Personal Finance

Iceland Finds ‘Major Success’ Moving To Shorter Workweek

As many people contemplate a future in which they don’t need to commute to offices, the idea of working less altogether also has its appeal.

Now, research out of Iceland has found that working fewer hours for the same pay led to improved well-being among workers, with no loss in productivity. In fact, in some places, workers were more productive after cutting back their hours.

Granted, Iceland is tiny. Its entire workforce amounts to about 200,000 people. But 86% of Iceland’s working population has moved to shorter hours or has the right to negotiate such a schedule, according to a report by the Association for Democracy and Sustainability and the think tank Autonomy. This follows two successful trials, involving 2,500 workers, that the report called “a major success.”

The trials were conducted from 2015 to 2019. Workers went from a 40-hour weekly schedule to 35- or 36-hour weekly schedules without a reduction in pay. The trials were launched after agitation from labor unions and grassroots organizations that pointed to Iceland’s low rankings among its Nordic neighbors when it comes to work-life balance.

Workers across a variety of public- and private-sector jobs participated in the trials. They included people working in day cares, assisted living facilities, hospitals, museums, police stations and Reykjavik government offices…read more.

The Year Of The Retail Investor Keeps Getting Bigger

Retail investors will have their say on the stock market this year, and the recent GameStop and AMC Entertainment stock squeezes were only the beginning.

According to JPMorgan’s global markets strategist, Nikolaos Panigirtzoglou, retail investors have invested nearly $500 billion into equity funds this year…Click for full article.

How to retire a millionaire

 

Retiring a millionaire isn’t as farfetched as it may seem. With a bit of saving, investing, and a proper plan, you can be well on your way to hitting $1 million — or more — by the time you reach retirement age.

In fact, the number of retirement millionaires have reached record levels, according to data from Fidelity Investments, the nation’s largest provider of 401(k) savings plans. Retirement savers with a 401(k) balance of $1 million or more increased to 365,000 during the first quarter of 2021, while the number of those with an IRA with a balance of $1 million or more jumped up to 307,600.

Here’s how you can retire a millionaire:

Saving is the key to reaching almost any financial goal, especially if you want to retire with a million-dollar portfolio. But the trick isn’t necessarily how much you save, but when you start.
“One of the huge keys to success here is to take advantage of your biggest asset: time,” said Tony Molina, CPA and senior product specialist at Wealthfront.
Most experts recommend contributing at least 10% to 15% of your income to your retirement fund. But if you’re not able to contribute that much, don’t let that discourage you. Saving any amount can put you significantly ahead in reaching your retirement goals, thanks to compound interest.

Where Shortages Show up: The WTF Plunge in Retail Inventories

How messed up the economy has become, fueled by government moolah and Fed manna, when nothing and no one was ready for it

When the government spends trillions of borrowed dollars to boost demand from all sides, and when the Fed prints trillions of dollars to monetize the borrowing binge by the government and also to inflate asset prices so that asset holders feel richer and start spending these gains (the Fed’s doctrine of the Wealth Effect), well, then you’re going to get some demand, a lot of demand, suddenly, particularly for goods. And this sudden demand has been ricocheting through the economy for over a year.

And supply? Duh. Maybe they thought supply would suddenly materialize. But supply chains are long and complex, and then there were all kinds of additional issues, ranging from container shortages, spiking ocean-freight container rates, the blockage of the Suez Canal, a capacity shortage among container carriers and freight companies, a ferocious winter storm that hit the Texas petrochemical industry and semiconductor plants that then created further snarls in supply chains, while a fire at a chip plant in Japan wreaked further havoc with the semiconductor shortage for automakers.

Among commodities, sudden demand from homebuilders and remodelers for things like lumber caused all kinds of distortions and supply issues. And retailers ran out of products across a wide spectrum, from bicycles to hot tubs and importantly – since they weigh so heavily in retail sales – new and used vehicles.

“Turns out it’s a heck of a lot easier to create demand than it is to bring supply up to snuff,” Jerome Powell mused at the press conference. And now the economy has the biggest mess in decades to deal with.

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Slowly At First, Then All At Once

 

Bull markets always seem to end the same – slowly at first, then all at once.

My recent discussion on why March 2020 was a “correction” and not a “bear market” sparked much debate over the somewhat arbitrary 20% rule.

“Price is nothing more than a reflection of the ‘psychology’ of market participants. A potential mistake in evaluating ‘bull’ or ‘bear’ markets is using a ‘20% advance or decline’ to distinguish between them.”

Wall Street loves to label stuff.  When markets are rising, it’s a “bull market.” Conversely, falling prices are a “bear market.” 

Interestingly, while there are some “rules of thumb”for falling prices such as:

  • A “correction” gets defined as a decline of more than 10% in the market.
  • A “bear market” is a decline of more than 20%.

There are no such definitions for rising prices. Instead, rising prices are always “bullish.”

It’s all a bit arbitrary and rather pointless.

The Reason We Invest

It is essential to understand what a “bull” or “bear” market is as investors.

  • “bull market” is when prices are generally rising over an extended period.
  • “bear market” is when prices are generally falling over an extended period.

Here is another significant definition for you.

Investing is the process of placing “savings” at “risk” with the expectation of a future return greater than the rate of inflation over a given time frame.

Read that again.

Investing is NOT about beating some random benchmark index that requires taking on an excessive amount of capital risk to achieve. Instead, our goal should be to grow our hard-earned savings at a rate sufficient to protect the purchasing power of those savings in the future as “safely” as possible.

As pension funds have found out, counting on 7% annualized returns to make up for a shortfall in savings leaves individuals in a vastly underfunded retirement situation. Moreover, making up lost savings is not the same as increasing savings towards a future required goal.

Nonetheless, when it comes to investing, Bob Farrell’s Rule #10 is the most relevant:

“Bull markets are more fun than bear markets.” 

Of this, there is no argument.

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