How to Build a Capsule Wardrobe

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There are so many fashion trends that come and go; but what does that mean for your pockets? You’re left overspending, making impulse decisions, or buying items because others are doing the same thing. Remember, fashion is a personal experience. It’s unique to each one of us as we all express our personal style in different ways. The cost of living along with everyday essentials are on the rise; what are a few ways to remain stylish while making sure it’s budget friendly? Use the following tips to build a classic wardrobe that’s always on trend – no matter the occasion.

What is a capsule wardrobe?

A capsule wardrobe consists of a set of tops, bottoms, outerwear, shoes, and various accessories that are versatile and can be mixed based on occasion to create a multitude of looks. The focal point of a capsule wardrobe is to own more on quality pieces that can transcend through the various seasons.

Ranging from between 25 – 75 pieces (or more; just depends on your preference) the key is to be able to identify all your clothing items easily and severely cut down on the time it takes to decide what you’re going to wear from day-to-day. Your new wardrobe should be able to reflect you personally while also remaining super functional.

Step 1: Take an assessment of your closet

Before we get started with hitting our favorite stores or buying everything online; take note of what’s currently in your closet. Begin to create a few mounds of clothes – keep, purge, and repurpose piles. What are the items that no longer fit? What items don’t necessarily fit your personal style anymore?

Be honest with yourself during this exercise. For example, if the clothes fit but you haven’t worn them within the past six months, chances are you may not be in love with them like you thought during the initial purchase. Also consider gently used clothes that are still in good shape to donate or sell to a consignment shop. The funds made from items already in your closet can go toward new pieces for your capsule wardrobe! Consider your current lifestyle as well – are you self-employed, working a 9-5 or a stay-at-home parent? All of this will impact your personal decisions as it relates to clothing.

To streamline this process even further, take pictures of the items you’re going to keep and have them all in one album on your phone. This way, you’re able to track each piece you have before making any new purchases. We often believe we have nothing to wear when it’s time to get dressed – when we really are just unsure of what we have. Reprogram your mind to utilize what you already have versus spending out of impatience and frustration.

Step 2: Identify your personal style and experiment

Social media exposes us to so many people, their personal styles and fashion inspirations. When you take a step back from everyone else’s thoughts and opinions; who inspires you? Create a mood board with outfits that pique your interest, that are classic in nature and are flattering to your body type. Ask yourself the following questions:

  • Are these pieces something I’m going to love years from now?
  • Will I feel confident no matter the occasion?
  • Does this fit my work and personal lifestyle?
  • Am I committed to investing in quality items?

Answering these truthfully are a great baseline to tailoring your wardrobe for you – regardless of what’s ever changing on social media. Next is the fun part; begin experimenting with what’s in your closet! Make sure all your items are in one area in your closet or buy a fashion rack so you’re able to easily identify your growing capsule wardrobe. Using either of these methods should not only cut down your decision time when getting dressed, it gives you the opportunity to create multiple looks with the same pieces. The main goal is functionality – make sure it’s adaptable to your lifestyle and its’ demands.

Step 3: Spend wisely and fight the urge against fast fashion

Quality over quantity is the mantra to live by when wanting to build a capsule wardrobe. Think about it in this way – how can you remain timeless while also having a distinct personal style?

When you’re looking for items to add to your capsule, focus on durability and quality. There’s no point in buying a lot of clothes that can’t withstand a few cycles in the washing machine (lack of quality) or shopping for one specific event (non-functional pieces). Refer to the pictures that’ve been taken of your current items so they’re handy during any shopping trip. Don’t forget to leverage consignment shops or thrift stores during this process. Bulkier, yet timeless items such as trench coats or vests with neutral colors can often be found. If you find that shopping for each season initially is too difficult, begin offseason shopping. During the summer, fall and winter clothes can be reduced heavily in price; use these opportunities as a cost savings.

Step 4: Take your time and have fun!

Transitioning from your current wardrobe to a fully functional one isn’t easy. Don’t overwhelm yourself with trying to finalize each piece in your closet over a designated amount of time. Not only is that not realistic, but it’s also expensive (which partly defeats the purpose) and stressful. This should be a fun, experimental, yet intentional time.

Take note of the outfits you enjoy the most. What about them makes you confident? You’ll discover you love every item in your closet versus simply dealing with pieces to complete an outfit. Take a note of items that may be currently missing from your wardrobe that can be worn at least three ways.

Taking this into account, you’ll be able to add those items into your rotation easily. Every purchase should be strategic and purposeful. While others are chasing trends that change every season, you’ll be peaceful and empowered with a wardrobe distinctly curated by you and your wants.

Save more, spend smarter, and make your money go further

Marsha Barnes

Marsha Barnes is a finance guru with over 20 years of experience dedicates her efforts to empower women worldwide to become financially thriving. Financial competency and literacy are a passion of Marsha’s, providing practical information for clients increasing their overall confidence in their personal finances. More from Marsha Barnes

Source: mint.intuit.com

Brace Yourself: The Price Tag on Cars is About to Go UP!

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If you’ve done any car shopping lately, this will come as no surprise: automobile prices are going through the roof. Unfortunately, that trend doesn’t appear to be slowing down any time soon.

We’ll walk you through the factors driving this sharp increase, and give you some tips on how to avoid blowing up your budget when buying a car.

How Car Prices are Changing

Research from CarGurus.com found that used car prices are up more than 30% from June 2020. Prices have been steadily rising since the Covid-19 pandemic, and numbers have never been this high.

Not all brands are increasing at the same rate. For example, Tesla has only increased by 6% in the past year while Ram trucks have increased 40.5%. You can find a complete list of car manufacturers and their year-over-year increases here.

Why Car Prices are Going Up

Global supply chains were disrupted during the pandemic last year, and many car manufacturers did not produce as many vehicles as they normally would. The influx of stimulus checks and mass avoidance of public transit caused more people to buy cars, further limiting the available car supply.

Since 2020, there has been a global chip shortage causing massive delays for automakers. The average car can have hundreds of these chips, which explains why automobile production has slowed down even as other industries have begun to ramp back up.

How to Budget for Higher Car Prices

If you need to buy a car right now, prepare to pay higher prices than you might have paid a year or two ago.

Here’s how to plan ahead:

Look at your overall budget

Whether you’re planning to buy a car in cash or take out a loan, you should look at your budget to see how much you can afford to pay.

Because prices for other goods are also rising, it’s important to allow some flexibility in your budget. Don’t buy the most expensive car you can afford, and don’t raid your savings to pay for it. While the economy seems to be rebounding, you should still keep a sizable emergency fund in case of future layoffs or furloughs.

Compare interest rates

According to Bankrate.com, interest rates for auto loans are the lowest they’ve been since 2015. If you’re getting a car loan, one of the most important factors is the interest rate and APR. The interest rate affects your monthly payments and the total amount of interest paid over the life of the loan.

Start by getting quotes from your current bank, and then get outside quotes from other banks, credit unions, and auto lenders. Compare the APR and not just the interest rate. The APR is the more comprehensive number, reflecting both the interest rate and any fees.

Get the most for your trade-in

Because used car prices are going up, you will likely earn more for your trade-in than you would have in the past. Look up your car’s value on Kelley Blue Book and Edmunds.com to see what it’s worth.

Then, maximize your trade-in value by getting multiple quotes from dealerships and listing your car for sale on sites like eBay, Craigslist, and Cars.com. You’ll earn more from a private seller but may have to deal with flaky buyers. If you’re selling a car to an individual, you’ll also need to verify that the check or cash you receive is legitimate.

When selling to a dealership, try to leverage quotes from multiple dealers against each other to create a bidding war. Remember that inventory for used cars is low, so many companies are willing to pay more than you might expect for a used car.

Get a longer-term loan

If you can’t afford to pay for the car in cash, a car loan is your next best option. Car loan terms range from 24 to 84 months, and interest rates generally increase as the term gets longer. Because car prices are higher right now, you may need a longer loan term to end up with monthly payments you can comfortably afford. Use a car loan calculator and play around with the numbers to find your upper loan limit.

Here’s how the monthly payments can change depending on the term. Let’s say you receive two quotes from an auto lender for a $20,000 car. The first option is a three-year term with a 5% interest rate and a $582 monthly payment. The second option is a six-year term with a 6% interest rate and a $331 monthly payment.

You review your budget and determine that the maximum amount you can afford each month is $350. In this case, you would be better off choosing the six-year term with the higher interest rate.

