Stock Market Crash in 2008 - Will It Recover by 2010?

Nobody can really predict when the stock market turmoil will peak, including the recession, but a chart and article from the Daily Kos gives us a quite legitimate starting point to guesstimate on when the economy is prospering (again.)

The S&P Market Index Chart

From this chart, the block represents a year and the columns represent a range of return on the S&P index.

We can learn that in the middle column, those are the typical years where the market has risen from 0 to 10%. This bell-shaped chart looks ‘normal’ in economic situation, but have a look at the left-side of the bell chart - yes, there goes the year 2008, at -50% S&P market index change.

A certainly lackluster year, 2008 is as bad as the worst stock market crash in the history of S&P, back in 1931.

What does it mean? Welcome to one of the worst years in stock market history! Hopefully, the 2009 will not be the worst year of the stock market history. But, even if the record breaking happened, I still believe somehow that economic recovery is right on the corner.

How well do the government react to the fact?

The US government, through the Fed, are trying to do what they think will save the US economy - record breaking funding to save banking and financial institutions, such as AIG, from collapsing.

Although not the best possible solution, as I think doing so will eventually bury US economy deeper into recession - perhaps not today, but most probably in the near future, what the Fed did is arguably give much needed friction to slow down not only the US recession, but also global recession.

Are there still hope?

Well, the 1931 crash did followed by a big rebound in 1933, where the stock market achieved a 60% return. Will this also be the case, that the crash in 2008 will be followed by similar improvement in 2010?

Although highly inaccurate, hopefully such assumption will become a reality - the sooner, the better.

As I already stated in my previous posts, I think that the negative sentiments make global economic recovery slow, as financially and psychologically distressed people will likely to react in skepticism toward any efforts to recover the global economy.

So, I conclude that all is coming back to the media - what the media preach will affect the recovery process, as people will ‘blindly’ count on the media (including on the experts), rather than their own common sense and financial knowledge, to seek ways to quit recession.

Hopefully the media (including this blog) can affect the recovery in a positive way.

Image by Alan_D.

Eventually, How You Survive the Recession Depends on Your Financial Intelligence

I once asked by my reader in my other blog - When do you think the recession will end, and how?

I really am having a hard time to answer the question. So may opinions from experts and public, as well.

To tell you the truth, I can’t imagine how the recession will end, and when will it eventually ends.

Some experts say that the recession will peak within 2 or 3 years, and things will improve gradually from there - so, rough road ahead.

Regarding how the recession will end, here’s an interesting estimate - According to this article, the average recession lasted for 10.8 months. Therefore, according to the data, on average, the recession should end last November 2008, and the longest would probably ended on April 2009.

Not exactly the case, in my opinion. Why?

Negative sentiment drive today’s recession more than before

I think that today’s recession might not be your typical recession. The emotional turmoil is as bad as the economic turmoil, in such a way that people left with unsecurity, uncertainty and negative thinking.

Even though the economy is supposedly rebounded on November 2008, the economic downturn inertia will lengthen the recession, even beyond what’s estimated as the long recession mentioned in the article above, April 2009.

As a non financial expert, but a self-made student of human behaviour, I view the recession will go well over April 2009, and will reach the peak on mid or late 2010.

I’m not sure, but neither the expert.

The best survival tool: financial education

Regarding how the recession will end, my answer would be this:

As everything in life - such as the ripple in a lake decreases when the wind speed decreases - after the panic, buzz and negative sentiment sustain themselves in people, the recession will gradually peaked and the economy will rebound - all with viral effects, as sentiment is contagious; The positive outlook of the economy will gradually, in itself, improve economy situation.

The question: How to accelerate economy sustainability?

The answer: As people start to gather themselves and start to learn from the situation, their financial intelligence increases gradually, and the new understanding will accelerate economy recovery - eventually.

The availability of money guides and money information, especially online, will help people to learn better, faster.

Nowadays, the phrase “Time is money” has never been this true before - the faster people learn, the sooner recession will end - the knowledge will set you free.

