generally, the business cycle is made up of four different periods of activity extended over several years. These phases can differ substantially in duration, but are all closely intertwined in the overall economy.
Peak - This is not the beginning of the business cycle, but this is where we'll start. At its peak, the economy is running at full steam. Employment is at or near maximum levels, gross domestic product (GDP) output is at its upper limit (implying that there is very little waste occurring) and income levels are increasing. In this period, prices tend to increase due to inflation; however, most businesses and investors are having an enjoyable and prosperous time.
Recession - The old adage "what goes up must come down" applies perfectly here. After experiencing a great deal of growth and success, income and employment begin to decline. As our wages and the prices of goods in the economy are inflexible to change, they will most likely remain near the same level as in the peak period unless the recession is prolonged. The result of these factors is negative growth in the economy.
Trough - Also sometimes referred to as a depression, depending upon the duration of the trough, this is the section of the business cycle when output and employment bottom out and remain in waiting for the next phase of the cycle to begin.
Expansion/Recovery - In a recovery, the economy is growing once again and moving away from the bottoms experienced at the trough. Employment, production and income all undergo a period of growth and the overall economic climate is good.
Recession and recovery are the areas of the business cycle that are more important to investors because they tell us the direction of the economy.
To further complicate matters, not all business cycles go through these four steps sequentially. For instance, during a double dip recession, the economy goes through a recession followed by a short recovery and another recession without ever peaking.
Recession Versus Expansion
Recession is loosely defined as two consecutive quarters of decline in GDP output. This definition can lead to situations where there are frequent switches between a recession and expansion and, as such, many different variations of this principle have been used in the hope of creating a universal method for calculation.
The National Bureau of Economic Research (NBER) is an organization that is seen as having the final word in determining whether the United States is in recession. It has a more extensive definition of recession, which deems the following four main factors as the most important for determining the state of the economy:
Employment
Personal income
Sales volume in manufacturing and retail sectors
Industrial production>
By looking at these four indicators, economists at the NBER hope to gauge the overall health of the market and decide whether the economy is in recession or expansion.
The tricky part about trying to determine the state of the economy is that most indicators are either lagging or coincidental rather than leading. When an indicator is "lagging" it means that the indicator changes only after the fact. That is, a lagging indicator can confirm that an economy is in recession, but it doesn't help much in predicting what will happen in the future. (Learn more about this in Economic Indicators To Know.)
What Does this Mean for Investors?
Understanding the business cycle doesn't matter much unless it improves portfolio returns. What's an investor to do during recession? Unfortunately, there is no easy answer. It really depends on your situation and what type of investor you are. (For some ideas, see Recession-Proof Your Portfolio.)
First, remember that a bear market does not mean there are no ways to make money. Some investors take advantage of falling markets by short selling stocks. Essentially, an investor who sells short profits when a stock declines in value. Problem is, this technique has many unique pitfalls and should be used only by more experienced investors. (If you want to learn more, see the tutorial Short Selling.)
Another breed of investor uses recession much like a sale at the local department store. Referred to as value investing, this technique involves looking at a fallen stock not as a failure, but as a bargain waiting to be scooped up. Knowing that better times will eventually return in the economy, value investors use bear markets as buying sprees, picking up high-quality companies that are selling for cheap.
There is yet another type of investor who barely flinches during recession. A follower of the long-term, buy-and-hold strategy knows that short-term problems will barely be a blip on the chart when taking a 20-30 year horizon. This investor merely continues dollar-cost averaging in a bad market the same way as he or she would in a good one.
Of course, many of us don't have the luxury of a 20-year horizon. At the same time, many investors don't have the stomach for riskier techniques like short selling or the time to analyze stocks like a value investor does. The key is to understand your situation and then pick a style that works for you. For example, if you are close to retirement, the long-term approach definitely is not for you. Instead of being at the mercy of the stock market, diversify into other assets such as bonds, the money market, real estate, etc.
Conclusion
The financial media often takes on a "sky is falling" mentality when it comes to recession. But the bottom line is that recession is a normal part of the business cycle. We can't say what the best course is for you - that's a personal decision. However, understanding both the business cycle and your individual investment style is key to surviving a recession.
Taken From http://www.investopedia.com
According to the National Bureau of Economic Research (NBER), recession is defined as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production and wholesale-retail sales". More specifically, recession is defined as when businesses cease to expand, the GDP diminishes for two consecutive quarters, the rate of unemployment rises and housing prices decline.
Many factors contribute to an economy's fall into a recession, but the major cause is inflation. Inflation refers to a general rise in the prices of goods and services over a period of time. The higher the rate of inflation, the smaller the percentage of goods and services that can be purchased with the same amount of money. Inflation can happen for reasons as varied as increased production costs, higher energy costs and national debt. (For more on this topic, see All About Inflation.)
In an inflationary environment, people tend to cut out leisure spending, reduce overall spending and begin to save more. But as individuals and businesses curtail expenditures in an effort to trim costs, this causes GDP to decline. Unemployment rates rise because companies lay off workers to cut costs. It is these combined factors that cause the economy to fall into a recession
Recession: What Does It Mean To Investors?
When the economy heads into a tailspin, you may hear news reports of dropping housing starts, increased jobless claims and shrinking economic output. How does this affect us as investors? What do house building and shrinking output have to do with your portfolio? As you'll discover, these indicators are part of a larger picture, which determines the strength of the economy and whether we are in a period of recession or expansion.
The Phases of the Business Cycle
In order to determine the current state of the economy, we first need to take a good look at the business cycle as a whole. Generally, the business cycle is made up of four different periods of activity extended over several years. These phases can differ substantially in duration, but are all closely intertwined in the overall economy.
Peak - This is not the beginning of the business cycle, but this is where we'll start. At its peak, the economy is running at full steam. Employment is at or near maximum levels, gross domestic product (GDP) output is at its upper limit (implying that there is very little waste occurring) and income levels are increasing. In this period, prices tend to increase due to inflation; however, most businesses and investors are having an enjoyable and prosperous time.
Recession - The old adage "what goes up must come down" applies perfectly here. After experiencing a great deal of growth and success, income and employment begin to decline. As our wages and the prices of goods in the economy are inflexible to change, they will most likely remain near the same level as in the peak period unless the recession is prolonged. The result of these factors is negative growth in the economy.
Trough - Also sometimes referred to as a depression, depending upon the duration of the trough, this is the section of the business cycle when output and employment bottom out and remain in waiting for the next phase of the cycle to begin.
Expansion/Recovery - In a recovery, the economy is growing once again and moving away from the bottoms experienced at the trough. Employment, production and income all undergo a period of growth and the overall economic climate is good.
Recession and recovery are the areas of the business cycle that are more important to investors because they tell us the direction of the economy.
To further complicate matters, not all business cycles go through these four steps sequentially. For instance, during a double dip recession, the economy goes through a recession followed by a short recovery and another recession without ever peaking.
Recession Versus Expansion
Recession is loosely defined as two consecutive quarters of decline in GDP output. This definition can lead to situations where there are frequent switches between a recession and expansion and, as such, many different variations of this principle have been used in the hope of creating a universal method for calculation.
The National Bureau of Economic Research (NBER) is an organization that is seen as having the final word in determining whether the United States is in recession. It has a more extensive definition of recession, which deems the following four main factors as the most important for determining the state of the economy:
Employment
Personal income
Sales volume in manufacturing and retail sectors
Industrial production>
By looking at these four indicators, economists at the NBER hope to gauge the overall health of the market and decide whether the economy is in recession or expansion.
The tricky part about trying to determine the state of the economy is that most indicators are either lagging or coincidental rather than leading. When an indicator is "lagging" it means that the indicator changes only after the fact. That is, a lagging indicator can confirm that an economy is in recession, but it doesn't help much in predicting what will happen in the future. (Learn more about this in Economic Indicators To Know.)
What Does this Mean for Investors?
Understanding the business cycle doesn't matter much unless it improves portfolio returns. What's an investor to do during recession? Unfortunately, there is no easy answer. It really depends on your situation and what type of investor you are. (For some ideas, see Recession-Proof Your Portfolio.)
First, remember that a bear market does not mean there are no ways to make money. Some investors take advantage of falling markets by short selling stocks. Essentially, an investor who sells short profits when a stock declines in value. Problem is, this technique has many unique pitfalls and should be used only by more experienced investors. (If you want to learn more, see the tutorial Short Selling.)
Another breed of investor uses recession much like a sale at the local department store. Referred to as value investing, this technique involves looking at a fallen stock not as a failure, but as a bargain waiting to be scooped up. Knowing that better times will eventually return in the economy, value investors use bear markets as buying sprees, picking up high-quality companies that are selling for cheap.