It’s better to have a payment you can easily make every month than a lower interest rate and less wiggle room in your budget. You can always make extra payments on the car loan to pay it off faster if your income increases. Most auto lenders don’t charge a prepayment penalty, so there’s no extra fee if you repay the loan ahead of schedule.

Budget for car insurance

If you’re about to buy a new car, call your car insurance provider and ask them what the new monthly premium will be. In most cases, buying a newer car will increase your premiums because it will cost more to replace if there’s an accident.

But if your new car has additional safety features that could reduce the chances of an accident, then your premiums may not change as much. Still, it’s better to find out now what the premium will be instead of after you’ve bought the car.

Bottom Line

It’s impossible to predict where prices may be in the future. If you don’t need to buy a car right now, you might be better off waiting a few months to see if prices cool off.

Save more, spend smarter, and make your money go further

Zina Kumok

Zina Kumok is a freelance writer specializing in personal finance. A former reporter, she has covered murder trials, the Final Four and everything in between. She has been featured in Lifehacker, DailyWorth and Time. Read about how she paid off $28,000 worth of student loans in three years at Conscious Coins. More from Zina Kumok

Source: mint.intuit.com

Walmart Q1 Earnings Likely Boosted By Inflation

The latest consumer price index (CPI) released last week indicates inflation remained sky-high in April. And while rising prices were a headwind for most companies in the first three months of 2022, they likely served as a tailwind for mega-retailer Walmart (WMT, $147.48).

Wall Street will find out this week, with WMT an early entrant on the earnings calendar; WMT will report its first-quarter results ahead of the May 17 open. 

The consumer staples stock has shown resilience amid the recent market volatility, up roughly 2% for the year-to-date compared to a more than 17% decline for the broader S&P 500.  

WMT beat on both the top and bottom lines in its fourth quarter thanks in part to its ability to keep prices competitive in a high-inflation environment. And this trend probably continued in Q1, despite a challenging backdrop, says UBS Global Research analyst Michael Lasser (Buy).

“With low prices as its core value proposition, WMT is uniquely positioned to benefit from rising inflation,” the analyst adds. “Its scale helps give it the ability to keep healthy price gaps versus its peers, which can help it achieve further share gains in the grocery channel.  

While Lasser admits there will likely be some “moving pieces” in the report – including unpredictability related to macro headwinds – components such as U.S. same-store sales and full-year guidance will be good.

“We view WMT’s shares as compelling as they offer more certainty than others in this uncertain backdrop,” the analyst says.

Amid tough year-over-year (YoY) comparisons that include last year’s stimulus-related pop, consensus estimates are for Walmart to report a 12.4% drop in earnings to $1.48 per share. Revenue is expected to arrive at $138.8 billion (+0.4% YoY).

Lowe’s Faces Tough Comps in Q1

First-quarter earnings from Lowe’s (LOW, $191.70) are due out before Wednesday’s open. Similar to Walmart, the home improvement retailer is facing hard comparisons from Q1 2021. 

As such, analysts, on average, are calling for a slim 0.9% YoY rise in earnings to $3.24 per share. And revenue is projected to be flat at $23.8 billion.

Still, Lowe’s entered 2022 with momentum following a solid fourth-quarter print, says UBS Global Research analyst Michael Lasser (Buy). 

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Additionally, the consumer discretionary name raised its full-year guidance in February. This reflects an inflation tailwind due to LOW’s “prudent pricing power” that will likely last for at least a few more quarters, the analyst adds. 

“We believe LOW is building a track record of solid execution with every passing quarter,” Lasser says. “Plus, it has several unique drivers to propel its results in the next few years independent of the market growth.”

Kohl’s Top and Bottom Lines Probably Contracted in Q1

Kohl’s (KSS, $47.51) will report its first-quarter earnings ahead of the May 19 open. 

The department store chain ended 2021 with record adjusted earnings of $7.33 per share and year-over-year revenue growth of 21.8% to $19.4 billion.

And Deutsche Bank analyst Gabriella Carbone (Buy) thinks the company is just getting started. “KSS has laid the groundwork for growth along with improving profitability, and is a more nimble company today than it was pre-pandemic,” Carbone says.

Included in the company’s plans to drive growth are goals for Kohl’s to reach $2 billion in sales from its partnership with beauty company Sephora and expand its operating margin to a range of 7% to 8%.

Carbone adds that these goals “may prove to be prudent as management has greatly considered a number of headwinds,” including supply-chain woes and a tight labor market.

As for the retail stock’s first-quarter results, analysts, on average, expect earnings to arrive at 72 cents per share (-31.4% YoY) and revenue to land at $3.7 billion (-0.5% YoY).

In addition to the company’s financial results, Wall Street will be looking for additional updates on the company’s strategic initiatives. Last Wednesday, shareholders voted on Kohl’s new slate of directors, rejecting an attempt from Macellum Advisors to add its nominees to the board. The activist investor has been pushing KSS to make changes, including unloading some of its real estate and putting itself up for sale.

Source: kiplinger.com

What Is Inflation (Definition) – Causes & Effects of Rate on Prices & Interest

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Additional Resources

People have always grumbled that a dollar doesn’t go as far as it used to. But these days, that complaint is truer than ever. No matter where you go — the gas station, the grocery store, the movies — prices are higher than they were just a month or two ago.

What we’re seeing is the return of a familiar economic foe: inflation. Many Americans alive today have never seen price increases like these before. For the past three decades, inflation has never been above 4% per year. But as of March 2022, it’s at 8.5%, a level not seen since 1981.

Modest inflation, like what we had up through 2020, is normal and even healthy for an economy. But the rate of inflation we’re seeing now is neither normal nor healthy. It does more than just raise the cost of living. It can have a serious impact on the economy as a whole. 

Recent inflation-related news:


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  • In March 2022, the U.S. inflation rate hit a 40-year high of 8.5%. 
  • Prices for gasoline have increased nearly 50% over the past year.
  • Retail giant Amazon has added a 5% fuel and inflation surcharge for sellers.
  • The Federal Reserve is planning a series of interest rate hikes to cool the overheated economy.

What Is Inflation?

Inflation is more than just rising prices. Prices of specific things we buy, from a gallon of milk to a year of college tuition, rise and fall all the time. These price increases affect individual consumers’ lives, but they don’t have a big impact on the entire economy.

Inflation is a general increase in the prices of goods and services across the board. It drives up prices for everything you buy, from a haircut to a gallon of gas. Or, to put it another way, the purchasing power of every dollar in your pocket declines.

Most of the time, inflation doesn’t disrupt people’s lives too much, because prices rise for labor as well. If your household spending increases by 5% but your paycheck increases by 5% at the same time, you’re no worse off than before.

But when prices rise sharply, wages can’t always keep up. That makes it harder for consumers to make ends meet. It also drives them to change their spending behaviors in ways that often make the problem worse.


Causes of Inflation

Inflation depends on the twin forces of supply and demand. Supply is the amount of a particular good or service that’s available. Demand is the amount of that particular good or service that people want to buy. More demand drives prices up, while more supply drives them down. 

To see why, suppose you have 10 loaves of bread to sell. You have 10 buyers who want bread and are willing to pay $1 per loaf. So you can sell all 10 loaves at $1 each.

But if 10 more buyers suddenly enter the market, they will have to compete for your bread. To make sure they get some, they might be willing to pay as much as $2 per loaf. The higher demand has pushed the price up.

By contrast, if another seller shows up with 10 loaves of bread, the two of you will be competing for buyers. To sell your bread, you might have to lower the price to as little as $0.50 per loaf. The higher supply has pushed prices down.

Inflation results from demand outstripping supply. Economists often describe this as “too much money chasing too few goods.” There are several ways this kind of imbalance can happen.

Cost-Push Inflation

Cost-push inflation happens when it costs more to produce goods. To go back to the bread example, cost-push inflation might happen because a wheat shortage makes flour more expensive. It costs you more to make each loaf of bread, so you can’t afford to bake as much.

As a result, you bring only five loaves to the market. But there are still 10 customers who want to buy bread, so they must pay more to get their share. The higher cost of production drives down the supply and thus drives up the price.

In the real world, cost-push inflation can result from higher costs for anything that goes into making a product. This includes:

  • Raw Materials. The wheat that went into your bread is an example. Higher-cost wheat means higher-cost flour, which means higher-cost bread.
  • Transportation. In today’s global economy, materials and finished goods move around a lot. Transporting products requires fuel, which usually comes from oil. So whenever oil prices go up, the price of other goods rises as well. 
  • Labor. Another factor in production cost is labor. When schools closed during the COVID-19 pandemic, many parents had to stop working to care for their children. That created a worker shortage that drove prices up.