Image by emdot.

Real Estate Market Slowdown: It is Time to Self Direct Your IRA to It?

The real estate market is in a decline, with some experts say that it will reach the bottom-low valley in two or three years. Worsen by the credit crunch, the real estate market is now in a defensive position.

Right? Well, not entirely.

Some investors and businesses are thriving in the real estate market - foreclosure ‘hunters’, buy and rent back, and other opportunities.

Another way to take benefit in today’s real estate market slowdown is investing in real estate through self-directed IRA.

What is self-directed IRA?

The IRA (Individual Retirement Account), along with your 401k is often invested on the stock market, which is the reason why many people lose their retirement fund due to the stock market crash.

It is about time to be independent in managing your personal finances. Knowing and understanding the whereabouts of your money is key in protecting yourself from economic downturn, as well as allowing yourself to find better investment vehicles for your hard-earned cash.

One of the ways to enjoy the pretax savings, as well as deciding how you want to invest your retirement fund (and how much profit you want out of it) is through self-directed IRA.

According to Wikipedia.org:

A Self-Directed Individual Retirement Account is an IRA that requires the account owner to make investment decisions and investments on behalf of the retirement plan.

In essence, through a self-directed IRA, you can invest your retirement fund not only on the stock market, but also on many investment opportunities, such as real estates, franchises, partnerships, and many more.

Not all investments are allowed within a self-directed IRA account, though - for example, investments in the form of life insurance or collectibles.

Nevertheless, the self-directed IRA offers you a way to grow your fund with the most yielding investment methods.

Self-directed IRA to secure your money and give you peace of minds

Choices liberate people - Freedom (with responsibility) allow people to choose what’s right for them. Therefore, this will give them the confidence and peace of minds in living their life.

With so many scare stories about people filing for personal bankruptcy or losing their life saving these days, people need ways to control their own destiny.

A self-directed IRA can offer you just that.

One caveat, though - freedom without knowledge is fragile.

In personal finance, such freedom can liberate people to invest in the most yielding or the safest investment vehicles of their choices. The choices are highly dependent on the people’s financial knowledge and personal traits about money.

Why I recommend directing your IRA to real estate

I am not a real estate expert, but I learn from experience and from the mentors I have that to achieve great riches, or at least higher yield of your investment, you need to invest when the time is bad, such as today’s recession.

I mentioned above about foreclosures ‘hunters’ and buy and rent back opportunities - those people, often negatively reputed as vultures - because they are said to benefit from other people’s misery, are actually taking the opportunities to help people getting out of debt, as well as creating wealth out of it.

This niche market in the real estate industry is flourishing today, and I, again, recommend you to direct your IRA to real estates or real estate business.

How to open a self-directed IRA

You can set up a self-directed IRA account through companies that offer you such service, such as IRA123.com.

There are set up fee involved, but choosing the right partner can allow you set up the account fast and properly.

I recommend you to seek information on such companies, to see whether the one you want to help you set a self-directed IRA account offer more benefits than the other.

One of the benefits to look for is a company that is not only helping you set up a self-directed IRA account, but also holding real estate licenses or offering business financing to help you invest in real estates or businesses.

Do you want to secure your money and have a peace of mind? Control your retirement fund uses through a self-directed IRA account, as the real freedom is achieved if you can control your life and personal finance.

Image by respres.

US Highest Unemployment Rate Since 1994 - What Can We Do About It?

With all the euphoria and optimism due to the newly appointed US President, Barack Obama, the US economy is still haunted by nightmares.

This time - the unemployment rate.

President Barack Obama made busy early in his work at White House with the raving news about the US unemployment rate that is now 14-year high at 6.5 per cent in October 2008, surpassing the forecast of 6.3 per cent.

According to the article from Financial Times, the total of US job losses this year has now reached 1.2 million, which lead to Goldman Sachs saying that the US labour market today is in “full recession mode.”

What worsen the nightmare is the outlook - Goldman Sachs further predicted that the unemployment rate would hit 8.5 per cent next year.

