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- 06/08/15--07:24: _Efforts to Help Hom...
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DailyFinance.com
- Lululemon Athletica (LULU) and Burlington Stores (BURL) release quarterly financial results before U.S. stock markets open.
- At 10 a.m. Eastern time, the Commerce Department reports wholesale trade inventories for April, and the Labor Department releases job openings and labor turnover survey for April.
- "28 Ways to Save Big Bucks on Pet Supplies"
- "There's No Such Thing as a Free Puppy"
- "6 Things to Know About Insuring Your Pets"
- The Mortgage Bankers Association reports weekly mortgage applications at 7 a.m. Eastern time.
- The Treasury Department releases the federal budget for May at 2 p.m.
- Men's Wearhouse (MW) and Krispy Kreme Doughnuts (KKD) release quarterly financial results after U.S. stock markets close.
- Demographics: Investors of all ages are using robo-advisers, but not surprisingly, they are especially popular among millennials and Generation Xers who grew up with technology and would feel just as comfortable firing off an email or texting as they do talking to a human being.
- Lower account minimums: Furthermore, most wealth management firms require investors to have a minimum of $100,000 or more in investable assets. Robo-advisers have investment minimums in the low four-digit numbers; some have none. "The traditional investment advisory accounts' minimum of $100,000 puts [traditional] advisers out of reach for a lot of investors," says Larrabee. "Robo-advisers are stepping up to fill that void."
- Lower fees: Last but not least, robo-advisers are inexpensive. While traditional wealth management services charge 1 percent of assets under management or more, the typical fee charged by a robo-adviser is 25 basis points or lower, depending on account size.
Filed under: Earnings, Drug Companies, Wall Street Watch, Stocks, Investing
Let's go over some of last week's best and worst performers.
Immunogen (IMGN) -- Up 64 percent last week
Nasdaq's biggest gainer last week was Immunogen, taking off after a favorable report. Immunogen announced upbeat data on its ovarian cancer drug candidate at the annual American Society of Clinical Oncology meeting. Immonugen's mirvetuximab soravtansine is currently in the second of three clinical trial stages, but a recent test showed a positive response rate with a little more than half of the patients that had been resistant to other drugs on the market.
Sina (SINA) -- Up 38 percent last week
One Chinese CEO is putting his money where his mouth is. Sina shares rallied after its CEO announced plans to buy 11 million shares in a $456 million transaction. Paying $41.49 a share for the 11 million shares was a slight premium to the going price when it was announced Monday, but it's a huge bargain after the 38 percent pop.
Zoe's Kitchen (ZOES) -- Up 15 percent last week
A better-than-expected quarterly report sent shares of the Mediterranean restaurant chain higher. Zoe's Kitchen saw its revenue soar 36 percent over the prior year's quarter, fueled by brisk expansion and a robust 7.7 percent spike in comparable-restaurant sales.
However, the bigger surprise came on the bottom line where Zoe's produced a quarterly profit. Analysts were holding out for a modest quarterly deficit. Zoe's has fared well since going public at $15 just 14 months ago. The stock has now gone on to more than double.
Caesars Entertainment (CZR) -- Down 32 percent last week
Nasdaq's biggest decliner was Caesars, losing nearly a third of its value after a judge ruled in favor of creditors that are trying to collect from the casino operator based on a subsidiary's bankruptcy. Caesars has struggled as a leveraged casino operator, and naturally it's not in a position to take on more creditor claims.
Zumiez (ZUMZ) -- Down 20 percent last week
West Coast-themed mall retailer Zumiez wiped out after posting a sloppy quarter. Zumiez's fiscal first quarter wasn't pretty, but it was the outlook for its current quarter that ultimately slammed the stock. Zumiez is now targeting between $179 million and $183 million in sales for the period, well short of the $193 million that Wall Street was forecasting. Things get uglier on the bottom line, where Zumiez expects to earn roughly half as much as analysts were projecting.
Vera Bradley (VRA) -- Down 17 percent last week
Finally we have Vera Bradley heading lower after a weak quarterly report. The seller of colorful luggage and other accessories slipped after posting a year-over-year decline in revenue. Adjusted earnings fell short of expectations for the second quarter in a row. Several analysts lowered their ratings and/or their price targets following the problematic report.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends ImmunoGen, Sina and Zoe's Kitchen. The Motley Fool owns shares of Zoe's Kitchen. The Motley Fool is short Caesars Entertainment. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
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Filed under: General Motors, Automotive Industry, Ford, Transportation & Logistics, Investing
But recently automakers have been investing heavily in making EVs people will actually want to buy. Here are five that will look good in your driveway without leaving you broke.
A Refreshing Bolt
The Chevy Volt wasn't a head turner when General Motors (GM) launched it, but the Chevy Bolt might be. The sleek, compact design is highlighted by an all-glass roof and a minimal dash that seems like it was designed by a startup auto company rather than Detroit's old guard.
What's equally as impressive is the 200-mile range and a $38,000 price tag, even before tax incentives. The Chevy Bolt won't go on sale until about a year from now, but it could quickly become the best-selling electric vehicle on the market when it does.
Tesla Motors' Encore
The Model S is now the benchmark for electric vehicles, but the Model 3 is really when Tesla Motors will prove its mettle. This will be the third mass-produced vehicle for Tesla Motors (after the Model X launches later this year), but it'll be the first to be within reach for the mass market.
Current plans are for the Model 3 to have at least 200 miles in range and a price tag of $35,000 before tax incentives. Styling will be similar to the Model S, so Tesla isn't taking too many risks there. With a price tag that's more in reach for consumers this could be a defining product for Tesla Motors' future and could make or break the company financially. The most recently reported launch date for the Model 3 is March 2016.
Germany's Best Shot at Electric Vehicles
Tesla Motors and Chevy get a lot of the attention in the EV market, but BMW has come out of nowhere to take the No. 3 spot in U.S. EV sales so far in 2015. The i3 may be the most ambitious EV we've seen yet with a chassis built of carbon fiber and an all-electric design from a company known for luxury, high-performance vehicles.
The $42,400 price tag is expensive to be sure, but it's not much more than other EVs and among the least expensive vehicles BMW makes. The 81-mile range of the i3 isn't the industry leader in range, but this is also the first crack at EVs for BMW and I think that will improve dramatically given its success out of the gate.
VW Makes EVs Affordable
If you want an EV on a budget, the VW e-Golf is a great place to start. The car is available for $25,950 after the $7,500 federal tax credit and gets up to 83 miles on each charge. VW claims you can get up to 66 miles of charge from fast-charging stations that are popping up around the country.
The e-Golf will also perform nearly as well as gasoline-powered competitors in VW's line. It has just one foot pound less torque than the Golf TSI, due to a natural torque advantage electric engines have over gasoline power. The e-Golf should be fun to drive and at an affordable price it could be a worthy competitor to other compact EVs hitting the market.
Ford Has Gone Electric
A relative late comer to the EV party was Ford (F), but it has managed to learn from mistakes manufacturers like GM and Nissan made to bring an EV to the market that could appeal to the masses. The Ford Focus Electric has 80 miles of range in a hatchback design that starts at just $29,170.
Unlike the original Nissan Leaf or Chevy Volt, the Focus Electric is a sleek design that doesn't scream "electric" as it's driving down the road. At under $30,000 it looks like Ford is also trying to see if there's mass appeal for future electric vehicles.
It's Not So Crazy to 'Go Electric'
Just a few years ago, it would cost a fortune to buy an electric car and if you got one it was hard to feel "cool" driving it. But automakers have upped their game when it comes to styling, range, and affordability. Today, it's possible to find an attractive electric car without breaking the bank.
Motley Fool contributor Travis Hoium owns shares of Ford. The Motley Fool recommends BMW, Ford, General Motors, and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
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Filed under: Mortgages, Real Estate, Housing Market, Home Buying, Foreclosure
The number of delinquent mortgages continues to fall, but the foreclosure crisis is still taking its toll on hundreds of thousands of borrowers.
Of the approximately 952,000 borrowers who are 90 or more days past due on their monthly payments, but not yet in foreclosure, 62 percent have already been through some form of home retention program, according to Black Knight Financial Services. They are, it seems, beyond help. Home retention programs were established by lenders and the government to work with borrowers to enable them to keep their homes.