Demand-Pull Inflation

The opposite of cost-push inflation is demand-pull inflation. It occurs when consumers want to buy more than the market can supply, driving prices up.

Typically, demand-pull inflation results from economic growth. Rising wages and lower levels of unemployment put more money in people’s pockets, and people who have more money want to spend more. If the booming economy hasn’t produced enough goods and services to match this new demand, prices rise.

Other causes of demand-pull inflation include: 

  • Increased Money Supply. Another way people can end up with more money in their pockets is because the government has put more money in circulation. Governments often do this to stimulate a weak economy or to pay off past debts. But as the money supply increases, the purchasing power of each dollar shrinks. 
  • Rapid Population Growth. When the population grows rapidly, the demand for goods and services grows also. If the economy doesn’t produce more to compensate, prices rise. In Europe during the 1500s and 1600s, prices soared as the population grew so fast that agriculture couldn’t keep up with the new demand.
  • Panic Buying. Early in the COVID pandemic, consumers started buying extra groceries to fill their pantries in preparation for a lockdown. This led to shortages of many staple products, like milk and toilet paper. As a result, prices for those goods went up.
  • Pent-Up Demand. This occurs when people return to spending after a period of going without. This often happens in the wake of a recession. It also occurred as pandemic restrictions eased and people returned to enjoying movies, travel, and restaurant meals.

Built-In Inflation

When consumers expect prices to be higher in the future, they often respond by spending more now. If the purchasing power of their savings is only going to fall, it makes more sense to take that money out of the bank and use it on a major purchase, like a new car or a large appliance.

In this way, expectations of high inflation can themselves lead to inflation. This type of inflation is called built-in inflation because it builds on itself. 

When workers expect the cost of living to rise, they demand higher wages. But then they have more to spend, so they spend more, driving prices up. This, in turn, reinforces the belief that  prices will keep rising, leading to still higher wage demands. This cycle of rising wages and prices is called a wage-price spiral.


Effects of Inflation

Inflation does more than just drive up the cost of living. It changes the economy in a variety of ways — some harmful, others helpful. The effects of inflation include:

  • Higher Wages. As prices rise with inflation, wages typically rise as well. This can create a wage-price spiral that drives inflation still higher.
  • Higher Interest Rates. When the dollar is declining in value, banks often respond by raising interest rates on loans. The Federal Reserve also typically raises interest rates to cool the economy and rein in inflation, as discussed below.
  • Cheaper Debt. Inflation is good for debtors because they can pay off their debts with cheaper dollars. This is most useful for loans with a fixed interest rate, such as fixed-rate mortgages and student loans.
  • More Consumption. Inflation encourages consumers to spend money because they know it will be worth less later. All this spending keeps the economy humming, but it can also drive prices even higher.
  • Lower Savings Rates. Just as inflation encourages spending, it discourages saving. Higher interest rates can counter this effect, but they often don’t rise enough to make a difference.
  • Less Valuable Benefits. High inflation is worse for people on a fixed income. They face higher prices without higher wages to make up for them. Benefits such as Social Security change each year to adjust for inflation, but higher benefits next year don’t help when prices are rising right now.
  • More Valuable Tangible Assets. Inflation reduces the purchasing power of the dollars you have in the bank. Tangible assets like real estate, however, gain in dollar value as prices rise.

Measuring Inflation

The most common measure of inflation is the Consumer Price Index, or CPI. The Bureau of Labor Statistics (BLS) determines the CPI based on the cost of an imaginary basket of goods and services. BLS workers painstakingly check prices on all these items each month and record how each price changes.

To calculate the annual rate of inflation, the BLS looks at how much all prices in its basket have changed since a year earlier. Then it “weights” the value of each item based on how much of it people buy. The weighted average of all items becomes the CPI.

The BLS then uses the CPI to calculate the annual rate of inflation. It divides this month’s CPI by the CPI from a year ago, then multiplies the result by 100. This shows how the purchasing power of a dollar has changed over the last year. The result is reported monthly.

Other measures of inflation include:

  • Personal Consumption Expenditures Price Index (PCE). This inflation measure is published by the Bureau of Economic Analysis. Like the CPI, it’s a measure of consumer costs, but it’s adjusted to account for changes in the products people buy. The Federal Reserve uses the PCE to guide its monetary policy, as discussed below. 
  • Producer Price Index (PPI). The PPI measures inflation from the seller’s perspective, not the buyer’s. It’s calculated by dividing the price sellers currently get for a basket of goods and services by its price in a base year, then multiplying the result by 100.

Historical Examples of Inflation

A little bit of inflation is normal. But sometimes inflation spirals out of control, with prices rising more than 50% per month. This is called hyperinflation, and it can be devastating for an economy.

Hyperinflation has occurred at various times and places throughout history. During the U.S. Civil War, both sides experienced soaring inflation. Other examples include Germany in the 1920s, Greece and Hungary after World War II, Yugoslavia and Peru in the 1990s, and Venezuela today. In most cases, the main cause was the government printing money to pay for debt. 

The last time the U.S. had prolonged, high rates of inflation was in the 1970s and early 1980s. The inflation rate was nowhere near hyperinflation levels, but it spiked above 10% twice. Eventually, the Fed hiked interest rates to double-digit levels to get it under control.

Although high inflation can be destructive, zero inflation isn’t a good thing, either. At that point, an economy is at risk of the opposite problem, deflation. 

When prices and wages fall across the board, consumers spend less. Sales of products and services fall, so companies cut back staff or go out of business. As a result, jobs are lost and spending drops still more, worsening the problem. The Great Depression was an example.


The Federal Reserve, or Fed, is the U.S. central bank — or more accurately, banks. It’s a group of 12 banks spread across the country under the control of a central board of governors. Its job is to keep the economy on track, reining in inflation while trying to avoid recessions. 

The Fed maintains this balance through monetary policy, or controlling the availability of money.

Its main tool for doing this is interest rates. When the economy is weak, the Fed lowers the federal funds rate. This makes it easier for people to borrow and spend. 

When the problem is inflation, it does the opposite, raising interest rates. This makes it more costly to borrow and more worthwhile to save. As a result, consumers spend less, slowing down the wage-price spiral.

The Fed has other tools for fighting inflation as well. One option is to change reserve requirements for banks, requiring them to hold more cash. That gives them less to lend out, which in turn reduces the amount consumers and businesses have to spend.

Finally, the Fed can reduce the money supply directly. The main way it does this is to increase the interest rate paid on government bonds. That encourages more people to buy bonds, which temporarily takes their money out of circulation and puts it in the hands of the government.


Inflation Frequently Asked Questions (FAQs)

If you keep seeing stories about inflation in the news, you may have some other questions about how it works. For instance, you may wonder:

What Is Hyperinflation?

Hyperinflation is more than just high inflation. It’s a wage-price spiral gone mad, sending prices soaring out of control. As noted above, the usual definition of hyperinflation is an inflation rate of at least 50% per month — more than 12,000% per year. However, some economists use the term to refer to an inflation rate of 1,000% or more per year.

What Is Disinflation?

Disinflation is a fall in the rate of inflation. This is what the Federal Reserve and other central banks try to achieve through their monetary policy, such as raising interest rates.

Disinflation is not the same as deflation, or falling prices. During a period of disinflation, prices are continuing to rise, but the rate at which they rise is slowing down.

What Is Transitory Inflation?

When the first signs of a post-COVID-19 inflation spike appeared, Federal Reserve chair Jerome Powell described it as “transitory.” By this, he meant that the rise in prices would be short-lived and would not do permanent damage to the economy. 

However, in November 2021, Powell declared it was “time to retire that word.” Based on the growth in prices, he had concluded that inflation was more of a long-term trend. The Federal Reserve responded by planning to fight inflation harder, buying more bonds and plotting out a series of interest rate hikes.

What Is Core Inflation?

Measuring inflation can be tricky because prices for some products fluctuate more than others. Food and energy prices, in particular, can shift a lot from month to month. Including these products in the CPI can lead to sharp, but temporary, spikes or dips in the inflation rate.

To adjust for this, the CPI and PCE have a separate “core” version that doesn’t include food or energy prices. This core inflation measure is more useful for predicting long-term trends. The  main versions of the CPI and PCE, known as the “headline” versions, give a more accurate picture of how prices are changing right now.