What you and I can do about this news

Perhaps you are already aware that what happens to the US will affect globally - a sign that the global economic barometer is still lead by the US, not the much hyped China.

I have written about how to make a difference in today’s recession, and I will stress the importance again and again: Did you aware that the recession today is caused by you and I?

Yes - you and I, despite any personal finance issues we face, affect the people around us.

We affect our family, our family affects the community, the community affect the region, and so on, ultimately you and I affect the global economy.

Change is needed, and it better start from you and I.

I expect Money and Minds readers to be the agent of change in today’s negative sentiment about the global economy.

I am an unemployment myself - what can I do to change things?

Any situations you are in, you can make a difference.

People were talking about doing this and doing that to change the economy direction, but only a few really do change things.

I recommend that we start from our personal finance. The main idea is - if you can’t save your personal finance, you can’t contribute positive changes to the economy.

Don’t expect the government or authorities to do things for you - they have their tasks, you have yours to.

Your tasks:

1. Stop whining - if you are made redundant, get yourself a job again - never linger in depression. Or better yet, start a business. Don’t give me “I don’t have money to start a business” - you can actually start one without any amount of money required, only if you want to look for it.
2. Stop preaching bad economy to others - you are not only destroying yourself, you are destroying others, too.
3. Turn off your TV, start digging business or job opportunities - the bad news are always on TV, but good news are hidden - ready to be found.
4. Learn how to get out of debt and run your personal finance efficiently - there are resources on the Net for free - look for them!
5. Never fall to get rich quick scheme - there are none of it. Work diligently, and riches will come to you eventually.

The question - Are you resilient? Do you have all the guts to bring out all you have?

Your answer will affect the global economy. Save your personal finance, save the world.

Image by woodleywonderworks.

What You Can Do to Improve Today’s Economy

With the recent developments on global economy, especially in Asian region, I suspect that recession will peak soon - we are certainly not there, yet.

The news on Asia stock sink and the similar situation in Dow Jones, New York confirmed that we are not at the recession peak.

Again, it’s all about mindset and psychology

People are paranoid and anxious these days with the economic turbulence and uncertainty worldwide. Every single news item can shake the entire region economic stability, causing (another) breakdown in stock markets.

The money problems and the pressure of negative outlook of economy and life is mounting, leaving people stressed, uncreative and unproductive. This alone affects businesses, and eventually the stock markets.

How you and I can affect the global economy

The butterfly effect - a small action in your local area can affect the bigger community overseas, and eventually worldwide. This is how the recession started and will end someday.

The stressed you will affect your relatives, friends, and colleagues. Your relatives, friends and colleagues will affect theirs, and so on. Soon, your local community is affected, and eventually the wider community is affected.

And who do you think start the recession in your region? That’s right - You and I.

You need to learn to cope in stressful times

Colin Allen of Psychology Today wrote an interesting article about the story of a woman who step up to cope with the stressful times, due to recession and the inability to achieve what she has been planning and envisioning about.

The idea behind Colin’s article is that in tough times, like today’s massive recession, people have to learn to accept uncertainty in order to cope and marvel life challenges.

Recession will end, eventually, and will start again later on - the cycle will always present as the place we live in is not an ideal world. There will be another war, there will be another shortage and again, there will be another recession.

You and I need to move on. Otherwise, the economy won’t rebound if the community and the government didn’t do anything positive and creative to cope the recession.

Again, it is simply a butterfly effect, as a small (positive) act can affect the global community in a good way. What’s more, confidence is contagious. You can start to cope your life’s pressure, and start affecting the people around you. Soon, you will see the economy, at least your local community’s economy, will be better somehow.

Image by polandeze.

Know About Money and Finance More May Help You Beat Today’s Recession

I am a firm believer that recession is more a mind game than a fact. Of course, the impact is real, but the real battlefield is in your mind.

Outlook and mindset play a major role in how well you get through today’s recession.

Are you poor because of today’s recession?