"The percentages do look significant," said Ben Graboske, senior vice president of Black Knight's data and analytics unit. He pointed to trends in the government's modification program, which has given borrowers less relief of late.
In 2010, homeowners on average could have received a $530 monthly payment reduction. That has dropped to the $450 range today. Graboske said that it is a major reason you are not seeing better performance for these homeowners today.
Banks are also getting more aggressive in pushing delinquent loans through the foreclosure process, rather than offering more modifications. As home prices rise and demand surges, banks can sell the homes more easily in today's market than they could during the height of the crisis. Retention actions are down 42 percent over past two years, but of the new modifications or payment plans, 70 percent have already been through one or even more modifications that failed, according to BKFS.
Banks are also favoring short sales more, rather than taking the home to final foreclosure and selling it. A short sale is when the bank allows the home to be sold for less than the value of the mortgage.
"The ongoing shift away from [final foreclosure] sales is a driver of improving home prices since bank-owned properties typically sell at a larger discount than short sales," noted a new report from CoreLogic (CLGX). Distressed homes accounted for 12 percent of March home sales, according to the report, down from 39 percent at the peak of the foreclosure crisis.
The numbers still vary dramatically place to place. Ironically, Washington, D.C., where the federal loan modification program was born, led the nation with 67 percent of its seriously delinquent inventory having gone through some sort of home retention activity. Maryland, Georgia, Texas and Connecticut followed with each seeing 66 percent of their 90-plus-day delinquent inventory involved in a home retention action.
The government's Home Affordable Modification Program, introduced in 2009 and recently extended, has offered just more than 1.8 million loan modifications to date. Banks and mortgage servicers have also done independent loan modifications, including millions of dollars in principal reduction and principal forgiveness.
Although the number of both delinquent loans and those in active foreclosure is down dramatically, they are still two and three times their precrisis norms, respectively, with 28 percent of the remaining foreclosure inventory located in just three states: Florida, New York and New Jersey, according to BKFS.
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Filed under: Student Loans, U.S. Government, Education, Debt Assistance
WASHINGTON -- The federal government will erase much of the debt of students who attended the now-defunct Corinthian Colleges, officials announced Monday, as part of a new plan that could cost taxpayers as much as $3.6 billion.
Corinthian Colleges was one of the largest for-profit schools when it nearly collapsed last year and became a symbol of fraud in the world of higher education and student loans. According to investigators, Corinthian schools charged exorbitant fees, lied about job prospects for its graduates and, in some cases, encouraged students to lie about their circumstances to get more federal aid.
We will make this process as easy as possible for them, including by considering claims in groups wherever possible, and hold institutions accountable.
"We will make this process as easy as possible for them, including by considering claims in groups wherever possible, and hold institutions accountable," Education Secretary Arne Duncan said in a statement.
The Education Department said it would streamline the process for the students whose schools were sold but who still believe they were victims of fraud.
For example, the department has already found that many programs at a California subsidiary of Corinthian Colleges, known as Heald College, were "misrepresented" to students. So any student enrolled in the school between 2010 and 2015 would likely qualify for relief.
The amount of debt relief could be staggering. Officials estimate that at the Heald College alone about 40,000 borrowers took on $542 million in loans. That number, however, climbs to $3.6 billion in loans if looking across all Corinthian schools, according to the Education Department.
Duncan told reporters in a phone call Monday that the department has no way of knowing how many students will come forward and ask for help.
"It's an unknown quantity at this point," he said of the final price tag.
Former officials at Corinthian Colleges weren't immediately available for comment. A former lawyer for the school said he no longer represents the chain of colleges since it went bankrupt.
Most of the company's assets have been sold and its stock worthless.
Rep. Elijah Cummings, D-Md., praised the move by the administration, even as it left glaring questions about whether the government could have done more to protect students in the first place.
"It is our responsibility to hold servicers and colleges accountable to prevent future students from having to endure anything like this debacle ever again," Cummings said.
Online: For Corinthian Colleges Students: What You Need to Know about Debt Relief
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Filed under: Market News, European Union, Federal Reserve, Transportation & Logistics, Interest Rates
NEW YORK -- U.S. stocks ended lower Monday as investors worried about Greece and mulled the prospect of the Federal Reserve raising interest rates as early as September.
With investors growing more nervous about the timing of the Fed's first rate hike in nearly a decade, the Dow fell into negative territory for 2015.
Stronger-than-expected May jobs data released Friday prompted expectations of a Fed rate hike in September, sooner than some expected.
The May jobs number is pointing in the direction of a more likely interest-rate hike. The market is cringing at that idea.
Also weighing on U.S. investors, officials from Greece and the European Union met Monday but there was little indication of progress to head off a potential Greek debt default when the country's bailout program expires at the end of June.
"The news flow continues to revolve around Greece," said Alan Gayle, senior investment strategist and director of asset allocation at RidgeWorth Investments in Atlanta. "We're of the opinion that a successful resolution to the Greek problem remains a coin toss."
The dollar retreated after a report -- later denied -- that President Barack Obama had expressed concern over its strength after a year-long rally.
The Dow Jones industrial average (^DJI) fell 82.91 points, or 0.5 percent, to end at 17,766.55. The Standard & Poor's 500 index (^GSPC) lost 13.55 points, or 0.7 percent, to 2,079.28 and the Nasdaq composite (^IXIC) dropped 46.83 points, or 0.9 percent, to 5,021.63.
Nine of the 10 major S&P sectors were lower, with the technology index's 1.2 percent drop leading the losses.
With Monday's losses, the Dow is down 0.3 percent in 2015, while the S&P 500 is up a modest 1 percent and the Nasdaq is 6 percent higher.
Movers and Shakers
Atmel (ATML) jumped 3.6 percent after Reuters reported the chipmaker is exploring strategic alternatives including a possible sale.
Apple (AAPL) weighed most on the Nasdaq composite and the S&P 500. It was down 0.7 percent to $127.80 after the iPhone-maker unveiled a new music service.
Airlines stocks fell 4.34 percent, with JetBlue (JBLU) slumping 7.2 percent. Qatar Airways asked the industry's largest trade group to address protectionism, hitting back against U.S. airlines campaigning to restrict competition from Gulf carriers.
Tesla Motors (TSLA) rose 2.9 percent after plans for its Gigafactory got a boost from Panasonic's move to start sending its employees to the plant, with manufacturing expected to begin next year.
Declining issues outnumbered advancing ones on the NYSE by 2,153 to 884, for a 2.44-to-1 ratio on the downside; on the Nasdaq, 1,785 issues fell and 1,004 advanced for a 1.78-to-1 ratio favoring decliners.
The S&P 500 posted 9 new 52-week highs and 9 new lows; the Nasdaq composite recorded 131 new highs and 28 new lows.
About 5.5 billion shares changed hands on U.S. exchanges, below the 6.1 billion daily average so far in June, according to BATS Global Markets.
-With additional reporting by Tanya Agrawal.
What to watch Tuesday:
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Filed under: Family Money, Personal Finance, Retirement Plans, Social Security
You can sign up for Social Security at any time after age 62. However, your monthly payments will be larger for each month you delay claiming them up until age 70. Here is when most people start receiving Social Security payments, and how signing up at each age impacts your payout.
Age 62. The most popular age to claim Social Security payments is age 62, the earliest possible age you can sign up. However, the proportion of people signing up for Social Security at age 62 has been declining since the mid-1990s, according to the Center for Retirement Research at Boston College analysis of Social Security Administration data. Some 48 percent of women and 42 percent of men signed up for Social Security at age 62 in 2013, down from around 60 percent of women and 55 percent of men in 2005, CRR found.
Social Security payments are reduced if you claim them before your full retirement age, which is typically age 66 or 67, depending on your birth year. If you sign up at age 62, you will get 25 percent smaller monthly payments if your full retirement age is 66 and 30 percent smaller payments if your full retirement age is 67. For example, a worker who would be eligible for a $1,000 monthly Social Security benefit at his full retirement age of 66 would get just $750 a month if he signs up for Social Security at age 62. "A lot of people just take it as soon as they can, and if you take it too early, you're really leaving a lot of money on the table," says Joel Shaps, a certified financial planner for Bedrock Capital Management in Los Altos, California.
