Small Cap Investments. - Value, momentum, growth companies. Investigating the Fed Reserve Policies and Big Bank Influences. The small investor is being tried. It is time to be defensive and wait on great opportunities. "What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion, solidly build into human nature, that always gets in the way of human intelligence." - Jesse Livermore. Lets share ideas!
Wednesday, September 24, 2014
How Does The Small Investor Compete With Big Institutions
(Yahoo.com-William A. Galston). If they (Americans) were judging the economy by the monthly jobs report, working Americans would be popping champagne corks. Total employment has risen every month for more than four years. According to the Current Population Survey, more than eight million jobs have been created since the trough, while the number of unemployed has been cut by nearly six million. The unemployment rate has declined to 6.1% from 10%, and the number of Americans enduring long-term unemployment (27 weeks or more) has fallen to three million from 4.3 million in the past 12 months. This year's report (U.S. Commerce Department) found that median household income was $51,939 in 2013, 8% lower than in 2007, the last year before the recession (crash of 2008). Households in the middle of the income distribution earned about $4,500 less last year than they had six years earlier. No wonder 56% of Americans told the Pew Research Center that their incomes were falling behind the cost of living.What's going on? The Census report offers a clue. The median earnings for Americans working full-time year round haven't changed much since 2007. But more than five years into the recovery, there are fewer such workers than before the recession. In 2007, 108.6 million Americans were working full time, year-round; in 2013 only 105.9 million were doing so. Although jobs are being created, too many of them are part-time to maintain growth in household incomes.
______________________________________________________________ (US Census Bureau). New Economic Indicators from the US Census Bureau show that Residential Housing Sales (single family) are up 16.3% as of Aug 14. However new construction is down -7.9%.Profits from retail trade are up $7 Billion. Construction spending was up 1.8%. Rental rates were down 7.5%. Home ownership rates were down 0.3%. The nation's 65-and-older population is projected to reach 83.7 million in the year 2050, almost double in size from the 2012 level of 43.1 million.
(Wikipedia.org/wiki/Middle-class_squeeze). The middle-class squeeze is the situation where increases in wages fail to keep up with inflation formiddle-income earners, while at the same time, the phenomenon fails to have a similar impact on the top wage earners. Persons belonging to the middle class find that inflation in consumer goods and thehousing market prevent them from maintaining a middle-class lifestyle, making downward mobility a threat to counteract aspirations of upward mobility. In the United States for example, middle-class income is declining while many staple products are increasing in price, such as energy, education, housing, and insurance.
(CERR Investments). What does this mean? This is my read: Industries and investors are buying houses instead of regular home buying residents and renting them at higher than normal prices (profits $7 Billion) - keeping residents from renting (rental rates down 7.5%). People are finding themselves priced out of the housing market (ownership rates down 0.3%). This tells me the younger people and the middle class are getting squeezed and older generation is trying to hold on to their existing houses as long as possible (housing starts or construction down 7.9%).