There is yet another type of investor who barely flinches during recession. A follower of the long-term, buy-and-hold strategy knows that short-term problems will barely be a blip on the chart when taking a 20-30 year horizon. This investor merely continues dollar-cost averaging in a bad market the same way as he or she would in a good one.
Of course, many of us don't have the luxury of a 20-year horizon. At the same time, many investors don't have the stomach for riskier techniques like short selling or the time to analyze stocks like a value investor does. The key is to understand your situation and then pick a style that works for you. For example, if you are close to retirement, the long-term approach definitely is not for you. Instead of being at the mercy of the stock market, diversify into other assets such as bonds, the money market, real estate, etc.
Conclusion
The financial media often takes on a "sky is falling" mentality when it comes to recession. But the bottom line is that recession is a normal part of the business cycle. We can't say what the best course is for you - that's a personal decision. However, understanding both the business cycle and your individual investment style is key to surviving a recession.
Taken From http://www.investopedia.com
Thursday, December 4, 2008
CRASH PROTECTION
If you cannot liquidate vulnerable stocks, consider these steps:
Step 1: Learn more about reverse index funds. If you put money in a typical stock market mutual fund, the managers will generally invest it in various stocks that
they pick, depending on their research and opinion of the market.Index mutual funds are more restricted. The managers’job is strictly to buy stocks or other instruments to match,as closely as possible, the performance of a particular stock market index, such as the Dow Jones Industrials, the S&P 500 or the Nasdaq 100. Reverse index mutual funds use the same principle—but in reverse. Instead of helping you make money when the market goes up, they are designed to help you make money when the market goes down. They invest a good portion of your money in safe instruments, such as Treasury bills, to generate interest income. Plus, they allocate a portion to investments, such as futures and options, that appreciate as the market goes down, balancing the exact quantities of these instruments so that
■ There is always enough cash and equivalent in the fund to cover any losses. You cannot lose more than you invest.
■ The fund matches the performance of the index in reverse. If the market goes down, you will make a profit; if the market goes up, you will incur a loss
Step 2: Evaluate your remaining stock portfolio. Is it almost entirely tech stocks? Or is it mostly blue-chip and other stocks, with just a small amount of techs?If you have blue-chip or other stocks that you can’t sell, consider placing a modest portion of your money into shares of the Rydex Ursa fund or quivalent. That way, if your stock portfolio is falling, your Ursa shares will be rising, helping to offset the loss.If you have a large portfolio of tech stocks that you can’t sell, you should buy shares in the Rydex Arktos fund. That way, even if your tech stocks fall still further, at least your Arktos shares will be rising, helping to offset the loss.
Step 3: Estimate your risk of loss. No one knows for sure whether the stock market is going up or down—let alone how much or how quickly. But based on recent history, it is not unreasonable to assume that a stock portfolio could fall 50 percent. If your portfolio is worth about $100,000 at
Step 4: Decide how much of that risk you want to protect yourself against. If you wanted to protect yourself against the entire amount, you’d have to invest about dollar for dollar in one of the reverse index funds. If that is too much, consider covering half your portfolio. Then, for every $1 of current value in your stock portfolio, you would simply put 50 cents of your money into the appropriate reverse index fund (see Step 1). Assuming that your stock portfolio is worth $100,000, you’d be investing about $50,000 in the fund.
Step 5: Raise the funds for your crash protection program. Where do you get the extra $50,000? You could take it from your cash assets. But if you did, you would in effect be moving money from a safe investment to a more aggressive investment. That may not be prudent. Instead, a prudent alternative is to liquidate at least enough from your remaining stock portfolio to finance this program.
The formula is simple: If you want a program that will protect you against half your risk, and you don’t want to take money from another source, you should liquidate one-third of your shares to generate the money.
Taken From Crash Profit - Martin Weiss
Step 1: Learn more about reverse index funds. If you put money in a typical stock market mutual fund, the managers will generally invest it in various stocks that
they pick, depending on their research and opinion of the market.Index mutual funds are more restricted. The managers’job is strictly to buy stocks or other instruments to match,as closely as possible, the performance of a particular stock market index, such as the Dow Jones Industrials, the S&P 500 or the Nasdaq 100. Reverse index mutual funds use the same principle—but in reverse. Instead of helping you make money when the market goes up, they are designed to help you make money when the market goes down. They invest a good portion of your money in safe instruments, such as Treasury bills, to generate interest income. Plus, they allocate a portion to investments, such as futures and options, that appreciate as the market goes down, balancing the exact quantities of these instruments so that
■ There is always enough cash and equivalent in the fund to cover any losses. You cannot lose more than you invest.
■ The fund matches the performance of the index in reverse. If the market goes down, you will make a profit; if the market goes up, you will incur a loss
Step 2: Evaluate your remaining stock portfolio. Is it almost entirely tech stocks? Or is it mostly blue-chip and other stocks, with just a small amount of techs?If you have blue-chip or other stocks that you can’t sell, consider placing a modest portion of your money into shares of the Rydex Ursa fund or quivalent. That way, if your stock portfolio is falling, your Ursa shares will be rising, helping to offset the loss.If you have a large portfolio of tech stocks that you can’t sell, you should buy shares in the Rydex Arktos fund. That way, even if your tech stocks fall still further, at least your Arktos shares will be rising, helping to offset the loss.
Step 3: Estimate your risk of loss. No one knows for sure whether the stock market is going up or down—let alone how much or how quickly. But based on recent history, it is not unreasonable to assume that a stock portfolio could fall 50 percent. If your portfolio is worth about $100,000 at
Step 4: Decide how much of that risk you want to protect yourself against. If you wanted to protect yourself against the entire amount, you’d have to invest about dollar for dollar in one of the reverse index funds. If that is too much, consider covering half your portfolio. Then, for every $1 of current value in your stock portfolio, you would simply put 50 cents of your money into the appropriate reverse index fund (see Step 1). Assuming that your stock portfolio is worth $100,000, you’d be investing about $50,000 in the fund.
Step 5: Raise the funds for your crash protection program. Where do you get the extra $50,000? You could take it from your cash assets. But if you did, you would in effect be moving money from a safe investment to a more aggressive investment. That may not be prudent. Instead, a prudent alternative is to liquidate at least enough from your remaining stock portfolio to finance this program.
The formula is simple: If you want a program that will protect you against half your risk, and you don’t want to take money from another source, you should liquidate one-third of your shares to generate the money.
Taken From Crash Profit - Martin Weiss
Wednesday, December 3, 2008
Dow Theory
Dow Theory
A theory which says the market is in an upward trend if one of its averages (industrial or transportation) advances above a previous important high, it is accompanied or followed by a similar advance in the other.
The theory also says that when both averages dip below previous important lows, it's regarded as an indicator of a downward trend.
Dogs Of The Dow
An investing strategy that consists of buying the 10 DJIA stocks with the highest dividend yield at the beginning of the year. The portfolio should be adjusted at the beginning of each year to include the 10 highest yielding stocks.
The strategy was formulated in 1972 and has proven to be successful. In fact, as Dog of the Dow investors readjust their portfolios each year, it places pressure on the stocks involved.
Dow Jones Industrial Average - DJIA
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.
Often referred to as "the Dow", the DJIA is the oldest and single most watched index in the world. The DJIA includes companies like General Electric, Disney, Exxon and Microsoft. When the TV networks say "the market is up today", they are generally referring to the Dow.
Theoretical Dow Jones Index
A method of calculating a Dow Jones index (most often the DJIA) that assumes all index components hit their high or low at the same time during the day.
In other words, the "theoretical Dow" uses the daily highs for all 30 Dow components to calculate the index high, and the lows to calculate the index low. In January of 1992, Dow Jones started using the "actual" method, which calculates the index at 10-second intervals throughout the day. Before this point, the theoretical calculation was the only way to compute the high and low of the index. This method assumes that all stocks hit their high or low at the same time. Because this rarely happens, the theoretical high will almost always be higher than the actual, and the theoretical low will almost always be lower than the actual.
Who or what is Dow Jones?
Dow Jones, or more precisely "Dow Jones & Company", is one of the largest business and financial news companies in the world. The firm was founded in 1896 by Charles Dow, Edward T. Jones and Charles Bergstresser. In 1889 they founded The Wall Street Journal, which remains one of the most influential financial publications. It is easy to confuse Dow Jones with the Dow Jones Industrial Average (DJIA). Often referred to as "the Dow", the DJIA is one of the most watched stock indexes in the world, containing companies like General Electric, Microsoft, Coca-Cola and Exxon. Dow Jones (the company) owns the Dow Jones Industrial Average as well as many other indexes that represent different sectors of the economy. In the world of finance, you'll often hear people ask, "How did New York do today?" or "How did the market perform today?" In both cases, these people are likely referring to the DJIA as it is the most widely used index, above both the S&P 500 Index and the Nasdaq Composite Index.