Outlook and mindset operate just like the vague and highly relative statement, such as “I’m poor” or “I’m rich.” To the ones who make such statement, the right question to ask is “Are you satisfied of what you have right now?”

We all know that the rich-and-poor issues are focused on one thing - money. To modify the above question, “Are you satisfied of how much money you have now?”

I rarely see someone who loses his/her wealth and/or lifestyle can accept his/her condition well. Not because one doesn’t have any money, but because of the drop in lifestyle.

To make my point, consider this recent story of a recession victim in China - a billionaire lost two-thirds of her money, from approximately 8 billion dollars to 3 billion dollars due to the recent stock market crash. What do you think of this? Is she poor? no. Is she rich? yes. But she might not see the way you see the 3 billion dollars left on the table.

Indeed, many people are personally bankrupt because of the recession. But many more claim that they have gone ‘bankrupt’ and ‘poor’, which, in fact, they actually don’t - they just unsatisfied of the dropped lifestyle and net worth.

Learn more about money, survive recession better

Outlook and mindset can be influenced by the information and knowledge you acquire about finance, money and the economy.

The more you know about money and recession, the more you prepared. The more you understand them, the more you can do to face recession.

Although not all information is positive in nature, you can always benefit from others’ struggle in facing recession, and how they finally ace it.

Where to look for money information

I prefer blogs and forums to look for money information, because they are often offbeat and personalised - this will help me better personally.

What about news sites? I read the news, but only on a need-to-know basis. I prefer blogs and forums because they opinionate the news, which help me enhancing my outlook and changing my mindset.

TalkMoneyBlog.co.uk is one of the blog I stumble on searching for money info, offering blog posts, forums and resources on money. Although the forums and resources are useful, I particularly enjoy reading the blog posts.

Here’s some of my favourite posts from the blog:

• Buy to Let Landlords
• money saving tips
• Credit Cards Debts Cleared Legally

Wherever you look for money info, just make sure one thing - you can beat today’s recession by knowing more about your money. Learning will opens up new thinking, and like it or not, it will emerges opportunities to benefit from.

All is coming back to you - will you ‘capitalise’ the information and knowledge you acquire?

Internet Marketing Neurofinance

Internet marketing in make money online industry is inseparable. The following are some common question marks that every Internet marketer and website owner have in mind in considering financial decisions to adopt Internet marketing strategies and tactics.

What is Internet marketing is all about?

Basically, people making money online are trying to make more money by selling more. And selling more is possible if their websites are visited by many. And to be visited by many, the websites need to be placed better in Search Engine Result Pages (SERPs).

Why would people do Search Engine Optimization (SEO) and pay for such service?

People want to rank better in the SERPs - SEO help this becoming a reality. Learning about SEO from authority sources, such as SEOmoz.org, allows you to have better understanding about SEO and make sense the SEO service and its fees.

What $1000 SEO company fee different from those that offer $100 for the same SEO service? Money get results. Business-wise, you can calculate the investment and its return by hiring an SEO company.

I believe that $1000 has more reach and better tactics than the $100 counterparts. Whenever your budget allows, hiring the top SEO service provider, such as Chicago Search Engine Optimization, will eventually paid off.

Can you Do-It-Yourself SEO?

Yes you can. However, from my experience with this site, DIY SEO will only take you to site optimization, nothing more, as the real SEO for SERPs needs you to spend a lot of time and effort to take your site to rank better.

Here is another reason for you to hire an SEO service provider, such as Search Engine Optimization Chicago: How does submitting this article to hundreds or directories and social media sound to you? If you think it is a hard work, the I definitely suggest you to hire an SEO service provider.

Suggestions

I suggest you not to seek the cheapest SEO service offers, as everybody claiming to be the cheapest SEO service is often translated into ‘incompetent’.

Seek SEO partner that offer you value for money and excellent support - beware of those SEO companies that use illegal tactics, as they might damage your website reputation and position in SERPs.

Why US is Consumer Debt Ridden?

US is well known as one of the biggest creditors, as well as debtors in the world.