Age 63. It's relatively unusual to claim Social Security payments at age 63. Only 8 percent of women and 7 percent of men sign up for Social Security at this age, according to CRR. Monthly Social Security payments are reduced if you sign up at age 63, but by less than if you claim payments at age 62. A worker eligible for $1,000 monthly at age 66 would get $800 a month at age 63, a 20 percent pay cut. If your full retirement age is 67 you will get 25 percent less by signing up at age 63.
Age 64. Another rare age for people to claim Social Security benefits is age 64. CRR found that 8 percent of women and 7 percent of men claim benefits at this age. Social Security payments are reduced by 13.4 percent for those with a full retirement age of 66 and 20 percent for people with a full retirement age of 67. A $1,000 retirement benefit would be reduced to $866 for most baby boomers who sign up at this age.
Age 65. The full retirement age used to be 65 for people born in 1937 and earlier, but was then gradually increased in two-month increments to 66 for everyone born between 1943 and 1954. The full retirement age increases to 67 for everyone born in 1960 or later. Baby boomers who claim benefits at this age will see their payments reduced by about 7 percent, so a person eligible for $1,000 at age 66 would get $933 monthly starting at age 65. Members of Generation Y will see their payments reduced by 13.3 percent if they claim payments at age 65.
Age 66. This is the age when people born between 1943 and 1954 are eligible to claim unreduced Social Security benefits. CRR found just over a third of men (34 percent) and a quarter of women (27 percent) sign up for Social Security benefits at their full retirement age, which is the second most popular age to claim payments. "When you take it at your full retirement age, which for a lot of people retiring today is 66, there are no reductions in benefits," says Christopher Rhim, a certified financial planner for Green View Advisors in Norwich, Vermont. For those who have a full retirement age of 67, you will get a 6.7 percent pay cut if you sign up for payments at age 66.
Age 67. People born after 1959 will be able to claim unreduced Social Security payments starting at age 67. And boomers who delay claiming their Social Security benefit until age 67 will get an 8 percent increase in their payments, which would boost a $1,000 monthly payment to $1,080.
Age 68. Baby boomers get 16 percent more if they claim Social Security payments at age 68, increasing a $1,000 Social Security payment to $1,160 a month. Members of Generation Y will get 8 percent more if they sign up for Social Security at 68.
Age 69. Those born in 1960 or later get 16 percent more by claiming their Social Security benefit at age 69, and baby boomers can boost their benefit by 24 percent. A worker could increase a $1,000 Social Security benefit to $1,240 by signing up at age 69.
Age 70. Baby boomers can increase their Social Security benefit by 32 percent by waiting until age 70 to sign up, boosting that $1,000 Social Security payment to $1,320 a month. People born after 1959 will get 24 percent more by claiming payments beginning at age 70. However, only 4 percent of women and 2 percent of men hold out until age 70, according to CRR.
"If the goal is to get as much Social Security income as possible, the way you get that is by claiming as late as possible," says Alicia Munnell, director of the Center for Retirement Research at Boston College. "If you want a higher Social Security benefit, wait until 70." After age 70 there is no additional increase for further delaying your Social Security payments.
Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google Plus or email her at ebrandon@usnews.com.
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Filed under: Family Money, Personal Finance, How to Save Money, Spending, Financial Education
Remember the Soviet Union? If you grew up in the 1980s, as I did, it's not just something you read about in history books. You knew the U.S.S.R. as one of America's greatest rivals. My husband, on the other hand, knew it as home. He was born in Ukraine, then a Soviet republic, and lived there until his senior year in college, when he came to the U.S. as an exchange student.
Although the Soviet Union was a superpower with nuclear weapons, its communist system of state-run industry and collective farms lead to shortages of consumer goods and food. Yes, it's true that Soviet citizens would stand in long lines at stores that had limited supplies, my husband says. There were waiting lists to buy big-ticket items, such as furniture and cars. And, for the most part, people paid with cash, which meant saving for months or even years to make a purchase.
Although my husband has now lived in the U.S. for 20 years, he often acts as if he were in the Soviet Union when it comes to spending money -- and that's not a bad thing. As someone who grew up in a country of abundance, I've learned a lot from a spouse who grew up with little.
Get the most out of what you have. Because most consumer goods in the Soviet Union were expensive and hard to come by, it was important for my husband's family to make the things they could afford to buy last as long as possible. For example, his parents spent about 25 percent of one month's salary to buy a pair of Wrangler jeans for his sister (yes, even off-brand American apparel was a big deal there). Because the jeans had cost so much, they were passed down to my husband. Every time a hole appeared, they were patched until, finally, they were cut off and made into shorts. My husband still will wear things for years. When something can be worn no more, I hear what seems like the sound of defeat when he says he's going to toss it. With our three children, clothing and toys are passed down from one to the next, though I draw the line at making my son wear his sisters' hand-me-downs. Every winter when I contemplate replacing my decade-old dress coat, I talk myself out of it because the one I have is still in great condition.
Fix it, don't replace it. People who lived in the Soviet Union didn't have much of a choice but to fix things if they broke because it was too hard and too expensive to get a replacement. My husband says his dad could fix almost anything with a pair of pliers and some wire. I don't doubt him because I've seen my husband do the same. My first instinct when something broke used to be to replace it. Now I know I can save money by asking my husband to fix it, which he usually can.
Learn how to DIY. For the most part, people living in the Soviet Union didn't hire others to do things for them because there wasn't really a contractor market, my husband says. If you wanted to paint your walls, tile your bathroom, build a table or make curtains, you did it yourself. So when something needs to done around our house, my husband usually will figure out how to do it by searching online or watching a YouTube video. Occasionally, if something is outside the scope of his abilities or will be too time-consuming, he'll agree to hire someone. For the most part, though, his willingness to DIY has saved us thousands of dollars over the years.
Repurpose what you can. My husband's family didn't need Pinterest to prompt them to turn a pallet into a coffee table. They were always repurposing things. And my husband still does. He could buy a set of matching containers for a few bucks to store miscellaneous items on his workbench in the garage. But why waste the money when a few sturdy boxes lying around from other purchases will do the trick? That repurposing mentality has rubbed off on me. When my husband cut down a dead tree in our yard recently (that DIY skill), I had him cut the trunk into equal sizes to use as rustic side tables for chairs we have around a fire pit. Yes, I can repurpose with the best of them -- and save
Be mindful of your spending. As my husband sees it, most Americans aren't mindful of their spending. Credit has made it easy for us to buy things without putting much thought into how much use we'll really get out of what we buy or whether that money could be put to a better use. His family -- like most families in the Soviet Union -- didn't have access to credit and had little money to spare. So every purchase that wasn't a necessity had to be weighed carefully. He still agonizes over whether to buy things both big and small. Admittedly, his reluctance to spend money can drive me, a personal finance journalist who writes about saving money, a little crazy sometimes. But it's good to have that voice of reason reminding me to question whether I'm always making the right decision when it comes to spending money. And our kids are picking up on that mindset -- at least our oldest is. We need to work a little harder with our middle child, who's a natural spender. And our youngest is just 3, so we consider ourselves lucky when he doesn't have a meltdown if we tell him no (which, trust me, is often).
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Filed under: Retail, Personal Finance, Shopping, Shopping Trends, Financial Education
With millennials surpassing baby boomers as the nation's largest living generation and approaching the precipice of their prime spending years, retailers are scrambling to figure out what makes members of Gen Y open their wallets to spend.
Recent statements from Macy's (M) and Whole Foods Market (WFM) announcing plans to open off-price counterparts to their current operations suggest that retailers understand the reality of a shifting consumer value system taking hold in this younger generation. But is slashing prices the solution to winning over millennial business?
If it were, we'd probably see millennials flocking to Walmart (WMT) in droves -- and that's just not happening.
With record student loan debt and an entry into the workforce characterized by vast un- and under-employment courtesy of the Great Recession, millennials have less spending power than previous generations. As such, they tend to be frugal shoppers. But what retailers seem to be forgetting is that frugality isn't just about the bottom line, it's about maximizing total value.
To capture the millennial consumer, retailers need to look beyond price and ask themselves how millennials define and assess value.