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A theory which says the market is in an upward trend if one of its averages (industrial or transportation) advances above a previous important high, it is accompanied or followed by a similar advance in the other.
The theory also says that when both averages dip below previous important lows, it's regarded as an indicator of a downward trend.
Dogs Of The Dow
An investing strategy that consists of buying the 10 DJIA stocks with the highest dividend yield at the beginning of the year. The portfolio should be adjusted at the beginning of each year to include the 10 highest yielding stocks.
The strategy was formulated in 1972 and has proven to be successful. In fact, as Dog of the Dow investors readjust their portfolios each year, it places pressure on the stocks involved.
Dow Jones Industrial Average - DJIA
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.
Often referred to as "the Dow", the DJIA is the oldest and single most watched index in the world. The DJIA includes companies like General Electric, Disney, Exxon and Microsoft. When the TV networks say "the market is up today", they are generally referring to the Dow.
Theoretical Dow Jones Index
A method of calculating a Dow Jones index (most often the DJIA) that assumes all index components hit their high or low at the same time during the day.
In other words, the "theoretical Dow" uses the daily highs for all 30 Dow components to calculate the index high, and the lows to calculate the index low. In January of 1992, Dow Jones started using the "actual" method, which calculates the index at 10-second intervals throughout the day. Before this point, the theoretical calculation was the only way to compute the high and low of the index. This method assumes that all stocks hit their high or low at the same time. Because this rarely happens, the theoretical high will almost always be higher than the actual, and the theoretical low will almost always be lower than the actual.
Who or what is Dow Jones?
Dow Jones, or more precisely "Dow Jones & Company", is one of the largest business and financial news companies in the world. The firm was founded in 1896 by Charles Dow, Edward T. Jones and Charles Bergstresser. In 1889 they founded The Wall Street Journal, which remains one of the most influential financial publications. It is easy to confuse Dow Jones with the Dow Jones Industrial Average (DJIA). Often referred to as "the Dow", the DJIA is one of the most watched stock indexes in the world, containing companies like General Electric, Microsoft, Coca-Cola and Exxon. Dow Jones (the company) owns the Dow Jones Industrial Average as well as many other indexes that represent different sectors of the economy. In the world of finance, you'll often hear people ask, "How did New York do today?" or "How did the market perform today?" In both cases, these people are likely referring to the DJIA as it is the most widely used index, above both the S&P 500 Index and the Nasdaq Composite Index.
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Tuesday, December 2, 2008
Mengelola Stres
"Ketika Anda berbicara tentang pendidikan, karir, atau jasa, Anda sedang berbicara tentang kehidupan. Dan kehidupan harus dinikmati. Kehidupan mestinya menyenangkan. "-- Barbara Bush, mantan Ibu Negara Amerika
DAMPAK krisis keuangan di Amerika terhadap perekonomian global semakin serius. Bahkan Bank Indonesia mengakui krisis yang terjadi di luar prediksi mereka. Saham di Bursa Efek Jakarta diberitakan rontok secara drastis pada awal Oktober kemarin. BEJ pun menutup perdagangan saham selama tiga hari. Pemerintah mengatakan bahwa krisis keuangan di AS akan memberi dua dampak kepada Indonesia, keterbatasan likuiditas dan perlambatan ekonomi. Dampak tersebut akan dirasakan dalam kurun waktu enam bulan hingga satu tahun.
Tetapi, belum enam bulan berjalan, dampak itu sudah terasa di sebagian sektor. Yang paling membuat pening kepala pertama kali, tentu saja para pemangku kepentingan perusahaan dan pemilik saham begitu tahu sahamnya jeblok. Di beberapa daerah, para pengusaha yang mengekspor kerajinannya ke Amerika dan Eropa dikabarkan mengalami penurunan pengiriman barang secara drastis. Hal ini menyebabkan beberapa pengusaha merumahkan karyawannya sampai batas waktu yang tidak ditentukan. Sementara itu, pedagang barang elektronik kesulitan mendapatkan pasokan barang menyusul kenaikan harga akibat naiknya harga dolar. Sedangkan sebagian turis mancanegara dikabarkan membatalkan kunjungannya ke Indonesia.
Memang ada yang tenang-tenang saja melihat krisis global yang terjadi saat ini. Tetapi, tidak sedikit pula yang ketar-ketir melihat situasi ini. Daya beli masyarakat memang cenderung menurun seiring kenaikan harga BBM yang terjadi pada bulan Mei lalu. Kenaikan harga BBM ini tentu juga mengakibatkan efek domino terhadap naiknya kebutuhan pokok, barang dan jasa lainnya. Sayangnya, kenaikan BBM ini tidak disertai dengan kenaikan pendapatan masyarakat. Nah, dengan ditambah krisis global yang terjadi saat ini, membuat sebagian masyarakat menjadi semakin was-was dan tidak sedikit pula yang menjadi stres.
Stres? Betul. Jika hal ini terjadi, tentu saja akan menambah panjang deretan penderita stres di negeri ini. Mengingat penderita gangguan kejiwaan di negara ini mengalami peningkatan yang signifikan semenjak harga BBM naik. Bahkan WHO sendiri mengingatkan, krisis keuangan global yang terjadi saat ini, bisa membuat banyak orang mengalami depresi, stres, gangguan kejiwaan dan mudah putus asa.
Stres yang dialami seseorang, sejatinya sesuatu hal yang sulit untuk dihindari. Stres memikirkan beban hidup. Stres di tempat kerja atau stres karena sebab lain. Masalahnya adalah bagaimana mengelola stres dengan baik agar tidak berdampak negatif bagi kesehatan jiwa dan tubuh. Stres yang tak terkendali akan memicu naiknya tekanan darah dan berisiko terkena serangan jantung. Stres dapat pula menaikkan kadar kolesterol dalam darah. Kondisi ini yang nantinya membuat pembuluh darah tersumbat, sehingga penderita rentan terhadap stroke.
Bagaimana tanda-tanda stres dapat dikenali? Ada sejumlah sinyal yang sesungguhnya dapat Anda rasakan ketika Anda mengalami stres, seperti: mudah tersinggung, naiknya tekanan jantung, meningkatnya tekanan darah, merasa berkeringat atau sering menggigil, sulit tidur, sakit kepala, sakit pencernaan, sakit di leher, sakit punggung bagian bawah, mengalami sakit yang tidak biasa, pergi ke toilet lebih sering dari biasanya, lebih banyak merokok dan minum, merasa gelisah tanpa sebab, kehilangan selera makanan, kesenangan atau bahkan seks, selalu dirundung kesedihan, menjadi pelupa, atau gejala-gejala lain yang tidak biasanya
Pada hakekatnya, stres dapat dikendalikan secara dini bila seseorang menyadari datangnya stres di awal. Bagaimana mengelola stres yang terjadi pada diri kita? Beberapa saran berikut semoga dapat membantu Anda.
Melakukan perawatan terhadap tubuh
Anda dapat mengusir stres dengan memanjakan tubuh Anda. Apa saja misalnya? Berendamlah di air hangat. Hal ini dapat membuat Anda merasakan rileks sekaligus mengendurkan otot-otot yang kaku. Pijatan yang lembut di tangan, kaki, dan wajah juga dapat membuat peredaran darah menjadi lancar. Untuk mata Anda, taruhlah irisan buah ketimun di mata sembari terpejam. Anda bisa juga menyalakan lilin amoterapi. Dan dengan diiringi musik alunan lembut, tutup mata anda, dan bayangkan hal-hal yang menyenangkan dalam hidup. Atau Anda dapat juga melakukan pedicure atau facial.
Berolahraga, melakukan meditasi atau yoga
Anda dapat melakukan olahraga yang ringan seperti jogging, jalan sehat, aerobik atau angkat beban. Olahraga membuat tubuh Anda menjadi segar dan sehat, sehingga Anda dapat berpikir dengan jernih. Jika Anda dapat berpikir dengan jernih, maka Anda dapat melihat dan menyelesaikan masalah dengan lebih baik. Anda bisa juga melakukan meditasi atau yoga. Dengan yoga, tubuh akan lebih rileks. Bagaimana bila ketegangan menunjukkan kenaikan yang signifikan? Ambillah nafas dalam tiga hitungan, kemudian keluarkan juga dalam tiga hitungan. Secara bertahap lakukan dengan menaikkan hitungan menjadi lima, enam, tujuh dan seterusnya. Membaca buku dan mendengarkan musikLuangkanlah waktu untuk rileks dengan membaca buku atau mendengarkan musik.
Menyingkir dari rutinitas
Menyingkir dari rutinitas? Tentu saja. Jangan berpikir ini hal yang sulit. Anda bisa melakukannya secara sederhana. Mencuci pakaian, menyetrika pakaian, berkebun. Atau bisa juga melakukan rekreasi yang murah meriah dengan keluarga atau teman sejawat.