What Is the Consumer Price Index (CPI)?

As noted above, the Consumer Price Index, or CPI, is the main measure of inflation in the United States. The BLS calculates it based on how much prices have risen for an imaginary basket of goods and services that many Americans buy.


Final Word

A little inflation in an economy is normal. It can even be a good thing, because it’s a sign that consumers are spending and businesses are earning. The Fed generally considers an annual inflation rate of 2% to be healthy.

However, higher inflation can cause serious problems for an economy. It’s bad for savers whose nest eggs, including retirement savings, shrink in value. It’s even worse for seniors and others on fixed incomes whose purchasing power has fallen. And it often requires strong measures from the central bank to correct it — measures that risk driving the economy into a recession.

If you’re concerned about the effects of inflation, there are several ways to protect yourself. You can adjust your household budget, putting more dollars into the categories where prices are rising fastest. You can stock up on household basics now, before the purchasing power of your dollars falls too much. 

Finally, you can choose investments that do well during periods of inflation. Stock-based mutual funds and real estate investment trusts are both good choices. Just be careful with inflation hedges like gold and cryptocurrency, which carry risks of their own.

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

Amy Livingston is a freelance writer who can actually answer yes to the question, “And from that you make a living?” She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.

Source: moneycrashers.com

Corporate Social Responsibility (CSR), Explained

Corporate social responsibility, or CSR, is a type of self-regulation that a business uses to enhance the well-being of communities and society through ethical, environmental, and social measures.

By investing in companies that practice CSR, investors have the opportunity to use their own wealth-building strategies to make a positive impact on the world.

What is Corporate Social Responsibility?

Corporate social responsibility (CSR) refers to a company’s dedication to establishing business decisions that positively impact society. Usually, these business decisions support socially responsible movements, like environmental sustainability, ethical labor practices, and social justice initiatives.

Ideally, CSR strategies work in tandem with the traditional business objectives of hitting revenue and profit goals, and other metrics investors may find on a financial statement.

There is no codified set of standards that explain corporate social responsibility. Companies choose to enact CSR policies on their own initiative. It can take many forms depending on a company or an industry, but generally, CSR policies promote economic, social, and environmental sustainability.

However, the International Organization for Standardization (ISO) released guidelines for corporate social responsibility in 2010. Known as ISO 26000:2010 , these guidelines are suggestions, not requirements, that can help put companies on track to further CSR principles.

Why CSR Is Important

Corporate social responsibility is important because companies can use their financial position and operations to build more ethical business models and a better world. When the companies enact socially responsible policies prosper, those practices become more commonplace and widespread.

Additionally, investors increasingly focus on more than traditional business valuation methods when making investment decisions. Investors want to put money into companies that support socially responsible movements, so they may be attracted to companies with CSR policies.

In other words, investing in companies that practice corporate social responsibility gives investors the chance to vote with their wallets on how they want the companies around them to behave.

Recommended: What is ESG Investing?

4 Types of Corporate Social Responsibility

Corporate social responsibility is an umbrella term that captures a wide array of policies that a company can enact. CSR-focused companies may target their efforts on one or more specific social, economic, or environmental areas of concern. The following are some of the most common areas of CSR:

1. Environmental Sustainability

Companies are increasingly focusing on environmental sustainability when making business decisions. With climate change threatening to cause severe impacts worldwide, companies are committing to creating sustainable production methods, distribution, and overall business practices to reduce carbon footprints.

For investors, sustainable investing could mean seeking out companies that promise to hold to sustainable business practices—and doing the research to ensure they’re keeping that promise in real life. Additionally, it could mean focusing on companies that are specifically involved in creating the products that allow for environmental sustainability in the long term, such as renewable energy, biofuels, or hybrid cars.

Recommended: How to Invest in EV Stocks

2. Philanthropy

One of the ways large companies might align themselves with CSR values is by supporting philanthropic efforts. By donating money, products, or services to nonprofit organizations and social causes, a company can show the public what it values and how its furthering causes.

Recommended: How to Make End-of-Year Donations

3. Ethical Labor Practices

Corporations that commit to ethical labor practices, such as focusing on diversity and inclusion or having a zero-tolerance policy on sexual harassment, may garner more favor among investors looking to support a socially responsible company.

Recommended: How to Combine Financial Well-Being and Diversity and Inclusion Initiatives

4. Volunteering

Another way almost any business can get in on CSR might be to support local volunteering efforts by sending out their representatives or fundraising for other volunteering organizations and movements.

Companies might also support volunteerism by offering their employees paid time off specifically for that activity. Some companies provide employees several days off per year, which they can use to participate in any volunteering effort they choose.

Recommended: 34 Charities To Support This Year

Examples of CSR

Many companies have enacted corporate social responsibility initiatives, and the trend is growing. According to one study, 92% of companies in the S&P 500 published sustainability in 2020, up from 20% in 2011. Here are a few examples of CSR policies at large corporations:

•   Starbucks (SBUX): The coffee giant has committed to hiring a diversified workforce, including hiring thousands of veterans, refugees, and disadvantaged youth.

•   Levi Strauss (LEVI): The apparel maker launched the Levi’s® Music Project, an initiative that looks to provide young people with music education and community resources.

•   Ford Motor Company (F): The carmaker is pushing to have 50% of its global sales be electric vehicles (EV) by 2030 to help address climate change.

•   Salesforce (CRM): The software company says it has given about $240 million in grants, 3.5 million hours of community service, and provided donations to more than 39,000 nonprofits and education institutions.

•   The Coca-Cola Company (KO): The beverage company is focusing on water conservation, saying it will push to responsibly use water in its production process and advocate for smart water policies.

Benefits of Corporate Social Responsibility

There are many reasons for a company to adopt and execute corporate social responsibility policies. First and foremost, CSR practices help promote a relatively better society and environment. By following socially responsible protocols, companies could have the opportunity to make significant social, economic, and ecological changes. As noted above, investors are increasingly looking to put money into companies that adhere to CSR.

Beyond these direct positives, CSR policies can also boost a company’s competitiveness by benefiting the firm in the following ways:

•   Stronger brand image: Corporate social responsibility policies can help create a positive image for a company, attracting consumers, employees, and other stakeholders.

•   Employee retention: Talented employees may stay with a company longer when they feel they are working for a business that has strong CSR policies. Additionally, this reputation can help attract new employees.

•   Reduced regulatory burden: A comprehensive CSR policy can help a company navigate relationships with regulatory bodies, especially as governments establish more rules around sustainability.

The Takeaway

Corporate social responsibility is one of several business models companies are using to navigate a changing world. By investing in companies that support those practices, investors could have the opportunity to positively impact the world while also potentially building their nest eggs.

However, it can take a lot of work for investors to determine what companies have the best CSR policies and what companies are truly adhering to their initiatives. So if you want to invest in companies that support CSR policies, it may be best to start small rather than build a whole portfolio around CSR stocks.

SoFi Invest® allows you to start investing today and build a portfolio with whatever strategy you desire. With active investing, you can trade stocks of brands you know and believe in and discover new opportunities based on your interests along the way.

Get started today with SoFi Invest.


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8 Facts You Must Know About Bear Markets

There are few things scarier than a bear market, but steep and sustained drawdowns in stocks are an absolute fact of investing life. Markets go through cycles; always have, always will. 

It’s also true that despite being inevitable and unpleasant, bear markets are not entirely all bad. An irony of bear markets is that they’re one of the exceedingly rare times when long-term retail investors can actually have an advantage over the pros.

Traders and tacticians are under constant pressure to do something, even as a receding tide lowers all boats. Contrast that with retail investors, who are luxuriously free from clients yelling at them all day. Normies can just sit back and dollar-cost average into stocks at increasingly cheaper prices.

Most importantly, a patient long-term investor who is diversified in accordance with his or her age, stage in life and risk tolerance can not only wait out a bear market, but profit from it. Remember: The market can be miserable at times, but its long-term trend is always to the up and right.

A familiarity with the basics of bear markets should help investors better cope with the next one. To that end, we’ve compiled the following eight facts you must know about bear markets.

1 of 8

Why Is It Called a Bear Market?

what is a bear marketwhat is a bear market

It has nothing to do with the way bears sneak up on their prey and attack suddenly, in the same way that bear markets feast on investors. Neither is it because bears are notorious for ransacking campsites and stealing provisions, in the same way bear markets can destroy your financial well-being.

Though both would be fitting.

