EIGHT DAYS IN TO SEPTEMBER, MORE OF THE SAME

I suppose the big news this week is the President's jobs program, or as Shakespeare might call it, "Much ado about nothing."  Another $3 billion of taxpayers money down the drain.  The last "stimulus" program didn't stimulate much as far as I can see. 

Anyway, the market is much the same as last week, up and down, but mostly going nowhere fast.  I expect to see more of the same, which is good news for me since I'm in the buying mode.  Not so good for those who bought in at loftier prices. 

Got some great deals with coupons this week!  Took advantage of Schnuck's 10 for $10 sale, matched up coupons on some needed items and walked out with a 70% savings on my total grocery bill.  I expect to do as well or better at Walgreens this coming Sunday.  Already making my shopping lists and matching up coupons with their ad.  I created a simple spreadsheet with Microsoft Works to keep track of my coupon savings starting the first of this month.  Just curious to see how much I'm actually getting with coupons.  I'll post the results at the end of each month. 

SEPTEMBER OFF TO A MEDIOCRE START

We gained some and lost some in the market for the last few days of August and the first few days of September.  My accounts ended pretty much flat for the week.  I did collect some decent dividends from AEA, AFLAC, Intel and ConAgra, so it wasn't exactly an unprofitable week.  Still in the buying mode.  Reinvested my dividend payments in additional shares of current holdings.  I really don't see any sustainable rallies in the market until after October.  I think we'll just be seeing more of the same minor ups and downs.  Don't really think there will be a double dip recession, although I do think it will take quite a bit longer for the economy to recover.  Which, as far as I'm concerned, spells prolonged buying opportunities. 

I've decided to invest my extra check this month from SendEarnings in my cash accounts.  I'm working toward building additional cash reserves along with beefing up my stock holdings.  I should receive my first statement from my savings plan at work by the end of September.  It will be great having an additional investment account, especially one with 100% matching contributions.  I've already decided any new raises will go toward increasing contributions to the plan.  With the company match and tax deferral it's the best opportunity available to me at this time.

I've been offered a new job with better pay and reduced hours (something I want), but it involves working at the county jail.  So I'm going to have to think that one over.  It's a new jail and they're working through setting up their operating system, think I'll wait and see how things go before I make a final decision.  I'd be working for a private contractor, so it wouldn't be in my best interests to take the job and have them lose their contract leaving me unemployed.  Think I'll wait until they've at least finished construction.

QE2 BOOM OR BUST?

While so many politicians would have you believe that the increase in the number of jobs in the past year is a direct result of Quantitative Easing (QE2), making it a success, a look at the numbers paints a very different story.

According to an article I read recently, the number of jobs increased by 700,000 during QE2.  Since the total cost of QE2 came to $6 billion, that works out to $850,000 per job created.  I figure I could retire quite comfortably on about a third of that amount.  So if the government had simply offered early retirement to people like myself, they could have easily freed up 2,100,000 jobs.  Now if you had 2,100,000 job openings and 2,100,000 new retirees with adequately funded retirements, not only would you create additional jobs to support the needs of the retirees, but income tax revenues would have increased since retirees would still be paying income taxes, and the government would have recouped the money spent on early retirements in the form of income taxes.  Given the fact that new hires are usually hired on at a lower pay scale than seasoned employees, it would have had the added effect of keeping inflation in check by lowering payrolls and reducing overall costs for businesses.  Private corporations and state governments do this all the time, offering early retirement as a way to reduce payroll costs.  Why not apply the same method on a national level if you're going to spend the money anyway?  Something our political leaders may need to look into.

So, QE2 Boom or Bust?  I'd have to say it's a bust.  $850,000 is way too much to pay for creating a single job and if you consider the added burden of inflation, if I had been involved in passing this legislation, I don't think I'd be so quick to pat myself on the back.    (For more on this subject, click the title above for a link to the article on Smart Money.com)

YES STOCKS CAN GO UP WITH OIL OVER $100 A BARREL

Of course stocks can go up with oil over $100 a barrel.  But they can also drop dramatically when consumers discretionary spending is consumed by the high price of gasoline and sales of other items lag.  Now is a terrible time for high oil prices as far as economic recovery is concerned.  While I don't expect it to cause a double dip, as some have speculated, I do think it will drastically slow down the recovery process.