Makan dan minum dengan baik dan benar
Konsumsilah menu secara seimbang terutama yang memiliki kandungan serat seperti sayuran dan buah. Kurangi pula mengkonsumsi gula rafinasi. Dan ingat, kurangi rokok, alkohol, dan kafein. Orang yang bersahabat dengan alkohol, kafein, nikotin seringkali tak dapat melawan stres. Perbanyaklah minum air putih. Tubuh bisa jadi tak mengalami dehidrasi walau tubuh tak merasa haus. So, saat Anda ke kamar mandi, pastikan urin Anda berwarna terang. Dan jangan lupa, tidurlah dengan cukup.
Sesungguhnya, krisis ekonomi yang terjadi hanyalah bagian dari sekian banyak masalah yang dihadapi manusia. Walau begitu, tetap saja harus disikapi secara arif dan legowo. Krisis global saat ini bisa jadi jauh dari perkiraan banyak orang. Oleh karena itu dalam diri seseorang, harus tertanam kesadaran bahwa ada hal-hal yang tak bisa dikendalikan. Hal-hal yang di luar perkiraan sebelumnya. Ini penting, agar kita tidak kecewa nantinya jika ternyata rencana-rencana yang sudah diatur jauh meleset dari harapan. Kekecewaan itu mungkin menghalangi tujuan yang telah kita tetapkan di awal. Untuk menghadapi hal-hal seperti ini, mental kita harus sudah siap. Inilah sesungguhnya pondasi dasar dalam menghadapi stres yang terjadi. Mental yang siap, kuat, dan tahan uji.
Betapapun beratnya badai krisis, tetap harus kita hadapi dengan bijak. Karena, walau katakanlah ada bagian yang hilang akibat krisis tersebut, kita patut bersyukur bahwa masih terdapat kelebihan-kelebihan yang kita miliki. Kita masih bisa hidup dengan sehat, gaji yang dibayar cukup, dan kelebihan lainnya yang mungkin orang lain belum tentu dapatkan. Dan pada akhirnya, kunci dalam menghadapi stres sesungguhnya bagaimana Anda dapat menikmati hidup ini, ikhlas dan sabar dalam menghadapi cobaan, serta selalu bersyukur atas segala yang diberikan olehNya. Dan terakhir, berdoalah untuk selalu memohon kepadaNya agar senantiasa Anda diberi petunjuk dalam menjalani hidup ini.
Sumber: Mengelola Stres oleh Sonny Wibisono, penulis, tinggal di Jakarta
DAMPAK krisis keuangan di Amerika terhadap perekonomian global semakin serius. Bahkan Bank Indonesia mengakui krisis yang terjadi di luar prediksi mereka. Saham di Bursa Efek Jakarta diberitakan rontok secara drastis pada awal Oktober kemarin. BEJ pun menutup perdagangan saham selama tiga hari. Pemerintah mengatakan bahwa krisis keuangan di AS akan memberi dua dampak kepada Indonesia, keterbatasan likuiditas dan perlambatan ekonomi. Dampak tersebut akan dirasakan dalam kurun waktu enam bulan hingga satu tahun.
Tetapi, belum enam bulan berjalan, dampak itu sudah terasa di sebagian sektor. Yang paling membuat pening kepala pertama kali, tentu saja para pemangku kepentingan perusahaan dan pemilik saham begitu tahu sahamnya jeblok. Di beberapa daerah, para pengusaha yang mengekspor kerajinannya ke Amerika dan Eropa dikabarkan mengalami penurunan pengiriman barang secara drastis. Hal ini menyebabkan beberapa pengusaha merumahkan karyawannya sampai batas waktu yang tidak ditentukan. Sementara itu, pedagang barang elektronik kesulitan mendapatkan pasokan barang menyusul kenaikan harga akibat naiknya harga dolar. Sedangkan sebagian turis mancanegara dikabarkan membatalkan kunjungannya ke Indonesia.
Memang ada yang tenang-tenang saja melihat krisis global yang terjadi saat ini. Tetapi, tidak sedikit pula yang ketar-ketir melihat situasi ini. Daya beli masyarakat memang cenderung menurun seiring kenaikan harga BBM yang terjadi pada bulan Mei lalu. Kenaikan harga BBM ini tentu juga mengakibatkan efek domino terhadap naiknya kebutuhan pokok, barang dan jasa lainnya. Sayangnya, kenaikan BBM ini tidak disertai dengan kenaikan pendapatan masyarakat. Nah, dengan ditambah krisis global yang terjadi saat ini, membuat sebagian masyarakat menjadi semakin was-was dan tidak sedikit pula yang menjadi stres.
Stres? Betul. Jika hal ini terjadi, tentu saja akan menambah panjang deretan penderita stres di negeri ini. Mengingat penderita gangguan kejiwaan di negara ini mengalami peningkatan yang signifikan semenjak harga BBM naik. Bahkan WHO sendiri mengingatkan, krisis keuangan global yang terjadi saat ini, bisa membuat banyak orang mengalami depresi, stres, gangguan kejiwaan dan mudah putus asa.
Stres yang dialami seseorang, sejatinya sesuatu hal yang sulit untuk dihindari. Stres memikirkan beban hidup. Stres di tempat kerja atau stres karena sebab lain. Masalahnya adalah bagaimana mengelola stres dengan baik agar tidak berdampak negatif bagi kesehatan jiwa dan tubuh. Stres yang tak terkendali akan memicu naiknya tekanan darah dan berisiko terkena serangan jantung. Stres dapat pula menaikkan kadar kolesterol dalam darah. Kondisi ini yang nantinya membuat pembuluh darah tersumbat, sehingga penderita rentan terhadap stroke.
Bagaimana tanda-tanda stres dapat dikenali? Ada sejumlah sinyal yang sesungguhnya dapat Anda rasakan ketika Anda mengalami stres, seperti: mudah tersinggung, naiknya tekanan jantung, meningkatnya tekanan darah, merasa berkeringat atau sering menggigil, sulit tidur, sakit kepala, sakit pencernaan, sakit di leher, sakit punggung bagian bawah, mengalami sakit yang tidak biasa, pergi ke toilet lebih sering dari biasanya, lebih banyak merokok dan minum, merasa gelisah tanpa sebab, kehilangan selera makanan, kesenangan atau bahkan seks, selalu dirundung kesedihan, menjadi pelupa, atau gejala-gejala lain yang tidak biasanya
Pada hakekatnya, stres dapat dikendalikan secara dini bila seseorang menyadari datangnya stres di awal. Bagaimana mengelola stres yang terjadi pada diri kita? Beberapa saran berikut semoga dapat membantu Anda.
Melakukan perawatan terhadap tubuh
Anda dapat mengusir stres dengan memanjakan tubuh Anda. Apa saja misalnya? Berendamlah di air hangat. Hal ini dapat membuat Anda merasakan rileks sekaligus mengendurkan otot-otot yang kaku. Pijatan yang lembut di tangan, kaki, dan wajah juga dapat membuat peredaran darah menjadi lancar. Untuk mata Anda, taruhlah irisan buah ketimun di mata sembari terpejam. Anda bisa juga menyalakan lilin amoterapi. Dan dengan diiringi musik alunan lembut, tutup mata anda, dan bayangkan hal-hal yang menyenangkan dalam hidup. Atau Anda dapat juga melakukan pedicure atau facial.
Berolahraga, melakukan meditasi atau yoga
Anda dapat melakukan olahraga yang ringan seperti jogging, jalan sehat, aerobik atau angkat beban. Olahraga membuat tubuh Anda menjadi segar dan sehat, sehingga Anda dapat berpikir dengan jernih. Jika Anda dapat berpikir dengan jernih, maka Anda dapat melihat dan menyelesaikan masalah dengan lebih baik. Anda bisa juga melakukan meditasi atau yoga. Dengan yoga, tubuh akan lebih rileks. Bagaimana bila ketegangan menunjukkan kenaikan yang signifikan? Ambillah nafas dalam tiga hitungan, kemudian keluarkan juga dalam tiga hitungan. Secara bertahap lakukan dengan menaikkan hitungan menjadi lima, enam, tujuh dan seterusnya. Membaca buku dan mendengarkan musikLuangkanlah waktu untuk rileks dengan membaca buku atau mendengarkan musik.
Menyingkir dari rutinitas
Menyingkir dari rutinitas? Tentu saja. Jangan berpikir ini hal yang sulit. Anda bisa melakukannya secara sederhana. Mencuci pakaian, menyetrika pakaian, berkebun. Atau bisa juga melakukan rekreasi yang murah meriah dengan keluarga atau teman sejawat.