Believe it or not, the term “bear market” originates with pioneer bearskin traders. The country’s early traders would sell skins they’d not yet received – or paid for. Because the traders hoped to buy the fur from trappers at a lower price than what they’d sold it for, “bears” became synonymous with a declining market.

There is, however, an alternative explanation, according to Wall Street lore: A bear attacks by swiping its claws downward, similar to the downward trend of a declining market.

2 of 8

What Is a Bear Market, Anyway?

A 3D rendering of S&P 500 stocks heading lowerA 3D rendering of S&P 500 stocks heading lower

First, let’s look at what a bear market is not.

It’s not when stock prices end lower in the majority of trading days within a 90-day period. Neither is it a condition proclaimed by the National Bureau of Economic Research. And it is certainly not when at least two major business publications proclaim a bear market on their magazine covers.

Rather, a bear market is when a broad market index, such as the S&P 500, falls 20% or more from its peak.

There still is some debate among market watchers about whether the downturn that lasted from July 16 to Oct. 11, 1990, was officially a bear. The S&P fell 19.9% during that period. And the 2018 correction that lopped 19.8% off the S&P 500 was within rounding distance of a bear market. Since 1929, S&P 500’s average bear-market decline stands at 33.5%, according to Dow Jones Market Data. The median drawdown comes to 33.2%.

3 of 8

How Often Do Bear Markets Occur?

bear hiding in tall grassbear hiding in tall grass

Since 1932, bear markets have occurred, on average, every 56 months (about four years and eight months), according to S&P Dow Jones Indices.

The Nasdaq Composite index entered a bear market on March 7, when it closed 20% below its Nov. 19, 2021, high. The S&P 500, for its part, set a high of 4,976.56 on Jan. 3. Thus, any close at 3,837.25 or lower puts the benchmark index into an official bear market.

4 of 8

What Is Least Likely to Cause a Bear Market?

Tank against Ukraine flagTank against Ukraine flag

A number of events can lead to a bear market: higher interest rates, rising inflation, a sputtering economy, military conflict or geopolitical crisis are among the usual suspects. But which is the rarest?

Fortunately, military or geopolitical shocks to the market have been mostly fleeting. Two of the longest downturns followed the attack on Pearl Harbor in 1941 (308 days) and Iraq’s invasion of Kuwait in 1990 (189 days).

But the average time to the market bottom after such events, which also include the terrorist attacks on the U.S. in 2001 and the North Korean missile crisis of 2017, is 21 days, with a full recovery in 45 days, on average.

5 of 8

Bear Markets Don’t Automatically Equal Recessions

what is a bear marketwhat is a bear market

There are actually two types of bear markets: recessionary and non-recessionary. 

Bear markets often precede or coincide with economic downturns, which is part of what makes them so scary. Happily, there are almost as many instances of past bear markets in which stocks tanked but the economy did not. 

Since 1928, 14 bear markets heralded or happened during recessions, notes Ben Carlson, director of institutional asset management at Ritholtz Wealth Management. However, another 11 bear markets since 1928 had nothing to do with recession. 

Surprise, surprise: Bear markets that occur outside of recessions tend to be shallower and shorter. 

6 of 8

What Was the Worst Bear Market of All Time?

what is a bear market in stockswhat is a bear market in stocks

Contrary to popular belief, the worst bear market on record was not the 2007-09 crash when the financial crisis ushered in the Great Recession.

Neither was it the tech wreck of 2000 when dot-com stocks collapsed.

The drawn-out decline from the start of 1973 through the fall of 1974 – during which the Arab oil embargo sent oil prices soaring, the so-called Nifty-Fifty stocks sank, and Richard Nixon resigned the presidency – doesn’t take the cake either.

Rather, the bear market that began just ahead of Black Monday that precipitated the Crash of 1929 was the worst one to date.

The bear market from September 1929 to June 1932 resulted in an 86.2% loss for the S&P. Those other historical examples aren’t even close, with losses of 56.8% in 2007-09, 49.1% in 2000-02 and 48.2% in 1973-74.

Indeed, it took the market more than two decades to recover from the 1929-32 slump. Stocks didn’t regain their prior peak until 1954. 

7 of 8

How Long Do Bear Markets Last?

Calendar and hourglass on office desk table. With copy space. Shot with ISO64.Calendar and hourglass on office desk table. With copy space. Shot with ISO64.

Ask a random sample of investors and some folks might guess that it’s a year or less. Others will figure it’s a minimum of two years. Regardless of duration, a bear market usually feels like it lasts forever.

And yet the average length of a bear market since 1929 is just 9.6 months, according to Ned Davis Research. True, those months will be agonizing, but consider the bright side: bears don’t live as long as bulls. Indeed, since 1929, the average lifespan of a bull market is 2.7 years.

8 of 8

Good and Bad Investments for Getting Through a Bear Market

Wall Street sign bear market Wall Street sign bear market

What’s the best investment for a bear market? Is it U.S. Treasury bonds? Or perhaps gold or gold funds? How about classically defensive plays including utilities, consumer staples companies and healthcare companies? Or perhaps the highest-growth stocks with the broadest following?

When stocks are in free fall and worries about the economy abound, there’s nothing more soothing than the full faith and credit of the U.S. government. And a “flight to quality” often leads to gains in U.S. Treasury bonds. In 2008, the Bloomberg Barclays US Aggregate Bond Index – a broad-based, high-quality fixed-income benchmark – gained 5%, making it the only U.S. financial asset in the black that year.

Defensive stocks will lose ground in a bear market, but tend to lose less than average, supported by steady demand for their products and, often, generous dividends. Gold, which Kiplinger recommends as a portfolio diversifier only in small amounts, often zigs upward when stocks zag downward.

As for the worst place to hide out in a bear market, it’s the highest-growth stocks with the broadest following. Indeed, these stocks can be among the worst performers in a bear market if their popularity led them to have outsized gains before everything collapsed. The higher they fly, the harder they fall.

Source: kiplinger.com

What Is the MACD Indicator (Moving Average Convergence Divergence)?

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Additional Resources

Traders use a wide range of technical indicators to generate trading signals when making their moves in financial markets. These indicators help traders analyze price action to determine price trends, the momentum of those trends, the best time to buy, and the best time to sell financial assets. 

The moving average convergence divergence indicator (MACD indicator) is one of the most popular tools in a trader’s toolbox. 

The tool is a momentum indicator built under the idea that momentum changes happen ahead of price changes. The idea is that traders can track and analyze the momentum of price movements to determine where the value of the asset is likely headed in the future. 


What Is the Moving Average Convergence Divergence (MACD) Indicator?

The MACD is a momentum oscillator that shows the relationship between two moving averages of a financial asset’s price. Those moving averages include the 26-day exponential moving average (EMA) and the 12-day EMA. Traders also use a signal line with this indicator which is plotted using a 9-day EMA of the MACD. Gerald Appel, founder of the Systems and Forecasts newsletter, developed the indicator in the late 1970s. 


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It’s important that you understand moving averages before going further, because they are the building blocks that form the MACD and the signals it generates. 

Moving averages reveal average prices over time. At the close of every trading session, the new closing price is added into the calculation and the oldest is removed, helping smooth the volatility of price movement in the trading chart.

The MACD uses exponential moving averages (EMAs). EMAs are time-weighted averages, meaning the newest data is given more importance than older data. This makes them more sensitive to the most recent price movements. 


What the MACD Measures

The MACD is a momentum oscillator, meaning it measures the veracity of price movements in the market. 

The concept behind the indicator is that price changes happen as a result of investor movements. When investor demand for an asset climbs, the price of that asset follows, and when demand declines, the price falls. 

Because all investors don’t make their moves at the same time, tracking the speed of price movements, or speeding and slowing of demand, indicates when reversals are likely to occur. Traders see these coming reversals as buy and sell signals. 


How to Calculate MACD

To calculate the MACD, subtract the long-term, 26-period EMA from the short-term, 12-period EMA:

MACD = 12-Day EMA – 26-Day EMA

Most charting platforms do this calculation for you and plot the results alongside an asset’s price chart.

Example Calculation

Let’s say ABC stock has a 12-Day EMA of $25.12 and a 26-Day EMA of $24.93. The moving average convergence divergence formula using the data in the example would look like this: 

MACD = $25.12 – $24.93 = $0.19 

The value of the MACD is plotted on the graph over time. Investors watch as the value increases and decreases, creating buy and sell signals. 

Signals are also created by comparing the movement of a signal line in relation to the MACD line. The signal line is calculated by taking a nine-day EMA of the MACD. 