"Millennials value access over ownership," says Joan Kuhl, founder of Why Millennials Matter. Kuhl cites the rise of popular services like ZipCar, AirBnB, Uber and Rent the Runway as evidence of millennials' "restless quest for efficiency." These companies have "served them a whole new, on demand, experiential style of living," Kuhl notes.
The Value of Experience
The prioritization of experiences over traditional products is a theme noted by many experts. "They are far more likely to spend money on an international trip with their friends than designer clothes. They value how something will make them feel over stuff," says Christine Hassler, author of "20-Something Manifesto."
Jason Dorsey, lead millennial researcher at The Center for Generational Kinetics, attributes this behavior to the ongoing financial recovery and lack of firm financial footing millennials face. "Experiences are more financially accessible than say buying a house or fancy car,"Dorsey explains.
This kind of cost consciousness also affects how millennials shop for the products they do purchase. Millennial Chelsea Krost notes how her gen Y counterparts "take the extra step to research an item" before buying.
[Millennials] want to build relationships with brands that are honest and open.
"[Millennials] want to build relationships with brands that are honest and open. Part of how millennials define value is by the utility they get for what they purchase and how socially acceptable it is for them to be using the product or engaging in the service. You know if they find a product socially acceptable when they take a selfie with it and post it publicly," says Schawbel.
Reflecting Values
Millennial CEO of Findspark Emily Miethner also notes how millennial value assessments extend beyond utilitarianism. "Millennials consider how the things they buy reflect on them and want brand values to reflect their own values," Miethner says. It's not just about the product and what it does, but how it identifies the individual to others and how that identity makes them feel. That explains the popularity of brands that make outreach part of their business model, like Tom's and Warby Parker.
Hassler has also observed the influence of brand values in shaping millennial consumer habits. "They value brands that have a positive social and environmental impact over the big brands," she says. Findings from Schawbel and Elite Daily's millennial consumer study emphasize the importance of a company's policy on giving back, with 75 percent of millennials ranking those company ideals and efforts as fairly or very important. For a generation burned by the recession and characterized by Occupy Wall Street, it's no surprise that corporate greed is unpopular. Millennials are willing to go out of their way to purchase from competitors with a more favorable history of supporting local communities.
So how do these values and priorities play into price and the reality of millennials' limited spending power? "Less stuff," Miethner says. Quality, of products themselves, the consumer experience, and company values, paired with a fair price point, will beat out quantity for this new largest generation of consumers.
Stefanie O'Connell is a New York City based actress and freelance writer. She chronicles her struggle to "live the dream" on a starving artists' budget at thebrokeandbeautifullife.com and her book, "The Broke and Beautiful Life," is now available.
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Filed under: Identity Theft, Credit Cards, Ripoffs & Scams, Internet Fraud, Debit Cards
NEW YORK -- While carrying around your debit and credit cards to make your daily purchases from coffee to lunch to parking is efficient, the convenience could spell trouble.
Using your credit or debit card to pay for your purchases puts consumers at greater risk of identity theft and losing key personal information.
Here are seven places you should think twice before swiping your debit or credit card to prevent a hacker from intruding into your finances and potentially affecting your credit score.
Online Shopping
With the proliferation of discount shopping websites, make sure the online retailer you are purchasing from has a safe website, because many aren't secure. Before you enter your credit or bank card information, look for the green lock icon without any overlays, said Shaun Murphy, CEO of Private Giant, an Orlando, Florida-based company that plans to launch a security app for smartphones. "Some sites, including Amazon, will not show you a lock icon until you log-in into your account or begin the check-out process," he said. "This means anyone can see what you are shopping for while you are browsing."
Hidden/Out of View Terminals
Be wary of the hidden terminals when you are shopping. It could be the gas pump that is furthest away or an unattended station for automatic checkouts at the grocery store, Murphy said.
"These are sweet targets for credit card skimming devices that can sit there for months without anyone noticing," he said.
Nowadays, skimmers are small enough to fit inside pockets or even hidden within the credit card slots in payment terminals. This means you may unwittingly hand over data when swiping your card at a gas pump, so go inside to pay, said Geoff Sanders, CEO of LaunchKey, a Las Vegas-based decentralized mobile authentication and authorization platform.
"Criminals merely need to pull a car up in front of a pump to surreptitiously install or retrieve a skimmer within a matter of minutes," he said.
Temporary Stores
It's tempting to use your credit card to pay for a T-shirt at a concert or a vendor at a temporary open air markets, swap meets or craft fairs, "thanks to the ubiquity of mobile Internet connections," Parker said.
"These scenarios provide an excellent venue for the grifting of card information," he said. "The consumer is left trusting a vendor that doesn't have an actual retail location."
Outdoor Pay Terminals
Another place that consumers should be wary of using their cards is at outdoor pay terminals including drive through locations at fast food restaurants. Being outdoors means it's another prime location for a skimmer device to be hidden. Skimmers have even been found on the door readers that require users to scan their card before entering the ATM lobby, Parker said.
Cellphone Charging Stations
As consumers spend more time on their smartphones, charging your phone becomes more of a necessity than a preference. Even though it seems like a no-brainer to swipe your card to charge your phone for free when the battery is nearly dead, the convenience could cost you.
"These devices can also dump the information from your cellphone while charging," Murphy said. "This attack method even has a cool name: juice jacking!"
Apps
All apps aren't the same and designed with the same goal in mind. If any of the apps on your laptop, tablet or mobile device ask you for your credit card information outside of the normal app store, check to be sure the program is legit. There is a good possibility that it is a fake, especially the ones the need your immediate attention and claim that your computer has a virus or all of your files are encrypted and need to be unlocked for a price.
Free Services or Trial Period There are a multitude of free services or a trial period that allows you to watch a movie or try some software for a period of time. The catch is that you still need to enter your credit card information before you can start using it. It sounds too good to be true, because it is "almost guaranteed that the service is either going to scam you or sign you up for some paid service that will be impossible to cancel," Murphy said.
What to Use Instead of Your Bank or Credit Card
Re-loadable pre-paid cards and cash are two good options since they are not linked to any personal financial information. Using cash is the best way to avoid overspending, because it makes you more aware of the financial impact that the purchase has on your budget, said Bruce McClary, spokesperson for the National Foundation for Credit Counseling, a Washington, D.C.-based non-profit organization.
If an attacker successfully drained your checking account through your debit card, you could be without cash for quite some time.
"Your bank account will be frozen while the bank investigates the matter, thereby limiting your own access to the account," Weisman said.
If you don't have cash or a pre-paid card handy, a credit card is still a good choice because it may take banks many days to refund fraudulent charges or withdrawals, said Sanders.
"If an attacker successfully drained your checking account through your debit card, you could be without cash for quite some time," he said.
Since nearly all debit cards can be used as a credit card, consumers should always use the credit card feature, Parker said. When the card is used as a debit card with the PIN being entered, you are risk for having both the card and PIN compromised.
"This could allow cybercriminals to directly withdraw cash," he said.
With major retailers and banks such as Target, Sony, eBay, JPMorgan Chase, Home Depot, Anthem, T.J. Maxx and Apple being attacked by cybercriminals and having millions of data records leaked and exposed, consumers should be more concerned about large companies, said Dave Bennett, CTO of IONU, a data security company based in Longmont, Colorado.
"Hackers are going to go after the big targets, not the small fry," he said.
-Written by Ellen Chang for TheStreet.com.
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Filed under: Family Money, Personal Finance, Pets
How much is that doggy (or kitty) in the window? According to the American Society for the Prevention of Cruelty to Animals, the total annual cost of owning a dog is between $1,314 and $1,843. All you crazy cat people will shell out about $1,035 a year for your little purrmeisters.
Those numbers reflect the basics: food, litter, collar, leash, dishes, cage, toys, scratching post, carrier and medical care. But the figures don't encompass a lot of other potential costs, from pet-sitting to insurance increases.
Is it appropriate to put a price tag on the love and affection a pet can bring? Absolutely! In fact, it's essential to look at the lifetime costs of a companion animal before you get one, or before you take on a second -- or third, or fourth -- fuzzy buddy.