Makan dan minum dengan baik dan benar
Konsumsilah menu secara seimbang terutama yang memiliki kandungan serat seperti sayuran dan buah. Kurangi pula mengkonsumsi gula rafinasi. Dan ingat, kurangi rokok, alkohol, dan kafein. Orang yang bersahabat dengan alkohol, kafein, nikotin seringkali tak dapat melawan stres. Perbanyaklah minum air putih. Tubuh bisa jadi tak mengalami dehidrasi walau tubuh tak merasa haus. So, saat Anda ke kamar mandi, pastikan urin Anda berwarna terang. Dan jangan lupa, tidurlah dengan cukup.
Sesungguhnya, krisis ekonomi yang terjadi hanyalah bagian dari sekian banyak masalah yang dihadapi manusia. Walau begitu, tetap saja harus disikapi secara arif dan legowo. Krisis global saat ini bisa jadi jauh dari perkiraan banyak orang. Oleh karena itu dalam diri seseorang, harus tertanam kesadaran bahwa ada hal-hal yang tak bisa dikendalikan. Hal-hal yang di luar perkiraan sebelumnya. Ini penting, agar kita tidak kecewa nantinya jika ternyata rencana-rencana yang sudah diatur jauh meleset dari harapan. Kekecewaan itu mungkin menghalangi tujuan yang telah kita tetapkan di awal. Untuk menghadapi hal-hal seperti ini, mental kita harus sudah siap. Inilah sesungguhnya pondasi dasar dalam menghadapi stres yang terjadi. Mental yang siap, kuat, dan tahan uji.
Betapapun beratnya badai krisis, tetap harus kita hadapi dengan bijak. Karena, walau katakanlah ada bagian yang hilang akibat krisis tersebut, kita patut bersyukur bahwa masih terdapat kelebihan-kelebihan yang kita miliki. Kita masih bisa hidup dengan sehat, gaji yang dibayar cukup, dan kelebihan lainnya yang mungkin orang lain belum tentu dapatkan. Dan pada akhirnya, kunci dalam menghadapi stres sesungguhnya bagaimana Anda dapat menikmati hidup ini, ikhlas dan sabar dalam menghadapi cobaan, serta selalu bersyukur atas segala yang diberikan olehNya. Dan terakhir, berdoalah untuk selalu memohon kepadaNya agar senantiasa Anda diberi petunjuk dalam menjalani hidup ini.
Sumber: Mengelola Stres oleh Sonny Wibisono, penulis, tinggal di Jakarta
Market Update For Today
A sharp sell-off in the stock market Monday snapped a five-session winning streak as inventors digested a weak manufacturing survey, the possibility that the Federal Reserve may buy longer-term Treasuries, word that the U.S. economy officially entered recession in December 2007 and concerns regarding financials.
The S&P 500 dropped 8.9%, settling near its lows following a late session surge surge in selling interest. Volume was slightly above the year-to-date average. The decline was broad-based, with 498 of the components within the S&P 500 posting a decline.
The financial sector (-17.0%) got hit the hardest. Oppenheimer analyst Meredith Whitney said the U.S. credit card industry may cut credit lines by well over $2 trillion, or 45%, over the next 18 months, citing risk aversion, funding challenges and regulatory and accounting changes. Whitney's opinion is well respected after she correctly predicted much of the turmoil on Wall Street.
Weakness in commodities (-3.6%), with oil dropping 9.5%, weighed on the energy (-10.3%) and material sectors (-9.8%).
In economic news, Federal Reserve Chairman Ben Bernanke said the U.S. economy remains under stress despite the efforts of the Fed and other Policy makers. To help alleviate the stress, he laid out possible further policy actions, including lowering the fed funds rate, purchasing longer-term Treasuries or agency securities on the open market.
The latter comment, along with a flight-to-safety bid, sparked a rally in Treasuries, with yields of both the 10-year note and 30-year bond dropping too record lows. The 10-year note rose 48 ticks to yield only 2.75% and the 30-year bond rose more than four points to yield 3.23%.
The November ISM Index, a national manufacturing survey, declined to 36.2 from the October reading of 38.9. This was worse than the consensus estimate of 37.0 and, represents the most contraction in U.S. manufacturing since 1982. The survey shows continued signs of dropping prices, with the ISM Prices Paid Index declining to 25.5 from October's reading of 37.0. The industrials sector dropped 8.5%.
The National Bureau of Economic Research announced that December 2007 marks the end of a 73 month expansion in the U.S. economy and the beginning of a recession. Assuming the U.S. is still in a recession, the duration of decline the peak to trough decline will surpass the recessions of 2001 (8 months) and 1990/1991 (8 months), marking the longest recession since 1981/1982 (16 months).
Black Friday sales were better-than-feared. Depending on the research firm, sales were up between 2% and 7% year-over-year. However, there are concerns that the sales came at the expense of steep discounts and buying has since tapered off. Retailer stocks dropped 9.3%.
In the end, the S&P 500's decline of 80 points erased nearly all of last week's 96 point gain. The index is up 10.2% from its multi-year low reached on Nov. 21, and down 44.4% this year.DJ30 -679.95 NASDAQ -137.50 NQ100 -8.0% R2K -11.9% SP400 -10.9% SP500 -80.03 NASDAQ Dec/Adv/Vol 2353/416/1.95 bln NYSE Dec/Adv/Vol 2809/356/1.63 bln
The S&P 500 dropped 8.9%, settling near its lows following a late session surge surge in selling interest. Volume was slightly above the year-to-date average. The decline was broad-based, with 498 of the components within the S&P 500 posting a decline.
The financial sector (-17.0%) got hit the hardest. Oppenheimer analyst Meredith Whitney said the U.S. credit card industry may cut credit lines by well over $2 trillion, or 45%, over the next 18 months, citing risk aversion, funding challenges and regulatory and accounting changes. Whitney's opinion is well respected after she correctly predicted much of the turmoil on Wall Street.
Weakness in commodities (-3.6%), with oil dropping 9.5%, weighed on the energy (-10.3%) and material sectors (-9.8%).
In economic news, Federal Reserve Chairman Ben Bernanke said the U.S. economy remains under stress despite the efforts of the Fed and other Policy makers. To help alleviate the stress, he laid out possible further policy actions, including lowering the fed funds rate, purchasing longer-term Treasuries or agency securities on the open market.
The latter comment, along with a flight-to-safety bid, sparked a rally in Treasuries, with yields of both the 10-year note and 30-year bond dropping too record lows. The 10-year note rose 48 ticks to yield only 2.75% and the 30-year bond rose more than four points to yield 3.23%.
The November ISM Index, a national manufacturing survey, declined to 36.2 from the October reading of 38.9. This was worse than the consensus estimate of 37.0 and, represents the most contraction in U.S. manufacturing since 1982. The survey shows continued signs of dropping prices, with the ISM Prices Paid Index declining to 25.5 from October's reading of 37.0. The industrials sector dropped 8.5%.
The National Bureau of Economic Research announced that December 2007 marks the end of a 73 month expansion in the U.S. economy and the beginning of a recession. Assuming the U.S. is still in a recession, the duration of decline the peak to trough decline will surpass the recessions of 2001 (8 months) and 1990/1991 (8 months), marking the longest recession since 1981/1982 (16 months).
Black Friday sales were better-than-feared. Depending on the research firm, sales were up between 2% and 7% year-over-year. However, there are concerns that the sales came at the expense of steep discounts and buying has since tapered off. Retailer stocks dropped 9.3%.
In the end, the S&P 500's decline of 80 points erased nearly all of last week's 96 point gain. The index is up 10.2% from its multi-year low reached on Nov. 21, and down 44.4% this year.DJ30 -679.95 NASDAQ -137.50 NQ100 -8.0% R2K -11.9% SP400 -10.9% SP500 -80.03 NASDAQ Dec/Adv/Vol 2353/416/1.95 bln NYSE Dec/Adv/Vol 2809/356/1.63 bln
Mengenal sosok Obama si Anak Menteng !!!…
Sejak dua tahun terakhir ini, nama Obama telah menjadi pembicaraan media diberbagai penjuru dunia, tepatnya ketika ia mulai mencalonkan diri sebagai kandidat Presiden Amerika Serikat (AS) pada awal Februari 2007 lalu. Terpuruknya ekonomi AS yang klimaksnya ditandai dengan bangkrutnya beberapa perusahaan raksasa seperti Lehman Brothers membawa dampak positif terhadap Obama sebagai calon Pemimpin AS yang paling diharapkan.
Siapakah sebenarnya Barack Obama? Barack Obama terlahir pada tanggal 04 Agustus 1961, dengan nama lengkap Barack Hussein Obama di Kapi’olani Medical Centre for Women & Children di Honolulu, Hawaii, Amerika Serikat (AS) dari pasangan berbeda ras. Ayahnya bernama Barack Husein Obama Sr. adalah seorang kulit hitam asal Kenya, Afrika sedangkan ibunya bernama Ann Dunham adalah seorang kulit putih keturunan Amerika yang berasal dari Kansas, AS.