Bottom line, I've seen a lot of run ups in oil prices over the years and we've survived them all, despite all the doom and gloom from the media.  However, we're in serious trouble if the jobs don't start to pick up soon.  Who's going to buy the high priced gasoline if there are so many still out of work?

U. S. JOBS CREATION

I recently purchased a stake in Intel (INTC) as a core holding in my taxable portfolio.  Aside from their great fundamentals and their 3.38% dividend payout, I'm glad to see them leading the way towards creating jobs here in the United States.  Intel recently announced they are spending billions to build new factories in the U.S..  If more U.S. based corporations would follow suit, we wouldn't have to worry about jobs creation.  New factories here not only create factory jobs but boost consumer spending, leading to creation of residual jobs.  Intel's U.S. factories build products for the world market, so they also help the trade imbalance by boosting exports.

Maybe it would make more sense to locate factories outside the U.S. in the short term, but I think if U.S. corporations continue to follow this path, they will eventually destroy one of their most profitable markets.  Forward looking companies, ones who think long term, would realize the value of creating high paying jobs here.  If we continue to lose jobs, who will buy their products in the future?  That's the question CEO's and investors should be asking themselves.  It's not always a good thing to outsource production, if it results in the destruction of one of your best markets. 

Is The Rally In Stocks Over?

There seems to be a lot of talk going around that the rally in stocks is over. On the other side of the coin, some are saying we'll see a continued upward trend for the first half of this year.

Personally I think we'll see an erratic movement in stocks with a lot of ups and downs, with an overall upward trend. For those who say the market can't go higher after last years gains, I would remind them the Dow was over 12,000 not all so long ago. Recently the Dow closed at 10, 618, so why would it be so hard to believe in a continued rally?

Job losses have slowed, although there are a lot of people still out of work. I was one of those people until October of last year. I had been unemployed since the first of January and finally went back to work the middle of October. Granted it is a much lower paying job, but it's nice to have a job again just the same. I think we'll see more improvement in the job markets this year, especially with companies who overly reduced work forces having to call workers back and for companies who benefit from the Federal Governments job creation incentives. When the job market improves the rest of the economy will follow suit.

One really good thing to come out of the "Great Recession" is the Americans decrease in credit card spending and increased personal savings. I only hope the benefits that come from this are not outweighed by heavy increases in deficit spending by the Democratic congress and the Obama administration. All this spending has already led to increased taxes and more are sure to come. Increased taxation is bad for the economy and bad for businesses and jobs creation. I was surprised to hear California's Republican Governor proposing a cut in corporate tax breaks at a time when California is facing such severe budget shortfalls. Many corporations have already left California for more tax friendly states and further cuts in tax incentives will only lead to more companies relocating out of state at a time when they really need to be more friendly towards business and jobs creation. I'm starting to wonder if Mr. Schwartznegger is aligning himself more with the Democratic agenda rather than the Republican party?

When all is said and done, we have to be prepared for another difficult year in the markets and be very selective when it comes to picking stocks for our investment portfolios. Only time will tell if the rally will continue, but doing your homework before investing can help alleviate downside risks. True investors make money whether the market is up or down, so our main goal is to educate ourselves as much as possible and become "true investors" and avoid random trading in and out of the stock market.

GE Showing Signs of Improvement

GE is one of the core holdings in my personal stock portfolio. Even though this past year has not been kind to their stock price or their investors, I still believe the company has a bright future (no pun intended). Recently they announced improvement in their Capital division, which was largely responsible for their poor performance of late. While loan losses are expected to continue into 2010, they're predicting the division will show a profit by 2011. In the mean time, I'm looking to add additional shares to my stake while the price is low ($15.66 currently). Their dividend yield of 2.55% is well below the average yield of my current investments, however I'm expecting to make up for that through growth in stock value. If Warren Buffett feels confident enough to loan GE $3 billion, then I feel pretty safe investing my money with them. Bottom line, it's a magnificent company with a fantastic pedigree, strong management, great product line and a franchise name. You can't really ask for much more than that.