Owning a pet is a lifetime commitment. You can't fall in love with a cute Persian kitten and then ignore the needs of the maybe-not-as-adorable grownup cat. That butterball of a pup will need to be fed, walked and socialized regularly, even when you'd much rather sleep in or binge-watch shows on Netflix. Pets are always going to need you -- and they're always going to cost you, which is why you should factor in not just the SPCA data but other potential costs.
Do You Have the Time?
First and foremost, pets need your attention. Although felines tend to be more aloof, some cats are real cuddlers and need a lot of you-time. To ignore a cat's need for affection isn't only cruel, but can be costly. A neglected kitten might shred the curtains or urinate on furniture.
The same is true for man's best friend. A bored or lonely pooch may take out his stir-craziness on your landscape or the furniture. I've personally seen where canines chewed through fences, even chain-link ones.
Dogs can also get you in dutch with the neighbors or even the police by barking constantly in search of attention. Because dogs are pack animals, it's particularly inhumane to adopt and then neglect one.
Don't have enough time to devote to a pup? Don't get one. If you get very busy at work sometimes -- say, tax season at your accounting firm -- then budget for some outsourced affection by paying someone to tend to your pet or enroll Fido in a doggie day care center.
More Than Just Kibble and Litter
When choosing a cat or dog, beware the kinds of costs that novice owners can't anticipate. Certain breeds need specific types of grooming, so unless you plan to buy clippers you'll need to budget for visits to the pet beauty salon.
Are you willing to clean your pet's teeth? It'll save money (and pain for the animal) in the long run, but not everyone wants to do it. If that's you, then you'll have to pay the vet to do it.
Incidentally, those vet visits will likely become more frequent as your pet ages and health problems crop up. Some people deride those SPCA figures as ridiculously high. But anyone whose dog developed hip dysplasia or whose cat has been attacked by a raccoon can tell you that pets can run up a big bill.
Note: One way to keep health costs way down is to keep your animals indoors or in a fenced yard. Dogs and cats do not need to roam, and owners who let them do so are risking the pet's health and the associated costs.
Suppose your pet has, uh, digestive issues? Fork over additional cash for diagnosis and then the necessary (and more expensive) special pet foods. Add a little extra for rug cleaning, too.
Love to travel? Your trips just got more expensive because you'll either have to board the animal or pay someone to look in on your pet. And if you want to travel with Fido or Fluffy, prepare to pay hundreds of dollars for the privilege.
That Is NOT a Chew Toy!
Pet behavior sometimes seems malevolent, but you must remember that animals don't reason the way we do. That plush sofa you spent so much money on makes a wonderful scratching post. Pets don't understand why they shouldn't gnaw on your expensive leather shoes (those things are delicious!).
It's possible to train them not to do these things. (Need to hire a dog trainer? Ka-ching!) Until that happens, you're on the hook for repairs or replacements. If you're a renter, the landlord will probably want that dug-up landscape or chewed-upon fence picket fixed right now.
Depending on the type of dog you get, you may also have to pay higher homeowner or renters insurance premiums. Large dogs or breeds labeled as aggressive can cost a lot more, depending on the insurer.
Speaking of insurance: If your dog bites the mailman or your cat scratches a visitor and they file a claim, your insurance rates will likely go up. That is, unless you decide to pay out of pocket to make things right. Even the best critter sometimes acts out, so it's always a possibility. Sometimes they even hurt their owners. My sister broke her wrist after being tripped by her excited pup. The result was nine missed weeks of work (she's a dental hygienist). Guess who didn't have nine weeks' worth of sick leave?
Congratulations! You're a Pet Owner!
If you're ready to commit to your first pet, or to add to your current menagerie, get smart about ways to keep costs down. To be clear, that does not mean cheap out on necessary pet care and comfort. What it does mean is using your money wisely.
For starters, pets don't really need lots of toys or -- heaven forbid -- Halloween costumes. They do need vaccinations, spaying or neutering, decent food and supplies, and yearly visits to the veterinarian.
This doesn't have to bust the budget. For help, check out these Money Talks News articles:
And if you don't have a lot of time? Don't kid yourself that your loyal pup or purring kitten will wait patiently for you at home, require a few minutes of your time and then stay out of your hair.
If that's the kind of pet you want, check out a robotic dog or cat. But don't subject a living, breathing creature to distracted or indifferent care. Our animal friends deserve better.
Readers: What are some of the ways you save money while still providing good homes for your furry companions?
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Filed under: Advertising & Marketing, Food & Beverage, Restaurants, Investing
The Chips Ahoy Creme Donut is filled with cookie dough buttercreme and frosted with chocolate icing before being topped off with crumbled chocolate chip cookie pieces. The Chips Ahoy Crunch Donut is a traditional ring-shaped treat with the same chocolate icing and crumbled Chips Ahoy bits.
It's not the only products that Dunkin' Donuts is introducing this month based on Mondelez products. The iconic Oreo is also playing a major role here as iced coffees and Coolatta frozen beverages will be available in either Oreo or Chips Ahoy flavors.
Topping things off, the cookie takeover at Dunkin' is culminating in an online Cookie Dunk Instant Win Game where folks can go to CookieDunkGame.com to dunk virtual cookies in pursuit of prizes.
Filling Holes
Dunkin' Donuts doesn't usually incorporate popular brands into its menu. Outside of the seasonal Peeps doughnut that the chain introduced during Easter last year -- and, yes, we're talking about those very Peeps marshmallow chicks as chewy toppings -- Dunkin' usually likes to fly solo.
It's a strategy that's hard to question in light of the chain's success. There were 11,367 store locations by the end of March, up from the 10,901 units open a year earlier. It didn't need to team up with another company to put out a croissant doughnut, a premium-priced addition that it continues to credit for strong sales growth.
However, the name of the game these days is to partner up. We've seen Yum Brands' (YUM) Taco Bell turn to Doritos-dusted taco shells, Cinnabon-sweetened coffee, and even Starburst-flavored frozen beverages. Pizza chains that used to go it alone have turned to Fritos as toppings and Hershey-branded dessert treats.
There's strength in combination, even if it means licensing fees, higher food costs, or promoting someone else's product.
Sweet Rewards
The marriage of cookies and doughnuts -- and cookies and coffee -- makes sense. Dunkin' parent Dunkin' Brands should know. It also watches over an ice cream empire that includes 7,574 Baskin-Robbins scoop shops, even though we may never see an ice cream doughnut or a doughnut ice cream cake.
Dunkin' also has turned to big partners to broaden the reach of its signature coffee outside of its stores. Jelly giant J.M. Smucker (SJM) is its distributor, and it recently expanded its partnership with Keurig Green Mountain (GMCR) to get Dunkin' coffee sold in K-Cups for Keurig machines beyond just its doughnut shops.
This is the new normal for quick-service eateries. This is the new combo meal. That's not going to change, especially if rivals are doing it. And, yes, in case you were wondering, Dunkin' nemesis Krispy Kreme (KKD) is already offering an Oreo-branded "Cookies and Kreme" doughnut.
Two brands are apparently better than one.
Motley Fool contributor Rick Munarriz owns shares of Keurig Green Mountain. The Motley Fool recommends Keurig Green Mountain. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
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Filed under: Technology, General Motors, Automotive Industry, Transportation & Logistics, Investing
For now, it's just a prototype. But it's a big step forward for a program the agency has been working on with automakers since 2008, one that could put an end to drunken driving for good.
Testing the Driver
The car uses a technology called "Driver Alcohol Detection System for Safety." The DADSS system detects when a driver is intoxicated with a blood alcohol concentration at or above 0.08, which is the legal limit in all 50 states. If an intoxicated driver is detected, the car won't move.
But how does it work? There are actually two different technologies being developed under the DADSS program. One is a system that quietly checks the amount of alcohol in a driver's breath as she breathes normally after sitting down in the car. The other is a touch-based system that measures blood alcohol levels under the surface of the skin on the driver's fingertip with a sensor that uses an infrared light.
The idea is that the touch-based system could be mounted in the car's starter button, somewhere the driver will need to touch in order to get the car running. But either or both mechanisms could be included in the version of the DADSS system that comes to market in a few years.