Perjalanan hidup dan karir politik seorang Obama mungkin tak seberuntung para bangsawan-bangsawan Inggris yang terlahir dalam keluarga yang mewah dan berkelas hingga akhirnya pasti menjadi Raja. Sejak usianya menginjak 2 tahun, kedua orang tuanya telah bercerai. Ayahnya kembali ke Kenya sebelum akhirnya meninggal pada usia 46 tahun karena kecelakaan mobil pada tahun 1982 di Nairobi, Kenya, Afrika Timur, sedangkan ibunya menikah lagi dengan pria yang bernama Lolo Soetoro yang merupakan warga negara Indonesia. Keduanya bertemu saat kuliah pada universitas yang sama, yakni di University of Hawaii, Manoa, AS.
Sejak menikah dengan Lolo Soetoro, Dunham dan Obama diboyong ke Jakarta, Indonesia, tepatnya tinggal di daerah Menteng Dalam, Jakarta Pusat. Obama menghabiskan masa kecil dan sekolah dasarnya di Jakarta, namun saat usianya menginjak 10 tahun, ia pindah kerumah neneknya di Honolulu, AS. Disana Obama melanjutkan sekolahnya di Punahou School hingga selesai ditahun 1979.
Setelah menamatkan high school-nya, Obama hijrah ke Los Angeles (LA) dan sempat kuliah di Occidental College selama 2 tahun, namun kemudian pindah ke Columbia University di New York dengan mengambil fakultas Ilmu Politik, jurusan Hubungan Internasional. Obama berhasil meraih gelar B.A. dari kampusnya pada tahun 1983 lalu mulai bekerja pada Business International Corporation dan kemudian pindah kerja ke New York Public Interest Research Group.
Setelah 4 tahun bekerja di New York, Obama memperoleh kesempatan untuk menjadi seorang Direktur Developing Communities Project (DCP) di Chicago, selain itu Obama juga bekerja sebagai konsultan dan instruktur pada Gamaliel Foundation.
Pada tahun 1988, Obama kembali melanjutkan kuliahnya pada sebuah fakultas hukum bergengsi di Harvard Law School di Massachusetts AvenueCambridge. Disana, Obama berhasil memenangkan kompetisi menulis yang pada akhirnya membawa Obama menjadi seorang editor pada Harvard Law Review. Selain itu, Obama juga terpilih menjadi orang kulit hitam pertama yang menjadi Presiden pada Harvard Law Review. Prestasi inilah yang pada akhirnya membuat Obama mendapatkan kontrak dari University of Chicago Law School untuk menulis sebuah buku berjudul “Dreams from My Father: A Story of Race and Inheritance” yang diterbitkan pada tahun 1995.
Saat menjalani kuliah di Harvard Law School, Obama juga pernah bekerja pada Law Firms Sidley & Austin (1989) dan Hopkins & Sutter (1990). Obama kembali ke Chicago setelah menyelesaikan kuliahnya pada tahun 1991 dengan meraih gelar Juris Doctor (J. D.) magna cumlaude.
Di awal tahun 1992, Obama memperoleh kesempatan untuk menjadi seorang dosen Constitutional Law pada University of Chicago Law School. Kurang lebih selama 12 tahun Obama mengabdikan dirinya sebagai dosen pada universitas tersebut, yaitu sejak tahun 1992 hingga tahun 2004. Disela-sela kesibukannya mengajar sejak tahun 1993 hingga 1996, Obama juga tergabung dalam Davis, Barnhill & Galland sebagai pengacara khusus dalam bidang “Civil Rights Litigation” dan “Neighborhood Economic Development”.
Obama juga terlibat dalam beberapa organisasi, seperti founding member of directors of the Public Allies (1992), board of directors of the Woods Fund of Chicago (1994-2002), board of directors of the Joyce Foundation (1994-2002), board of directors of the Chicago Annenberg Challenge (1995-2002), board of directors of Chicago Lawyer’s Committee for Civil Rights Under Law, the Center for Neighborhood Technology, dan the Lugenia Burns Hope Center.
Karir politik Obama dimulai dengan menjadi senator pada negara bagian Illinois, AS, sejak tahun 1997 hingga tahun 2004. Pada tahun 2000, Obama sempat gagal terpilih untuk menduduki posisi pada U. S. House of Representatives. Akhirnya pada tahun 2004, Obama mulai berkampanye untuk menjadi U. S. senator melalui partai Demokrat dan pada bulan November 2004 Obama berhasil meraihnya, maka sejak 4 Januari 2005, Obama sudah mulai menjalankan tugas barunya sebagai U. S. Senator. Dalam sejarahnya, Obama merupakan keturunan Afrika-Amerika kelima yang menjadi seorang U. S. Senator.
Pada tanggal 10 Februari 2007, Obama resmi mengumumkan dirinya sebagai calon kandidat Presiden AS melalui pidatonya di gedung Old State Capitol, Springfield, Illinois, yaitu tempat yang sangat bersejarah dimana Abraham Lincoln pernah juga menyampaikan pidatonya pada tahun 1858.
Pada tanggal 23 Agustus 2008, Obama mengumumkan Joe Biden sebagai wakil yang akan mendampinginya dalam pemilihan umum tanggal 04 November 2008. Setelah mengungguli pesaingannya Hillary Clinton, Obama di aklamasikan melalui Konvensi Nasional Partai Demokrat di Denver, Colorado, sebagai kandidat presiden dari Partai Demokrat, kemudian pada tanggal 28 Agustus 2008 Obama secara resmi menyampaikan pidatonya dan menerima pencalonan dirinya sebagai kandidat Presiden AS dari Partai Demokrat.
Melalui pemilihan umum yang sangat demokratis pada tanggal 04 November 2008 kemarin, akhirnya Obama berhasil mengungguli pesaingnya John Mc Cain dari Partai Republik dengan kemenangan yang cukup telak melalui Electoral College Vote dan membawanya menjadi Presiden AS terpilih yang akan menggantikan kepemimpinan George W. Bush, sekaligus menjadi orang kulit hitam pertama yang akan menjadi Presiden AS.
Sebuah perjalanan panjang yang menegangkan dan sangat dramatis akhirnya ditutup dengan senyum kemenangan dan penuh kebanggaan oleh Obama si “Anak Menteng”. Yeah…, he is the first black President of United State of America, now !!!…..”
Siapakah sebenarnya Barack Obama? Barack Obama terlahir pada tanggal 04 Agustus 1961, dengan nama lengkap Barack Hussein Obama di Kapi’olani Medical Centre for Women & Children di Honolulu, Hawaii, Amerika Serikat (AS) dari pasangan berbeda ras. Ayahnya bernama Barack Husein Obama Sr. adalah seorang kulit hitam asal Kenya, Afrika sedangkan ibunya bernama Ann Dunham adalah seorang kulit putih keturunan Amerika yang berasal dari Kansas, AS.
Perjalanan hidup dan karir politik seorang Obama mungkin tak seberuntung para bangsawan-bangsawan Inggris yang terlahir dalam keluarga yang mewah dan berkelas hingga akhirnya pasti menjadi Raja. Sejak usianya menginjak 2 tahun, kedua orang tuanya telah bercerai. Ayahnya kembali ke Kenya sebelum akhirnya meninggal pada usia 46 tahun karena kecelakaan mobil pada tahun 1982 di Nairobi, Kenya, Afrika Timur, sedangkan ibunya menikah lagi dengan pria yang bernama Lolo Soetoro yang merupakan warga negara Indonesia. Keduanya bertemu saat kuliah pada universitas yang sama, yakni di University of Hawaii, Manoa, AS.
Sejak menikah dengan Lolo Soetoro, Dunham dan Obama diboyong ke Jakarta, Indonesia, tepatnya tinggal di daerah Menteng Dalam, Jakarta Pusat. Obama menghabiskan masa kecil dan sekolah dasarnya di Jakarta, namun saat usianya menginjak 10 tahun, ia pindah kerumah neneknya di Honolulu, AS. Disana Obama melanjutkan sekolahnya di Punahou School hingga selesai ditahun 1979.
Setelah menamatkan high school-nya, Obama hijrah ke Los Angeles (LA) dan sempat kuliah di Occidental College selama 2 tahun, namun kemudian pindah ke Columbia University di New York dengan mengambil fakultas Ilmu Politik, jurusan Hubungan Internasional. Obama berhasil meraih gelar B.A. dari kampusnya pada tahun 1983 lalu mulai bekerja pada Business International Corporation dan kemudian pindah kerja ke New York Public Interest Research Group.
Setelah 4 tahun bekerja di New York, Obama memperoleh kesempatan untuk menjadi seorang Direktur Developing Communities Project (DCP) di Chicago, selain itu Obama juga bekerja sebagai konsultan dan instruktur pada Gamaliel Foundation.