How to Read the MACD

There are three important lines to watch when reading MACD data:

  1. MACD Line. The MACD line is plotted on the chart based on MACD values over time. When the MACD line crosses above zero, the trend is considered bullish, and the trend is bearish when the MACD line crosses below zero. 
  2. Signal Line. The signal line — the line created by taking a nine-day EMA of the MACD — is also plotted on the chart. Traders pay close attention to the relationship between the MACD line and the signal line, specifically looking for points at which the two lines cross for trading signals. 
  3. MACD Histogram. The MACD histogram is a visualization tool that helps traders measure the difference between the MACD line and the signal line. Investors read these two lines converging or diverging as buy and sell signals. 

Ways to Interpret the MACD

The MACD generates trading signals in multiple ways. Some of the most common ways to interpret the indicator include:

MACD Crossovers

MACD crossovers happen when the MACD line crosses over the signal line on a trading chart, generating signals to buy and sell the asset being analyzed. Here’s how they work:

  • Bullish Crossover. A bullish crossover happens when the MACD line crosses over the signal line. When this happens, it acts as a signal that the stock is headed for an uptrend. 
  • Bearish Crossover. A bearish crossover happens when the MACD line crosses below the signal line. When this occurs, it’s a signal that the stock price is headed for a downtrend. 

Crossovers can also happen without a signal line:

  • Bullish Crossover. When the MACD line crosses over zero, the move is considered to be bullish, signaling upward movement ahead. 
  • Bearish Crossover. When the MACD line crosses below zero, the move is considered bearish, signaling downward movement ahead. 

See the chart below for an example. The chart shows Apple’s daily stock price and the MACD over a six-month period ending April 7, 2022.

At the bottom of the image, you’ll notice a sub-chart with a red line, a black line, and a blue histogram. This section charts the MACD. The black line is the MACD line, and the red line is the signal line. 

Around November 15, 2021, a bullish crossover took place, preceding a sharp rise in Apple’s stock price. In mid-December, a bearish crossover took place, followed by significant downward movement. 

There are two more bullish crossovers and one more bearish crossover on the chart that occured in 2022. Take a moment to see if you can spot them. 

If you spotted the bullish crossovers in late January 2022 and mid-March 2022, and the bearish crossover in mid-February 2022, you’re on the right track. 

MACD Histogram

The MACD histogram is a series of bars plotted in the center of the MACD chart. The bars seem to grow above and fall below the zero line, creating easy-to-spot bullish and bearish signals. 

  • Bullish Histogram Signals. When the MACD line crosses above zero, a bar in the histogram will start a series of bars that climb above the zero line. This event indicates that momentum is moving in the upward direction and an uptrend is on the horizon. 
  • Bearish Histogram Signals. When the oscillator’s line crosses below zero, a bar in the histogram will start a series of bars that fall below the zero line. This event indicates that momentum is moving in the downward direction and signals a downtrend. 

Let’s refer again to Apple’s stock chart for an example:

You’ll notice a series of blue lines in the MACD section at the bottom of Apple’s stock chart. 

In mid-November, a series of blue bars emerged in an upward direction from the center of the chart, suggesting that prices would rise. In mid-December, the bars reversed direction, falling below the zero line, suggesting prices would decline. Following these events, Apple’s stock price did exactly what the signals suggested would happen. 

Bullish signals were also created in late January and mid-March of 2022, and another bearish signal can be spotted in mid-February 2022. Take a moment to study the chart and note how the price of Apple’s stock reacted following these events. 

MACD Divergences

Finally, MACD divergences are used to determine which direction an asset is likely to move in. A divergence takes place when the MACD doesn’t agree with the asset’s price movement. 

For example, if the asset closes the day at a higher high but the MACD moves lower, the move is known as a divergence. Here’s what divergences tell you:

  • Bullish Divergence. When a stock closes the day lower, but the MACD moves into the positive territory, this is known as a bullish divergence. The signal suggests that bearish momentum is slowing and buyers are flooding into the asset. As a result, the price of the asset should head in the upward direction. 
  • Bearish Divergence. When a stock closes the day at a new high, but the MACD moves into negative territory, it’s considered a bearish divergence. This move suggests bullish momentum is slowing and the bears are about to take control. As a result, declines are likely ahead. 

Let’s return to Apple’s stock chart to see what this looks like:

The MACD line started moving downward in mid-December. While the histogram showed bearish momentum, the price of Apple continued to move upward for a few trading sessions. As the divergence between the price of Apple and its MACD grew, a clear reversal began to emerge, leading up to dramatic declines in the price of the stock in the sessions to follow. 

Toward the end of the chart, there’s a bullish divergence, with Apple’s 50-day moving average moving downward while the histogram moved into positive territory. Can you spot it? When you do, you’ll see the stock made a strong move for the top shortly following the divergence. 


Relative Strength Index (RSI) vs. the MACD Indicator

The relative strength index (RSI) is a momentum indicator, just like the MACD. However, the two are calculated in different ways, which can lead to different results from time to time. 

The RSI is also an oscillator, but it’s centered around price gains or losses over time, focusing on extreme highs and extreme lows to determine if an asset is overbought or oversold. This differs from the MACD because it doesn’t use moving averages to determine momentum and momentum direction. 

No single momentum oscillator is perfect. Many traders use both the RSI and the MACD when making their trades, using one to verify the results of the other. 


Limitations of the MACD Indicator

The MACD indicator is an impressive tool, but like most other technical analysis tools, it’s not perfect. Some limitations to consider when taking advantage of the MACD include:

  • Failure to Signal. Although the indicator is great at showing when some reversals are likely to occur, it doesn’t catch them all. In some cases, momentum and price movements occur at just about the same time, and the MACD doesn’t have time to alert traders to the coming reversal before it’s already happened. 
  • False Positives. In some cases, momentum will shift directions for a short period and reverse quickly, while the price stays relatively flat. As a result, traders may act on a signal, and a reversal may not actually happen. 

In short, the indicator doesn’t catch all reversals, and some of the signals it does provide won’t come to fruition. 

Most indicators have their limitations, which is why it’s important for traders to have multiple tools in their toolboxes. 


Final Word

The MACD is an important piece of many successful traders’ trading strategies. The metric helps to determine when prices will rise and fall, but it isn’t perfect. Make sure you couple it with a few other technical indicators to get a full picture when making your moves in the market. 

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

Joshua Rodriguez has worked in the finance and investing industry for more than a decade. In 2012, he decided he was ready to break free from the 9 to 5 rat race. By 2013, he became his own boss and hasn’t looked back since. Today, Joshua enjoys sharing his experience and expertise with up and comers to help enrich the financial lives of the masses rather than fuel the ongoing economic divide. When he’s not writing, helping up and comers in the freelance industry, and making his own investments and wise financial decisions, Joshua enjoys spending time with his wife, son, daughter, and eight large breed dogs. See what Joshua is up to by following his Twitter or contact him through his website, CNA Finance.

Source: moneycrashers.com

Stock Market Today: Stocks Stumble as Inflation Remains Red-Hot

It was a choppy day for stocks as investors unpacked the latest consumer price index (CPI). Data released by the Labor Department this morning showed that prices consumers paid for goods and services in April rose at an annual rate of 8.3% – down from March’s 8.5% pace to mark the first drop in inflation in eight months. While encouraging at first glimpse, there were concerning signs deeper inside the report.

For instance, the decline in CPI last month reflected a drop in gas prices, which have since rebounded. Food prices remained elevated, while airfare and restaurant bills increased ahead of the key summer travel season. And core CPI, which excludes the volatile energy and food categories, rose 0.6% on a sequential basis – double what it was in March.

“While this report appears to mark the first that shows some moderation from the ever-rising pace of inflation since September of last year, one data point does not necessarily make a trend; and the rise in core CPI should lead to some consideration that the moderation in inflation will not be quick,” says Jason Pride, chief investment officer of private wealth at wealth management firm Glenmede. 

With prices already high, Pride said, it should be harder for the CPI to continue to rise at the same pace, especially with the Federal Reserve also hiking interest rates to combat higher prices. “However, it will likely take multiple reports for such a trend [of moderating inflation] to clearly establish itself,” he says.

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This sentiment is echoed by Mike Loewengart, managing director of Investment Strategy at E*Trade. “Today’s read is a stark reminder that the journey to pre-pandemic levels of inflation will be a long one,” Loewengart says. “Although inflation slowed from March, the market’s reaction suggests that record high prices continue to weigh heavy on investors psyches. And with inflation persistently hot, the Fed has more fodder for increased rate hikes, which the market doesn’t often welcome with open arms.”