On an entirely unrelated subject, Obama recently announced tax incentives for small businesses who hire new workers. I have to say I think this is the smartest move the man has made since being elected. Getting people back to work is the key to getting the economy moving again. When the government gives business incentives to put people back to work, it's a win win situation for everyone concerned. The businesses save money due to tax incentives, the workers gain jobs and paychecks which they spend, in turn benefiting other businesses. With sales of goods and services going up and more people working, tax revenues increase for local, state and federal governments. So jobs should be JOB 1 for our political leaders right now.

Still Looking For a New Job

Like many fellow Americans, I'm still searching for a new job. The business I worked for closed in January of this year. I've been getting more interviews lately and they've all gone well. So far, haven't gotten a suitable job offer, but things are looking up.

Just saw a repeat of a news story, about a couple of women in Florida who were laid off and came up with the idea for brightly colored bracelets saying:

"Laid-Off Need A Job"

So I decided to give them a try. I think of it as a good way to improve my networking and since I have friends and family members in the same boat, I ordered extra bracelets to share. I'll keep readers posted on how it works out. If you'd like to pick up a bracelet for yourself or someone you know, you can find them at:

http://www.laidoffneedajob.com/buy-wristband.html

Best of luck!

Make Money Without a Job!

(In reviewing some of my past posts, I came across one from November 2007, thought it was worth re posting.)

A Little Extra Income.

In the spring of this year, business at my workplace slowed and like so many other businesses, my employers cut everyones' hours. I can understand that, from a business point of view, every dollar saved on labor goes directly to the bottom line as profit. However, my bills did not slow down and I didn't want to cut down on my investment program. I also didn't like the idea of getting a second job. Don't get me wrong, I have no problem with working. But like Ronald Reagan once said, "I know hard work never killed anybody, but I figure why take chances."

At any rate, I determined that I really only needed to make an extra $20 per week to keep up with my bills and my investments. So instead of getting an extra job, I decided to see if I couldn't drum up some extra work on my own. I got the idea to cut grass on my days off. As it turned out, my next door neighbor needed someone to cut grass for them. They had the mower and weed eater, all I had to do was provide the labor, for which they paid $20 each time I mowed. So I had my $20 extra per week. In the mean time I had put the word out among friends and acquaintances (networking) that I was available for odd jobs in case they were needing any help. Little by little I picked up extra work here and there, doing window cleaning, steam cleaning carpets, painting and most surprising of all some commissioned art work. I say the art work was surprising because I'd never really thought about making any money at it. As it turned out I sold over $250 in sketches I did in my spare time.

What did I learn from all this? I found out how easy it was to make money without a regular job. I just wanted to make an extra $20 in income per week to cover the cuts at work. As it turned out, when I actually started looking for ways to make extra money without an extra job, I ended up making anywhere from $250 to over $500 extra per month. Since I always have three days a week off from my regular job, it was not really a problem to work one of those days. Now I'm looking at ways to turn this experience in to a part time business. I've come up with a lot more ideas for making extra cash and I'm pretty excited about the whole thing. Who would have thought that there were so many different ways to make extra income?

Economic Recovery in Missouri

I recently read an article on cnbc about the different states and when they could expect to come out of the recession. Unfortunately, the state of Missouri is in the final 31 states, with recovery expected to begin in the second half of 2010. The central part of Missouri where I live, has been one of the hardest hit during the recession. Like a lot of Missourians, I am currently unemployed and am actively seeking employment. I haven't given up hope of finding a job, quite to the contrary. My place of employment went out of business on January 10th of this year and it was not until the past month that I got my first interview. However, I've had other interviews since and one coming up this week. Although I didn't get any of the jobs I've interviewed for, I was a top runner for the last job, so things are looking up.

With marginal improvements in the banking system and improvement in the stock market, I think it's quite possible that we might actually see recovery from the recession a bit earlier than predicted by cnbc's article. Central Missouri should be one of the first areas of the state to recover, since our local economy hosts a tremendous amount of state workers. While the state's government is suffering from the downturn, state employment has remained relatively stable, when compared to the rest of the job market. While I wouldn't look for too many raises for state employees anytime soon, at least they have jobs and benefits. A great deal of my job search efforts have been directed towards landing a job with one of the state agencies. Fortunately for me, I could take any state job offered, at any pay rate and do fine financially.