Pada tahun 1988, Obama kembali melanjutkan kuliahnya pada sebuah fakultas hukum bergengsi di Harvard Law School di Massachusetts AvenueCambridge. Disana, Obama berhasil memenangkan kompetisi menulis yang pada akhirnya membawa Obama menjadi seorang editor pada Harvard Law Review. Selain itu, Obama juga terpilih menjadi orang kulit hitam pertama yang menjadi Presiden pada Harvard Law Review. Prestasi inilah yang pada akhirnya membuat Obama mendapatkan kontrak dari University of Chicago Law School untuk menulis sebuah buku berjudul “Dreams from My Father: A Story of Race and Inheritance” yang diterbitkan pada tahun 1995.
Saat menjalani kuliah di Harvard Law School, Obama juga pernah bekerja pada Law Firms Sidley & Austin (1989) dan Hopkins & Sutter (1990). Obama kembali ke Chicago setelah menyelesaikan kuliahnya pada tahun 1991 dengan meraih gelar Juris Doctor (J. D.) magna cumlaude.
Di awal tahun 1992, Obama memperoleh kesempatan untuk menjadi seorang dosen Constitutional Law pada University of Chicago Law School. Kurang lebih selama 12 tahun Obama mengabdikan dirinya sebagai dosen pada universitas tersebut, yaitu sejak tahun 1992 hingga tahun 2004. Disela-sela kesibukannya mengajar sejak tahun 1993 hingga 1996, Obama juga tergabung dalam Davis, Barnhill & Galland sebagai pengacara khusus dalam bidang “Civil Rights Litigation” dan “Neighborhood Economic Development”.
Obama juga terlibat dalam beberapa organisasi, seperti founding member of directors of the Public Allies (1992), board of directors of the Woods Fund of Chicago (1994-2002), board of directors of the Joyce Foundation (1994-2002), board of directors of the Chicago Annenberg Challenge (1995-2002), board of directors of Chicago Lawyer’s Committee for Civil Rights Under Law, the Center for Neighborhood Technology, dan the Lugenia Burns Hope Center.
Karir politik Obama dimulai dengan menjadi senator pada negara bagian Illinois, AS, sejak tahun 1997 hingga tahun 2004. Pada tahun 2000, Obama sempat gagal terpilih untuk menduduki posisi pada U. S. House of Representatives. Akhirnya pada tahun 2004, Obama mulai berkampanye untuk menjadi U. S. senator melalui partai Demokrat dan pada bulan November 2004 Obama berhasil meraihnya, maka sejak 4 Januari 2005, Obama sudah mulai menjalankan tugas barunya sebagai U. S. Senator. Dalam sejarahnya, Obama merupakan keturunan Afrika-Amerika kelima yang menjadi seorang U. S. Senator.
Pada tanggal 10 Februari 2007, Obama resmi mengumumkan dirinya sebagai calon kandidat Presiden AS melalui pidatonya di gedung Old State Capitol, Springfield, Illinois, yaitu tempat yang sangat bersejarah dimana Abraham Lincoln pernah juga menyampaikan pidatonya pada tahun 1858.
Pada tanggal 23 Agustus 2008, Obama mengumumkan Joe Biden sebagai wakil yang akan mendampinginya dalam pemilihan umum tanggal 04 November 2008. Setelah mengungguli pesaingannya Hillary Clinton, Obama di aklamasikan melalui Konvensi Nasional Partai Demokrat di Denver, Colorado, sebagai kandidat presiden dari Partai Demokrat, kemudian pada tanggal 28 Agustus 2008 Obama secara resmi menyampaikan pidatonya dan menerima pencalonan dirinya sebagai kandidat Presiden AS dari Partai Demokrat.
Melalui pemilihan umum yang sangat demokratis pada tanggal 04 November 2008 kemarin, akhirnya Obama berhasil mengungguli pesaingnya John Mc Cain dari Partai Republik dengan kemenangan yang cukup telak melalui Electoral College Vote dan membawanya menjadi Presiden AS terpilih yang akan menggantikan kepemimpinan George W. Bush, sekaligus menjadi orang kulit hitam pertama yang akan menjadi Presiden AS.
Sebuah perjalanan panjang yang menegangkan dan sangat dramatis akhirnya ditutup dengan senyum kemenangan dan penuh kebanggaan oleh Obama si “Anak Menteng”. Yeah…, he is the first black President of United State of America, now !!!…..”
U.S. is recession, and it began in December 2007
Official recession watchers at the NBER said today that the U.S. is recession, and it began in December 2007. Here is the text of their statement. The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on Friday, November 28. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession
How to Care for Your Facial Skin
Good skin helps us 'face' the world with more confidence. It can even become a matter of good health.
Instructions
Step1 The first step in taking good care of your skin is to identify what kind of skin you have. Is it dry, normal, oily or have areas of more than one type?
Step2 For people with oily skin or acne, it is common to believe that constant washing will help. Unfortunately, this washes off the acid mantle that actually protects your skin and leaves it open to infection. Try for balance with you skin by using a toner.
Step3 As skin starts to age keeping it a consistent color will help it look younger. Increasing moisturizers, using pigmentation creams and increasing collagen and anti-oxidants will keep skin looking younger.
Step4 Sun damage is showing up at earlier ages than it used to. It creates a loss of tone. Melanocytes will normally start burning out in the skin in our 30's and 40's and these help protect from sun damage. Sunblock is important at any age, but becomes even more vital as our resistance to damage lowers.
Step5 Mature skin will have varying degrees of structural breakdown in loosing collagen and elasticity. Here come the wrinkles. Skin can also become dull and flaky so regular exfoliation will have a more noticeable impact. Retinoids and anti-oxidants can help rebuild skin somewhat. For major changes more intrusive methods can be used under the skin.
Step6 Everyone has their own skin type. It's part of each person's own 'look'. Try to appreciate your skin as it serves you well no matter how you judge it. So, whatever type of skin you have, it will look better and keep you healthier if you care for it well.
Instructions
Step1 The first step in taking good care of your skin is to identify what kind of skin you have. Is it dry, normal, oily or have areas of more than one type?
Step2 For people with oily skin or acne, it is common to believe that constant washing will help. Unfortunately, this washes off the acid mantle that actually protects your skin and leaves it open to infection. Try for balance with you skin by using a toner.
Step3 As skin starts to age keeping it a consistent color will help it look younger. Increasing moisturizers, using pigmentation creams and increasing collagen and anti-oxidants will keep skin looking younger.
Step4 Sun damage is showing up at earlier ages than it used to. It creates a loss of tone. Melanocytes will normally start burning out in the skin in our 30's and 40's and these help protect from sun damage. Sunblock is important at any age, but becomes even more vital as our resistance to damage lowers.
Step5 Mature skin will have varying degrees of structural breakdown in loosing collagen and elasticity. Here come the wrinkles. Skin can also become dull and flaky so regular exfoliation will have a more noticeable impact. Retinoids and anti-oxidants can help rebuild skin somewhat. For major changes more intrusive methods can be used under the skin.
Step6 Everyone has their own skin type. It's part of each person's own 'look'. Try to appreciate your skin as it serves you well no matter how you judge it. So, whatever type of skin you have, it will look better and keep you healthier if you care for it well.
Monday, December 1, 2008
How to Choose the Right Scent for Your Personality
Perfume is hundreds of years old. The Egyptians understood the power of the sense of smell and perfected the whole concept of "scent." However, they were not the only civilization to explore the sense of smell. Many believe that perfume is much older than we think, perhaps being used in very early religious rituals. Next to sight, the sense of smell is the most powerful to those seeking a base connection. It draws others to us because it evokes an essence about "who" we are as individuals. Choose the right scent and you just may draw the right individual to you. However, choose the wrong one and the results may not be so successful. So how do you go about choosing the right scent? Let's explore.
Instructions
Step1 Make a list of the scents that you particularly like such as fruits, spices, or florals. If you have specific favorites within those categories (like the smell of a rose or patouille spice) be sure to highlight them.
Step2 Make a list of the scents that you don't like. Be detailed.
Step3 If you already have perfumes on hand, take a look at the ones that you tend wear most often versus those that you barely wear at all. This will give you insight into your more subconscious scent preferences. For example, if you discover that you tend to wear more floral scents, that tells you something about yourself. On the other hand, if you tend use spicy scents, that says something else altogether. Or perhaps you even combine floral and spices together, which is another clue. On the other hand, if you find that you tend to avoid certain types of scents like floral-based or spice-based scents, that tells you that they likely do not reflect who you are as an individual.