After bouncing between gains and losses in early trading, markets took a decisive turn lower this afternoon. At the close, the Nasdaq Composite was down 3.2% at 11,364, the S&P 500 Index was off 1.7% at 3,935 and the Dow Jones Industrial Average was 1.0% lower at 31,834. 

stock price chart 051122stock price chart 051122

Other news in the stock market today:

  • The small-cap Russell 2000 retreated 2.5% to 1,718.
  • U.S. crude futures surged 6% to end at $105.71 per barrel.
  • Gold futures gained 0.7% to settle at $1,853.70 an ounce.
  • Bitcoin slid below the $30,000 for the first time since July 2021, down 5.9% at $29,477.50. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
  • Roblox (RBLX) was down as much as 10% in after-hours trading Tuesday after the video game developer reported a first-quarter loss of 27 cents per share, wider than the 21 cents per share Wall Street was expecting. The company’s revenue of $631.2 million also fell short of the consensus estimate, as did bookings of 54.1 million. Still, the metaverse stock managed to finish today up 3.4% after Chief Financial Officer Michael Guthrie said on the company’s earnings call that year-over-year growth may have bottomed in March, sooner than anticipated. 
  • Coinbase Global (COIN) shares plunged 26.4% on Wednesday after delivering a pretty disappointing quarterly report. Q1 revenues were off 27% year-over-year to $1.17 billion, widely missing analysts’ expectations for $1.50 billion. Meanwhile, the company swung to a $430 million loss after earning $388 million in the year-ago period. Monthly users were down 19% YoY, too. Also raising eyebrows in the cryptocurrency community was an update to the Risk Factors section in its Form 10-Q, warning that users could potentially lose access to their assets in the event Coinbase ever had to go through bankruptcy proceedings.

Inflation Remains a Top Concern for Investors

Inflation remains top of mind for investors. This is according to the latest Charles Schwab Trader Sentiment Survey, which reviews the outlooks, expectations and trading patterns of 845 Charles Schwab and TDAmeritrade clients. Inflation was the main concern for those surveyed in the report (20% of respondents), followed by geopolitics (15%) and recession/domestic politics (12% apiece). And nearly half of participants (45%) do not believe inflation will begin to ease until 2023. 

“Overall, in the second quarter, market sentiment among traders is unquestionably skewing bearish,” says Barry Metzger, head of trading and education at Schwab. But market participants do see investing opportunities, the report notes.

Among the sectors survey respondents are most bullish on at the moment are energy (70%) and utilities (54%). The industries they are most upbeat toward include cybersecurity (71%) and agriculture (70%). 

And 70% of those surveyed are interested in seeking out opportunities in defense stocks. While Russia’s invasion of Ukraine has unsettled many parts of the stock market, it has also sparked an increase in global military spending, which could create a potential boon for the industry. Here, we’ve compiled a quick list of defense stocks that are poised to benefit from this spending build. The names featured include familiar names as well as some under-the-radar picks – and they all sport top ratings from Wall Street’s pros.

Source: kiplinger.com

5 Stocks to Sell or Avoid Now

It’s been a horrific year so far for equities, and yet the market remains littered with stocks to sell in anticipation of even deeper losses.

True, one of the worst starts to a year in market history has surely created a smorgasbord of bargains. But it hardly follows that every stock is worth buying on the dip. 

Although being greedy when others are fearful is a generally fine first principle, remember that some stocks go down for good reasons. Such stocks to sell have plenty of room to decline even further.

Given that negative ratings on equities are exceedingly rare on Wall Street, it seemed like a good time to see which names analysts collectively single out as stocks to sell now. To that end, we used data from YCharts and S&P Global Market Intelligence to screen the Russell 1000 index for the stocks with the highest-conviction consensus Sell recommendations by industry analysts.

Here’s how the ratings system works: S&P surveys analysts’ stock calls and scores them on a five-point scale, where 1.0 equals a Strong Buy and 5.0 is a Strong Sell. Any score equal to or below 3.5 means that analysts, on average, rate the stock at Sell. The closer a score gets to 5.0, the stronger the consensus Sell recommendation.

After running the screen we were left with a very short list of names. (As we said above, Sell calls are rare.) And although they come from sectors as diverse as retail, insurance and utilities, they all have one thing in common: The Street expects them to underperform the broader market handily over the next 12 months or so.

Read on for more information about Wall Street’s top five stocks to sell now.

Share prices, price targets, analysts’ recommendations and other market data are as of March 9, courtesy of S&P Global Market Intelligence and YCharts, unless otherwise noted. Stocks are listed by conviction of analysts’ Sell calls, from weakest to strongest. 

1 of 5

Hawaiian Electric Industries

offshore electricity wind generatorsoffshore electricity wind generators
  • Market value: $4.6 billion
  • Analysts’ consensus recommendation: 3.6 (Sell) 

Hawaiian Electric Industries (HE, $41.99) stock is holding up pretty well so far in 2022. It’s essentially flat for the year-to-date vs. a drop of 16% for the S&P 500. 

The Street, however, says that outperformance is set to come to an end in a big way.

The five analysts covering this utility stock collectively view it a hair on the negative side. The average price target of $41.60 implies that the stock is a little overvalued, and ratings lean to the sell side, at three Holds, one Sell and one Strong Sell, per S&P Global Market Intelligence.

The pros who have Hawaiian Electric among their stocks to sell believe the company is set for a fall. UBS Global Research analyst Daniel Ford rates the stock at Sell, and his price target of $36 gives HE stock implied downside of about 15% in the next 12 months or so.

That’s due in part to the company’s unique total exposure to its state. Hawaiian Electric Industries comprises three operating subsidiaries: Hawaiian Electric, an electric utility serving 95% of Hawaii; American Savings Bank, one of Hawaii’s largest financial institutions; and Pacific Current, an independent subsidiary that aims to advance Hawaii’s sustainability goals.

As such, HE was sort of a COVID-19 recovery play, but now much (if not all) of the upside has been baked in. The valuation would certainly appear to support that view. 

Indeed, shares trade at just under 20 times the Street’s 2022 earnings per share (EPS) estimate. Meanwhile, analysts forecast the company to generate modest average annual EPS growth of less than 8% over the next three to five years.

2 of 5

Southern Copper

Copper miningCopper mining
  • Market value: $45.1 billion
  • Analysts’ consensus recommendation: 3.75 (Sell) 

Southern Copper (SCCO, $58.38) stock is off more than 5% for the year-to-date. Although that’s beating the broader market by a wide margin, the Street says its days of outperformance are coming to an end 

Shares in the copper miner, smelter and refiner get a consensus recommendation of Sell, with fairly strong conviction. Of the 16 analysts covering SCCO tracked by S&P Global Market Intelligence, eight rate it at Hold, four say Sell and four call it a Strong Sell.

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The bearishness stems primarily from political and social upheaval in Peru, where the company maintains a key presence. SCCO saw copper production tumble 10% in the most recent quarter after community protests forced it to halt work at its Cuajone mine. 

The mine has since returned to full capacity, but tensions remain high. Indeed, BofA Securities joined the pros listing Southern Copper among their stocks to sell earlier this year, downgrading shares to Underperform because of the potential for further unrest in Peru.

At the same time, SCCO is also struggling with lower ore grades and recoveries at other mines, notes CFRA Research analyst Matthew Miller, who rates shares at Hold. Those headwinds forced the company to cut its full-year production guidance by 3%, the analyst adds. 

The Street also worries about Southern Copper’s heavy dependence on the Cuajone mine, as it accounts for 40% of the company’s production in Peru.

3 of 5

Xerox

A person using a copying machineA person using a copying machine
  • Market value: $2.7 billion
  • Analysts’ consensus recommendation: 4.00 (Sell) 

Xerox (XRX, $17.24) stock has lost nearly a quarter of its value so far this year, but you won’t find any analysts imploring clients to buy the dip on this long-time market laggard. 

Indeed, shares in the digital printing company have carried a consensus recommendation of Sell for more than a year, and it’s not hard to see why. XRX underperformed the broader market by pretty much epic margins in five of the past seven years.

Apparently there’s little reason to see it snapping that streak anytime soon.

“Prior to the pandemic, Xerox had faced pressure from the rise of the paperless workplace and the corresponding decline in imaging equipment revenue,” writes Argus Research analyst Kristina Ruggeri (Hold). “The increase in work-from-home practices during the pandemic further accelerated this trend.”