NHTSA Administrator Mark Rosekind said that his agency has no plans to try to make the technology mandatory on new cars. But he thinks it'll become very popular and widespread even without a government mandate. Here's why:
An Unobtrusive Way to Stop Intoxicated People From Driving
Current systems to prevent drunken driving are cumbersome. They require drivers to breathe into a sensor device before starting the car. That has greatly limited their use.
What makes the DADSS system different is that it's passive -- it works without any action at all from the driver. Like an airbag, it works in the background, without any effort needed from the driver -- until it's needed. Then it steps in to prevent an intoxicated person from driving.
NHTSA officials think the technology will be very popular. One audience that's expected to embrace it very quickly: parents of teen drivers. While the system will default to a blood alcohol limit of 0.08, in line with state drunken-driving laws, it can be set lower, all the way down to a "zero tolerance" mode. That mode would stop a driver with any detectable level of alcohol from driving. NHTSA thinks that will appeal to parents of drivers younger than 21 years old -- and it's probably right. But one could easily imagine other applications for a "zero tolerance" mode -- vehicles driven by on-duty public safety officials, for instance.
The DADSS technology is still under development, but it's coming. Rosekind hopes to have the technology available for testing, probably by a government or commercial vehicle fleet, within a few years. Once it's proven, he hopes it will be offered as an option by automakers. He's convinced that demand will be strong as parents of teens, operators of commercial fleets, and others demand it on their new cars. It could be widespread within 10 or 15 years.
And it's likely to be widely available as soon as it's perfected. Nearly all of the automakers that do business in the U.S. have signed on to the program. Jeff Boyer, General Motors' (GM) vice president of global safety, said that the technology "has the potential to prevent tens of thousands of needless deaths and injuries every year."
Boyer emphasized the passive, unobtrusive nature of the technology, comparing it to air bags and electronic stability controls. That's a strong hint that GM will be in the forefront of adopting the new anti-drunk en-driving system. Given the widespread publicity around the dangers and costs of drunken driving -- and the likely demand from concerned parents of teen drivers -- its competitors are likely to follow suit quickly.
Motley Fool contributor John Rosevear owns shares of General Motors. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
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Filed under: Company News, General Electric, Banking, Mergers & Acquisitions, Financial Services
The U.S. Sponsor Finance business, which includes Antares Capital, GE Capital's lending business to private equity-backed middle market companies, will be sold to the Canada Pension Plan Investment Board, alongside a $3 billion bank loan portfolio.
GE is looking to sell most of the assets of its $500 billion GE Capital over the next 18 months, but plans to keep the financing components that relate to its industrial businesses. The Fairfield, Connecticut, company is transforming itself back into an industrial conglomerate that makes large, complicated equipment for other businesses.
Investors had long pushed for GE to get rid of its finance unit, though it had been extremely profitable, as federal regulations and tough market conditions made it less lucrative and at times, more risky.
GE spun off its consumer credit card business, Synchrony Financial, into a separate publicly traded company in July. It sold a 51 percent stake of NBC Universal to Comcast (CMCSK) for $13.75 billion in 2011. Two years later, Comcast bought GE's remaining 49 percent stake in NBC Universal for $16.7 billion.
General Electric Co. spun off its insurance business into a separate publicly traded company, Genworth Financial Inc. (GNW), in 2004. It sold its reinsurance business to Swiss Re in 2006, and a year later sold its plastics business to Saudi Basic Industries Corp. GE sold silicones to private investment group Apollo Management for $3.8 billion in 2006 and sold its security business to United Technologies for $1.82 billion in 2010.
GE said Tuesday that it is on pace to execute sales of $100 billion by the end of the year.
The U.S. Sponsor Finance transaction is targeted to close in 2015's third quarter.
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Filed under: Wall Street Watch, Stocks, IPOs, Investing
But judged on its own merits, 2015 has actually been rather lively. According to data compiled by IPO specialist Renaissance Capital, so far 68 IPOs have been priced, with total proceeds raised of over $12 billion.
And some of these new stocks are from very familiar companies -- Web services provider GoDaddy (GDDY), trendy hamburger chain Shake Shack (SHAK) and online crafts and hobbies portal Etsy (ETSY) have all hit the exchanges this year.
Several other big names are primed to make their market debuts by the time we drink New Year's Champagne. Here's a look at three issues that are sure to get plenty of attention.
PayPal
This well-known electronic payments system is getting ready for what is to be its second IPO. The first was in 2002, but PayPal didn't last long as an independent, publicly traded company. Auction powerhouse eBay (EBAY) snapped it up for a cool $1.5 billion and has operated it as a subsidiary ever since.
That was a good move. PayPal is the engine driving eBay's growth. In Q1 2015 the division saw its net revenue rise by 14 percent on a year-over-year basis, while the top line of the marketplace segment (i.e., the auctions and sales eBay is known for) declined by 4 percent.
With that kind of performance, it was perhaps inevitable that investors would demand that PayPal be spun off into an independent company (in order to theoretically be freed from the drag of marketplace's lackluster growth). Management is heeding the call, and once again PayPal is to become a standalone company.
In its latest public communication on the subject, the subsidiary didn't provide a more specific time frame for its IPO than "the second half of this year." It did reveal that it'll have the same ticker symbol -- PYPL -- and trade on the same exchange -- the Nasdaq -- as it did during its brief, publicly traded life in 2002.
Fitbit
This maker of a range of activity trackers is perfectly poised to take advantage of the high popularity of these products with its upcoming IPO.
On the back of its successful offerings, which include the Flex, Charge and Surge, the company's revenue has ballooned lately. Its $745 million in revenue for fiscal 2014 was a whopping 175 percent higher than the previous year's figure.
That's not all that unusual for a middle-stage, tech-slanting company, but a bottom-line profit is. Fitbit netted one amounting to nearly $132 million last year.
Several financial heavyweights like those numbers. Big-time investment banks Morgan Stanley (MS), Bank of America (BAC) Merrill Lynch and Deutsche Bank (DB) Securities are lead-managing the firm's IPO.
The issue has been filed with the Securities and Exchange, but the company hasn't yet specified how many shares it'll sell, what price they might be listed at, or the IPO date. Fitbit did say it intends to list on the New York Stock Exchange under the ticker symbol FIT. In its S-1 filing FitBit says its mission is to "[help] people lead healthier, more active lives by empowering them with data, inspiration, and guidance to reach their goals." As of of March 31, 2015, it had sold more than 20.8 million devices.
Fogo de Chao
Another hot area on the stock market is the restaurant sector, so the IPO of this chain of Brazilian steak houses seems well-timed.
Food service IPOs are becoming more plentiful than a sack of french fries because some restaurant stocks have performed spectacularly after debuting on the market.
The model here is Tex-Mex chain Chipotle Mexican Grill (CMG). This well-liked burrito chain hasn't only grown its revenue and profit many-fold over the years, but its sock is one of the best-performing stocks over its lifetime. It's risen nearly 1,300 percent since its 2006 IPO. By comparison, the S&P 500 has increased 64 percent.
The 35-restaurant strong Fogo de Chao has numerous competitive advantages. It'll be the only traditional Brazilian restaurant chain on the exchange, for one. For another, it's also a money-maker, growing its top line by a meaty 30 percent from fiscal years 2012 to 2014. It flipped to a net profit of $17.6 million in the latter year.
The company hasn't specified a particular date for its IPO, but it stated in a regulatory filing that it would like to draw proceeds up to $75 million. The stock will be listed on the Nasdaq under the ticker symbol FOGO, and the lead underwriters are JPMorgan Chase's (JPM) J.P. Morgan unit and Leucadia's (LUK) Jefferies.
Motley Fool contributor Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Bank of America, Chipotle Mexican Grill, eBay and Leucadia. The Motley Fool owns shares of Bank of America, Chipotle Mexican Grill, eBay, Etsy, JPMorgan Chase and Leucadia. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
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Filed under: Savings Experiment, Shopping
Big ticket items like mattresses and rugs cost a lot, and it's in your best interest to make them last as long as possible. Here are some ways to extend the life of your major purchases and really make your dollar stretch.Let's start with mattresses. On average, a decent model will last for about 7 to 10 years before it starts to wear out. However, by using a mattress cover, flipping it a few times a year and telling your pet to sleep on the floor, you can keep it for years past its prime.