Step4 If you haven't explored new perfumes in a while, take a trip to a local department store that has an extensive fragrance department. Better yet, if one is available in your area, visit a perfumery. Speak with a representative who is specifically trained in helping you to find the exact right scent for you. They will ask you questions about yourself and then steer you in the direction of scents that match. Or, in the case of a perfumery, they will help you to build your own personal scent(s). Ask for samples of your top choices if they are available. If not, often they can spray the scent choices on a card for you to make a temporary sample for further review. Pay attention to the price of the scent samples you choose since cost may ultimately have some kind of impact on your final choices.
Step5 Take your samples home and share them with people who know you well. Ask them to choose the sample scent that seems to reflect who they think you are as a person. If that matches with your own choice of scent then you likely have a winning fragrance. If, on the other hand, you get a lot of different responses, that may tell you that there are a lot of different sides to your personality and that finding a single signature scent may be virtually impossible. That need not be a bad thing, however, it will likely change the idea of a single signature scent.
Step6 Write down the attributes of your personality that best define you as an individual. If they remain virtually within a narrow corridor like "intelligent, serious, and sophisticated" or "bubbly, outgoing, and sensitive," then you may be able to find a single scent that will suit you. On the other hand, if your characteristics are all over the map, choosing a single scent to represent who you are may be much more difficult. Be sure to ask yourself if you respond to different scents at different times. For example, you love floral scents during the spring and summer when your sparkling personality is at its height. However, you prefer spicy musk-like scents in the fall and winter when you tend to be a bit more grounded and serious. You prefer lighter variations of the scent during the day and heavier versions when you're out on the town at night. That lets you know that purchasing a single purfume may not work for you because you won't likely wear it during the day since it will be too heavy.
Step7 Be honest with yourself about what you want your scent to accomplish. Is it just to reflect who you are as a person? Is it to lighten your mood or tone? Is it to attract others to you? Understanding what you want from your scent will help you to zero in on the one that may best help you accomplish that goal.
Step8 Match the personality attributes that you have written down and the things that you want to accomplish with your scent to the perfume samples that you have obtained. If there is a natural match, then that fragrance or fragrances may be just the ticket for you. Keep in mind, that you really don't have to be limited to a single scent. I personally have about a half dozen. There is one that I wear when I just want to be me. It is a light floral scent with a focus on gardenia. There is one that I wear when I want to draw my husband's attention. It is a clever mixture of floral (me) and spice (sex). There is one that I wear for professional occasions. It is light and fresh with a fruitier base that most people find less annoying. While obviously, if you can find a single scent that accomplishes everything, it may be less expensive that should not be your only reason for choosing it. If it is, you won't likely be happy with your choice.
Step9 Once you have narrowed your choice(s) down, then match that against the amount you are willing to spend on your signature fragrances. You may find that you can afford the parfume in some instances but only the eau de toillette in others. You must then decide if you can be happy with those selections. If so, then you are ready to make your purchases. If not, you may need to back up and start over by collecting some new samples and moving forward again.
Step10 Once you have made your scent choice, wear it for a period of time before deciding whether or not it really meets your requirements. Ask yourself the following questions. How does it make you feel? Does it adequately reflect who you are as an individual? Does it accomplish what you want from your scent? How does the scent mix with your personal body chemistry? Have your received compliments or complaints about it? I once wore a perfume called "Poison." I loved it. I thought it adequately reflected me as an individual; complex with both a rich floral and fruity scent. However, my friends were kind enough to tell me that the scent didn't work with my body chemistry; that it came across too strong. Consequently, I moved on to a similar scent that worked better overall for me as well as for those around me. If you are not ultimately happy with your choice over the long haul, then back up to Step 4 and start over.
Instructions
Step1 Make a list of the scents that you particularly like such as fruits, spices, or florals. If you have specific favorites within those categories (like the smell of a rose or patouille spice) be sure to highlight them.
Step2 Make a list of the scents that you don't like. Be detailed.
Step3 If you already have perfumes on hand, take a look at the ones that you tend wear most often versus those that you barely wear at all. This will give you insight into your more subconscious scent preferences. For example, if you discover that you tend to wear more floral scents, that tells you something about yourself. On the other hand, if you tend use spicy scents, that says something else altogether. Or perhaps you even combine floral and spices together, which is another clue. On the other hand, if you find that you tend to avoid certain types of scents like floral-based or spice-based scents, that tells you that they likely do not reflect who you are as an individual.
Step4 If you haven't explored new perfumes in a while, take a trip to a local department store that has an extensive fragrance department. Better yet, if one is available in your area, visit a perfumery. Speak with a representative who is specifically trained in helping you to find the exact right scent for you. They will ask you questions about yourself and then steer you in the direction of scents that match. Or, in the case of a perfumery, they will help you to build your own personal scent(s). Ask for samples of your top choices if they are available. If not, often they can spray the scent choices on a card for you to make a temporary sample for further review. Pay attention to the price of the scent samples you choose since cost may ultimately have some kind of impact on your final choices.
Step5 Take your samples home and share them with people who know you well. Ask them to choose the sample scent that seems to reflect who they think you are as a person. If that matches with your own choice of scent then you likely have a winning fragrance. If, on the other hand, you get a lot of different responses, that may tell you that there are a lot of different sides to your personality and that finding a single signature scent may be virtually impossible. That need not be a bad thing, however, it will likely change the idea of a single signature scent.
Step6 Write down the attributes of your personality that best define you as an individual. If they remain virtually within a narrow corridor like "intelligent, serious, and sophisticated" or "bubbly, outgoing, and sensitive," then you may be able to find a single scent that will suit you. On the other hand, if your characteristics are all over the map, choosing a single scent to represent who you are may be much more difficult. Be sure to ask yourself if you respond to different scents at different times. For example, you love floral scents during the spring and summer when your sparkling personality is at its height. However, you prefer spicy musk-like scents in the fall and winter when you tend to be a bit more grounded and serious. You prefer lighter variations of the scent during the day and heavier versions when you're out on the town at night. That lets you know that purchasing a single purfume may not work for you because you won't likely wear it during the day since it will be too heavy.
Step7 Be honest with yourself about what you want your scent to accomplish. Is it just to reflect who you are as a person? Is it to lighten your mood or tone? Is it to attract others to you? Understanding what you want from your scent will help you to zero in on the one that may best help you accomplish that goal.
Step8 Match the personality attributes that you have written down and the things that you want to accomplish with your scent to the perfume samples that you have obtained. If there is a natural match, then that fragrance or fragrances may be just the ticket for you. Keep in mind, that you really don't have to be limited to a single scent. I personally have about a half dozen. There is one that I wear when I just want to be me. It is a light floral scent with a focus on gardenia. There is one that I wear when I want to draw my husband's attention. It is a clever mixture of floral (me) and spice (sex). There is one that I wear for professional occasions. It is light and fresh with a fruitier base that most people find less annoying. While obviously, if you can find a single scent that accomplishes everything, it may be less expensive that should not be your only reason for choosing it. If it is, you won't likely be happy with your choice.
Step9 Once you have narrowed your choice(s) down, then match that against the amount you are willing to spend on your signature fragrances. You may find that you can afford the parfume in some instances but only the eau de toillette in others. You must then decide if you can be happy with those selections. If so, then you are ready to make your purchases. If not, you may need to back up and start over by collecting some new samples and moving forward again.
Step10 Once you have made your scent choice, wear it for a period of time before deciding whether or not it really meets your requirements. Ask yourself the following questions. How does it make you feel? Does it adequately reflect who you are as an individual? Does it accomplish what you want from your scent? How does the scent mix with your personal body chemistry? Have your received compliments or complaints about it? I once wore a perfume called "Poison." I loved it. I thought it adequately reflected me as an individual; complex with both a rich floral and fruity scent. However, my friends were kind enough to tell me that the scent didn't work with my body chemistry; that it came across too strong. Consequently, I moved on to a similar scent that worked better overall for me as well as for those around me. If you are not ultimately happy with your choice over the long haul, then back up to Step 4 and start over.
Perfume on the use
Perfume is a tricky solution that can smell different on different materials. Using the perfume right can be as easy as just smelling it. perfume on the right areas of your body can last longer. spraying perfume directly on to the skin is not advisable as it penetrates deeper and the chemicals can be a little allergic to some people. perfumes on that favorite dress can cause a stain, better avoid it while smelling great.
Instructions
Step1 Spray the perfume like a cloud in the air in front of you and just walk through the cloud for that subtleness.
Step2 spray perfume on to a cotton ball and dab it on behind the ear for your man to smell it just when he lowers to whispers into our ears.
Step3 Dab a little bit more on your wrist as the perfume lasts longer on the pulse points. Back of your knees, ankles.
Instructions
Step1 Spray the perfume like a cloud in the air in front of you and just walk through the cloud for that subtleness.
Step2 spray perfume on to a cotton ball and dab it on behind the ear for your man to smell it just when he lowers to whispers into our ears.
Step3 Dab a little bit more on your wrist as the perfume lasts longer on the pulse points. Back of your knees, ankles.
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