At the same time, supply-chain disruptions are impeding the company’s efforts to manufacture higher-margin products, and inflation is taking a heavy toll on input costs.

“We expect these headwinds to weigh on sales and earnings well into 2022 and believe that it will take time for the company’s transformation efforts to gain traction,” Ruggeri says.

The majority of the seven analysts with opinions on XRX have it among their stocks to sell. Specifically, three call Xerox a Hold, one says Sell and three have it at Strong Sell.

4 of 5

Mercury General

Mercury General stock sell auto insurance Mercury General stock sell auto insurance
  • Market value: $2.8 billion
  • Analysts’ consensus recommendation: 4.00 (Sell) 

Only one analyst covers shares in property and casualty insurer Mercury General (MCY, $49.80), which should give would-be investors pause in and of itself.

That the sole analyst tracking MCY slaps a rare Sell call on it makes this name only that much more unattractive.

Raymond James analyst C. Gregory Peters rates MCY at Underperform (the equivalent of Sell), citing a number of factors. For one thing, the insurance underwriter continues to be hurt by the supply-chain problems and inflationary pressures endemic to the auto and property markets.

In addition to the fact that consumers don’t need to buy insurance for cars they can’t find or afford, MCY is struggling with the California Department of Insurance’s rates policies.

“The CA Department of Insurance is notoriously anti-insurance industry and political, which we believe could make rate approvals even more problematic considering it is an election year,” Peters writes. “In a worst-case scenario, the CA DOI could delay rate increases by up to two years.”

MCY stock is beating the broader market year-to-date, but it’s still off about 6%. Raymond James’ Peters doesn’t have a price target for the stock, saying it’s not material at this point.

“Our Underperform rating is primarily a reflection of the longer-term structural challenges associated with California,” he says.

5 of 5

GameStop

A storefront of video game retailer GameStop (GME)A storefront of video game retailer GameStop (GME)
  • Market value: $7.5 billion
  • Analysts’ consensus recommendation: 4.33 (Sell) 

The godfather of meme stocks is set for a massive fall, at least as far as Wall Street pros are concerned. And that’s after falling by more than a third for the year-to-date already.

Analysts’ average target price of $26.50 gives shares in GameStop (GME, $98.79) implied downside of 73% in the next 12 months or so. Their consensus recommendation, needless to say, stands at Sell.

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To be fair, we’re talking about a miniscule sample size of recommendations here. Only three analysts bother issuing opinions on GME anymore. Of those who remain, one rates the stock at Hold and two call it a Strong Sell, per S&P Global Market Intelligence.

Once upon a time – before shares in the brick-and-mortar video game retailer became a plaything for social media day traders – as many as 10 analysts covered GME. But once the stock’s price action became divorced from reality – it gained 1,740% over the course of a few weeks at one point in early 2021 – fundamental research became pointless. 

That schism remains a real problem for analysts who refuse to drop coverage of the name.

“The share price continues to trade at levels that are completely disconnected from the fundamentals of the business due to ongoing support from certain retail investors,” writes Wedbush analyst Michael Pachter. “As a result, we continue to believe that an Underperform rating [the equivalent of Sell] is warranted.”

Source: kiplinger.com

Coastal Grandmother Decorating Ideas: Transform Your Apartment With Summer’s New Hot Trend

Luxury and comfort can exist together in home design, and middle-aged women have perfected the art of combining the two.

It’s cozy and chic. Neutral and bright. Airy and open. It’s high-end, but not in the way that you’re afraid to sit on the couch or touch a vase. It’s still comfortable and welcoming, where you feel like you can cuddle up and read a book. We’re talking about the coastal grandmother aesthetic.

What is a coastal grandmother?

Imagine reading a book on your porch that overlooks the ocean shores, sipping a glass of wine while feeling the gentle breeze. You’re wearing a loose pair of pants with a slightly oversized button-up shirt — but you don’t look frumpy. You still look very put-together, but in a practical way, as if you’ve dressed yourself to pick vegetables in the garden or run to the street market to buy fresh flowers.

Coastal grandmother is the embodiment of the style of affluent middle-aged women in coastal cities — think Ina Garten, Oprah Winfrey and Martha Stewart. It’s being classy and high-end while still being casual and comfy.

How to incorporate coastal grandmother design in your home

Now that you know roughly what the coastal grandmother aesthetic is, it’s time to channel the coastal grandmothers we all know and love (including those mentioned above) to achieve the look!

1. Teak furniture

teak furniture

teak furniture

Instead of wooden furniture pieces being painted to match a colored theme, stripping it back to the basic wood is what a coastal grandmother would do. Highlighting the natural beauty of teak wood furniture, whether it be a bench or a dresser, will bring in the warmth that a grandmother wants in her home while also hinting at the driftwood found on many coastal beaches.

2. Chunky cable knit blankets

Chunky blankets

Chunky blankets

You can find a coastal grandmother wearing a luxe cable knit sweater to keep warm in the colder months. And to match that sweater, she’s got cozy, chunky cable knit blankets for snuggling up by the window and watching the snowfall or reading a book. Chunky knitted blankets are both simple and luxurious, embodying all that is the coastal grandmother.

3. Neutral colors

neutral colors

neutral colors

Coastal style, in general, focuses on using light, neutral colors, like white and beige. You can also pull in other colors, but make sure they’re more muted, like dusty blue or a soft pastel coral. If you’re trying to play it safe as you start out, you can’t go wrong with white and beige as your base colors, then bringing in accents of muted blues.

4. Sheer, breezy curtains

breezy curtains

breezy curtains

Having sheer curtains that blow in the ocean breeze is a staple in any coastal grandmother’s living room. They give a home a fresh and airy feeling, while also framing the window. And in typical coastal grandmother fashion, these curtains aren’t over-the-top — they’re subtle and seemingly unnoticeable, yet make a big impact on the room overall.

5. Natural materials

natural materials

natural materials

Using items with a natural wood finish or made from natural materials give the light and natural vibe that is a coastal grandmother. You may decide to use a lightly-stained wooden coffee table and cotton or linen textiles. Textiles made of natural materials are more breathable, so choosing fabric materials made from plants like flax, jute and hemp can give your place more of an airy feel, versus something like polyester that makes you sweat just by looking at it.

6. Sea glass bottles

sea glass bottles

sea glass bottles

Frosty blue and green bottles and jugs are reminiscent of bottles found at sea or that washed up on the shore. Thankfully, we don’t need to wait around for one of these beautiful bottles to show up on the beach because we can easily find them at the store. Just make sure you’re sticking with blues and greens and not going too wild on the glass colors, or else it will distract from the typical coastal style.

7. Fresh flowers

fresh flowers

fresh flowers

A coastal grandmother almost always has fresh flowers in her home. She may have picked them from her own garden or she may have strolled into town and purchased them from a local vendor at a street market. Either way, a vase of fresh flowers is a must for achieving the coastal grandmother style.

8. Slipcover couch

Linen slip covered couch

Linen slip covered couch

For reasons we may not understand until we reach the actual coastal grandmother age, having a slipcover on your couch is the way to go. We don’t mean the slipcover that’s made of stretchy material and has elastic on the ends to hold it into place — we mean a slipcover that fits the couch perfectly and made of breathable material like cotton or linen. It’s the type of couch you can comfortably sit and chat with friends on for hours and is the perfect couch for taking afternoon naps.

9. Throw pillows

Throw pillows

Throw pillows

When a coastal grandmother has throw pillows, that doesn’t mean just one or two. You’ve got to cover every surface you can possibly sit on with throw pillows — a few for the couch, one on every chair and even a couple to put on the window seat. You’ll also want these throw pillows made of the same breathable textiles as other things in your home and you want to make sure they follow the light, neutral color scheme and add to your nautical or beach items.

10. Woven baskets

Woven baskets

Woven baskets

Storing items in plastic bins is too modern for the coastal grandmother style. Get woven baskets that can serve the same purpose as other storage solutions, but look more natural and inviting. You can use baskets for more than the storage of household items —you can also use them while gathering vegetables and flowers from your garden or carrying your purchases from a day at the street market.

Make coastal grandmothers proud

Coastal grandmothers have spent their entire lives achieving their style, so make sure you do them proud! If you’re ever stuck, simply ask yourself, “What would Martha Stewart do?” And you’ll have a handle on the coastal grandmother style in no time.

Source: rent.com