If your bed is starting to feel lumpy and stiff, don't just kick it to the curb. Try using a memory foam topper instead. For around $50, it'll make your bed more comfortable, so you'll be able to hold onto your mattress and your money.
We all know that vacuuming your carpet and having it shampooed every couple of years helps to keep it looking new. What may come as a surprise is that your bare feet can do as much damage to your carpet as your shoes. That's right -- your skin produces oil naturally, and that very same oil will attract dirt and make your carpet look a lot older than it is.
To stop that from happening, keep a shoe rack and a basket of house slippers on hand. They'll keep the dirt away and keep your feet feeling cozy.
Finally, when it comes to area rugs, here are a few steps you can take now to protect it for later on. Roll up your rug and dust underneath it, and while you're there, check for any sign of insects -- that's where they like to live. Get a good rug pad, too. It'll keep the fibers from getting pulled in different directions, while reducing wrinkles as well. Rotate your rug once or twice a year, especially if it's exposed to sunlight or covered by furniture. It'll help it wear evenly.
Remember these tips to get the most out of your mattresses, carpets and area rugs. You'll realize that by doing the little things, you can maximize their lifespan in a big way.
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Filed under: Company News, Layoffs, Banks
LONDON -- HSBC Holdings (HSBC), Europe's largest bank by market value, will cut up to 25,000 jobs globally to reduce costs and shift its center of gravity further toward the fast-growing Asian economies where it started out 150 years ago.
The London-based group, which is worth 120 billion pounds ($184 billion), about the same as U.S. giant Bank of America (BAC), said Tuesday it is "redeploying resources to capture expected future growth opportunities."
Though it hasn't yet decided whether to move its headquarters, the bank is clear on where it thinks its commercial future lies -- China and the Asia-Pacific region.
The bank has suffered a series of regulatory fines and crackdowns in Europe and the U.S. and now wants to capitalize on Asia's rapidly expanding class of newly wealthy. It intends to grow its asset management and insurance businesses, for example, in China's rich manufacturing heartland in Guangdong province and in South Asia, where economies like Indonesia are booming.
Many Western banks have sought to bolster operations in Asia, but HSBC has the advantage of already having a major presence there. Around 75 percent of its 2014 profits were generated in the region, even though it only has about a third of its staff there and its assets are dwarfed by those it controls in Europe. HSBC | CreditHSBC has historic ties to the region. It was founded in Hong Kong in 1865 when the city was a British colony in order to finance growing trade between China and Europe, much of it involving opium. Its original name says it all: The Hongkong and Shanghai Banking Corporation.
The company only became London-based in 1992 to meet the regulatory requirements of its acquisition of Midland Bank at the time.
"The world is increasingly connected, with Asia expected to show high growth and become the center of global trade over the next decade," said Stuart Gulliver, HSBC's chief executive. "We recognize that the world has changed and we need to change with it."
HSBC, which has operations in over 70 countries and around 51 million customers, aims to cut costs by $4.5 billion to $5.0 billion by the end of 2017 and reduce the number of full-time employees by around 10 percent, or between 22,000 and 25,000.
It intends to sell its operations in Turkey and Brazil, reducing its workforce by another 25,000. HSBC said it plans to maintain a presence in Brazil to serve large corporate clients.
About 8,000 of HSBC's 48,000 workforce in Britain will lose their job, with a number of branches earmarked for closure. The bank, which is also to rename its remaining U.K. branch network, hopes many of the job cuts globally will come from attrition.
A top union official in Britain said the cuts were the latest example of a workforce being punished for the misconduct of senior management. HSBC has paid billions in fines globally to settle investigations of market rigging and allegations it helped clients evade taxes and launder money.
"Front-line staff have suffered time and time again as they are forced to pay for the mistakes of others with their jobs, their terms and conditions and their reputation," said Dominic Hook of Unite union.
A further concern for British staff is the possibility that the bank will move its headquarters out of London. HSBC said it will make a decision this year.
The bank has already warned about the economic risks facing Britain if the country opts to leave the European Union in a referendum that is due by the end of 2017. It's also complained about the cost of a levy that the British government puts on banks -- HSBC is set to pay around $1.5 billion this year alone on that.
HSBC's announcement comes a day ahead of a major speech from British economy minister, George Osborne, who many think is considering pulling back the bank levy.
"We think the financial logic for HSBC to escape the clutches of the U.K. -- and Europe -- is overwhelming," said Ian Gordon, an analyst at Investec. "What possible reason is there to stay?"
HSBC also said Tuesday it wants to return to profitability its global banking and markets division, which have been hit by tougher regulations since the financial crisis. In 2014, HSBC saw its post-tax profit fall to $14.7 billion from $17.8 billion the year before, largely because of fines and settlements with regulators.
Shares in HSBC closed down 0.9 percent at 614 pence in a weaker market in London.
-Kelvin Chan in Hong Kong contributed to this report.
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Filed under: Earnings, Travel Industry, Stocks, Airfare, Investing
American, the world's biggest airline company, lowered its second-quarter forecast for a key revenue figure and pretax profit margin. Southwest reported that its key revenue figure tumbled 6 percent in May.
Southwest CEO Gary Kelly said his airline was on track for a record profit in the second quarter. But he added that Southwest is beginning to scale back its planned flying in the second half of the year because the economy is weaker than expected. Southwest plans to expand flying again in 2016, though not as aggressively as in 2015.
Both reports added to investors' concern that the airlines may be adding flights faster than the pace of travel demand.
In midday trading, shares of American Airlines Group (AAL) were down 22 cents to $39.64 after slipping as low as $38.45; and Southwest Airlines (LUV) was down $1.58, or 4.4 percent, to $34.53. Shares of United Continental Holdings (UAL), Delta Air Lines (DAL), JetBlue Airways (JBLU), Alaska Air Group (ALK) and Spirit Airlines (SAVE) were also down.
American said that it expects revenue for every seat flown one mile in the second quarter will be 6 percent to 8 percent lower than a year ago. That's worse than the previous forecast of a decline between 4 percent and 6 percent.
The company, which also operates US Airways and the American Eagle regional airline, said passenger traffic in May rose 0.7 percent while it increased passenger-carrying capacity by 2.1 percent, leading to more empty seats than a year earlier.
Southwest Airlines said the revenue-per-seat figure dropped 6 percent in May, and it expects a decline of 4 percent to 5 percent for the April-through-June quarter. The decline indicates that Southwest likely is getting lower average prices as it aggressively adds flights, especially in Dallas.
Overall, Southwest's traffic grew 8.5 percent, which was enough to offset a 7.6 percent increase in capacity. The average flight was 84.4 percent full, which Southwest said was a record.
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Filed under: Apple, Computer Industry, Consumer Issues, Mobile Technology, Music & Entertainment
When Apple launches its Apple Music streaming service at the end of June, it will affect things big and small in the music industry.
Hundreds of millions of iPhone and iPad users in more than 100 countries will get to try the $10-a-month service for free for the next three months when it is pushed to their devices with a free upgrade.
They'll get unlimited access to tens of millions of songs during the trial, and afterward be required to pay a monthly fee for access, instead of paying for each album or song download.
"It'll change the way you experience music forever," CEO Tim Cook promised Monday at Apple's annual conference for software developers, held in San Francisco.
It could become one more thing that keeps current iPhone and iPad users inside the Apple Inc. (AAPL) ecosystem, while enticing others in.
Here's a look at some of the major aspects of Apple Music:
Integration With Siri
Subscribers will be able to ask Siri, Apple's mobile digital assistant, all sorts of unusual questions about music, and have any of millions of tunes play back in response.
Executive Eddy Cue demonstrated a few of them Monday, including asking for a playlist of the top 10 hits in the alternative genre, asking for a song from the soundtrack of the movie "Selma," and even asking for the top song from May 1982. (It was Joan Jett & the Blackheart's "I Love Rock 'n' Roll.")
Using Siri's artificial intelligence and one's voice could come in handy when working out, going on a jog or driving a car equipped with Apple's Car Play.
Real Radio Over the Internet
In modern times, Internet radio has been defined by automated playlist generators like Pandora, Songza and others. Apple is changing that game by bringing back living, breathing DJs. It plans to run "Beats 1," a live 24/7 radio station hosted by DJs -- including former BBC host Zane Lowe -- in Los Angeles, New York and London. The service will be free to users with an Apple ID.
It will also offer standard genre-based Internet radio stations, this time with playlists curated by humans, instead of the algorithms that power the soon-to-be-disappearing feature, iTunes Radio.
Connect
Apple is opening a new platform for artists that allows them to release to fans content such as lyrics to an upcoming song, behind-the-scenes video, or even new tracks. Any user can access "Connect" through a tab on the Apple Music app, and can follow artists and access their feeds. Only subscribers will be able to view, save and like the content.
Requiring payment for what might be considered promotional content is new to subscription services, but super-fans may be drawn in.
Apple Music vs. My Music vs. Beats Music
Apple device users who have bought songs or albums on iTunes needn't worry. Their music will still be on their devices, and in many cases, still saved to the cloud.
Music that isn't available for streaming but still for sale on iTunes, like songs from the Beatles, can be integrated into playlists. Subscription music can be saved for offline listening alongside downloads.
And the some 300,000 subscribers to Beats Music, which Apple bought along with the headphone line for $3 billion last year, will have the opportunity to transfer their playlists over to Apple Music, at which point, their Beats subscription will be canceled.
Recommendations
Apple touts its human curation so much, it's making you pay for it. A new "For You" tab will offer subscribers music suggestions based on artists and genres they say they like, as well as what they actually listen to. A team of music experts is said to be behind every pick. This feature is a nearly direct import from Beats Music.
"These people are going to help you with the most difficult question in music: What song comes next?" said Apple executive Jimmy Iovine, who helped develop the service.
Better Deal for Record Labels, Artists
Music fans who have read about artists and record labels complaining about the tiny royalties they get from streaming services may have something to cheer about.
According to two people familiar with the matter, last-minute deal-making did result in a better streaming deal for record labels and artists.
Instead of sharing the industry-standard 55 percent of subscription streaming revenue with labels and artists, Apple will share around 58 to 60 percent. Music publishers in charge of songwriting royalties also saw a slight bump in their cut from the standard 10 to 12 percent to about 14 percent of subscription revenues, the people said. The people spoke on condition of anonymity because the deals are confidential.
Android
Apple is letting users of Google's (GOOG) competing Android mobile operating system use a version of the Apple Music app beginning this fall. But those users will have to pay to access Beats 1 and some features of Connect that Apple device users will get for free.
Can Apple Come From Behind?
Industry analysts expect Apple's biggest advantages -- its huge user base, ability to sell its services with attractive TV ads, and global reach -- will get the service up and running successfully.
Whether it will dramatically raise the popularity of streaming services is unclear. Currently, Apple's Beats Music serves just a tiny fraction of the 41 million paying music subscribers globally.
Russ Crupnick, managing partner of research firm Music Watch Inc., says he's not sure whether Apple has come up with the right package of services to make paid music streaming at $10 a month take off.
"You've got to really change the mindset of consumers to have them say, 'Wow, this makes it worth the money,' " Crupnick says. "I still think you'll have a lot of people who will say, 'No thanks, I'll take the 99-cent track. There are a lot of places where I can listen to music, thank you very much.' "
-Technology writer Anick Jesdanun in San Francisco contributed to this report.
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Filed under: Market News, Banks, Biotechnology, Consumer Goods
NEW YORK -- U.S. stocks ended flat Tuesday though the S&P 500 snapped three days of losses as financial and consumer staples shares bounced.
Shares of biotech companies were among the biggest drags, including Biogen (BIIB), down 1.1 percent at $382. The Nasdaq biotech index was down 0.7 percent.
The S&P financials were up 0.3 percent, helped by prospects for higher interest rates, while S&P consumer staples were up 0.5 percent.
It's a market that's searching for a rationale at this point ... and waiting for next week's [Fed] meeting.
"It's a market that's searching for a rationale at this point ... and waiting for next week's [Fed] meeting," said Quincy Krosby, market strategist at Prudential Financial, which is based in Newark, New Jersey.
The Dow Jones industrial average (^DJI) fell 2.51 points, or 0.01 percent, to 17,764.04, the Standard & Poor's 500 index (^GSPC) gained 0.87 points, or 0.04 percent, to 2,080.15 and the Nasdaq composite (^IXIC) dropped 7.76 points, or 0.15 percent, to 5,013.87.
The Dow Jones transportation average ended down 0.3 percent, just shy of correction territory, which would be a drop of 10 percent from its Dec. 29, 2014, record close of 9,217.44.
Data released Tuesday showed that U.S. job openings surged to a record high in April and small business confidence increased in May, signs that the economy was regaining momentum after stumbling at the start of the year.
Movers and Shakers
Shares of Hovnanian Enterprises (HOV) dropped 9.8 percent to $2.86, its lowest since 2012, after disappointing results.
Lululemon (LULU) shares rose 11 percent to $68.27 after the Canadian yoga-apparel retailer raised its full-year revenue and earnings forecast.
Sage Therapeutics (SAGE) jumped 15.4 percent to $86.71 after its experimental injectable drug was found to be effective in treating postpartum depression.
Declining issues outnumbered advancing ones on the NYSE by 1,976 to 1,066, for a 1.85-to-1 ratio on the downside; on the Nasdaq, 1,645 issues fell and 1,093 advanced for a 1.51-to-1 ratio favoring decliners.
The S&P 500 posted 10 new 52-week highs and 9 new lows; the Nasdaq composite recorded 88 new highs and 46 new lows.
What to watch Wednesday:
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Filed under: Technology, ETFs, Financial Services, Financial Advisors, Index Funds, Investing
If you have recently researched investment management services, chances are that you have come across the term "robo-adviser."
Who are these robo-advisers and can you trust them with your financial future?
A robo-adviser is an online investment platform that uses algorithms to determine asset allocations for investors and manages their investment dollars with minimal human intervention. Because they utilize technology rather than active management by a human, robo-advisers charge significantly lower fees than what most financial advisers typically charge.
"It's a fast growing business today, with something close to $20 billion in assets under management," says David Larrabee, director at CFA Institute, the association of investment professionals. "Robo-advisers are here to stay and have demonstrated there is demand."
According to recent research by A.T. Kearney, approximately $2 trillion will flow into robo-adviser platforms over the next five years.
Why Robo-Advisers
What is driving the explosive growth in the robo-adviser marketplace? Experts point to the demographics, account sizes, and low costs as the main factors.
With a robo-adviser, clients open an account and typically start by answering a series of questions about their age, tolerance for risk, and investment goals. The platform provides an asset allocation based on their answers. An older investor nearing retirement, for example, will be recommended a more conservative asset allocation than a younger investor who will be working for decades to come.
Low-Cost Index Investing Keeps Emotions Out of Your Investment Strategy
Robo-advisers typically don't trade individual stocks or offer specific stock trading advice. Rather, they tend to invest in low-cost ETFs, which provide instant diversification, as well as tax efficiency.
Most robo-advisers adhere to a buy-and-hold, passive investing strategy. They don't pick stocks or try to time the market. Instead, robo-advisers are charged with figuring out the exposure investors should have to stocks, bonds, international investments, and other asset classes, and use each individual investor's age, expected retirement date and risk profile to come up with an asset allocation and stick to it, regardless of day-to-day market movements.
Account Rebalancing Keeps Your Investment Goals on Track
Although robo-advisers do not react to stock movements, they do track the markets on a daily basis. If market swings move clients' portfolios out of balance with respect to their recommended asset allocation, they rebalance accordingly, while being mindful of creating taxable events or incurring trading fees.
As a result, investors with these platforms do not have to get on the phone with their money manager if one company is driving an entire sector down. They can rest assured that, provided that they are in a properly diversified portfolio, they will be able to stay the course and ride out any market downturn.
Investors who need estate planning or have complex investment portfolios may want the hand-holding that comes with a financial adviser, or simply find a good lawyer and then choose low-cost index funds or ETFs on their own. For many investors, however, robo-advisers offer a way to grow their investment nest egg without getting hit with high costs and fees.
Donna Fuscaldo is a contributing writer at SigFig. Nearly a million people use SigFig to track, improve and manage over $300 billion in investments.
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