Although US helps funding other countries, especially developing countries, it own people is debt ridden.

Why such a contrast? In my opinion, culture and opportunities are the main culprit.

Taking consumer debts, especially with the ever-present of very interesting credit cards offer has been a trend, if not a culture in every American life.

Credit card, a major part of the cashless society movement, offers convenience to its holder. It’s unbelievable today if we know someone without having at least one plastic in one’s wallet.

Nothing wrong with the credit card - it’s the holder that cause the problems

Credit cards are basically useful and convenient. You don’t have to carry cash with you, bringing convenience in your daily life, as well as minimising the risk of, say, pick pocketing.

With low interest cards being offered these days, with additional perks, such as 0 APR or interest free period for a limited time, consumers are attracted to sign for one.

No matter how much information on credit cards benefit available, the debt-ridden US today is suffering simply due to the nature of human being - spend what they see, and spend even more what they don’t see.

For example, if you had a $100 in your wallet, you have the tendency to spend it recklessly when you go to the supermarket. This ‘genetic’ problem is amplified by the availability of credit cards. Suppose you were given a limit, say $500. You will always have the tendency to spend more than you should, because you don’t ’see’ the money you have in your pocket. This is amplified by the sense of ‘you-can-pay-the-bill-later’.

Credit cards can actually deliver you from debt

Here’s a good news for responsible and well informed credit card holders - you can actually clear your debt with the help of credit cards, as well as helping you raise your credit score.

Clearing debts - Using credit cards smart and cautiously will allow you to have 30-day interest free loan. The key is to pay your bills before it’s due, and pay them in full.

Raising credit score - Choose reputable credit card issuers, and use your plastics as usual. The key is never pays your bills late. Do this regularly will give you a ’shining’ report.

Choose your credit cards wisely, and they will help you in your personal finance.

Corporate Advertising Cartoon for Branding and Viral Marketing through Social Media

Corporate, most notably financial institution, are slow in incorporating new mediums and techniques to communicate their messages to their target audience.

With the premise to create a better hook in audience minds through cartoon advertising, companies are encouraged to use the new way to brand and market better.

Advertising Cartoon Creates a Hook in Audience Mind

Human minds are known to understand image better than text. The use of images to communicate and transmit ideas has been amplified by the ever presence of social media.

Social media main benefit is that it often amplifies buzz - this is achievable through the use of cartoon in adversiting.

New media advertising is typically aim to create buzz through the use of social media. One of the new media advertising ways is custom cartoons for corporate advertising purposes.

Companies, such as Vantage Internet, try to break the barrier and insist for corporate to follow the ‘trend’ of viral marketing, especially in social media.

How advertising cartoon works well to create buzz

Corporate advertising cartoon are typically smart and attract discussion among audiences.

Smart, catchy, cartoon will be bookmarked by site visitors and might end up on the first page, which means more exposure and buzz. This is what every business hope for - viral effect and leveraged branding.

Example of smart advertising cartoon is as follow:

Advertising cartoon is cost-effective

Money-wise, advertising cartoon is cost-effective. You don’t have to endorse anything and anybody but your own brand name, and you can stand above the rest in a cost-effective way.

If you are keen to have your brand name sink and hooked in your audience mind, consider the different approach advertising cartoon offers you.

How Health Insurance can Actually Give You Better Physical and Financial Well-being

According to Cencus.gov, there are 16 per cent of US resident this live without health insurance. As that will affect directly to the person without the insurance, in the long term this will affect US economy in the future.

If you one of them that have not protected by proper health insurance, consider applying for one. You need to protect your greatest asset - your health - in order to protect your and your family well-being. Even the sense of security in having an insurance is actually helping you being more healthy, as psychological issues play major role in health.

The role of health insurance in personal neurofinance

Consider this snapshot fo the article from PsychologyToday.com

How are psychology and medicine linked?

Seven of the nine major causes of death–including tobacco use, alcohol abuse and poor diet–stem from behavior. Between 50 and 70% of all visits to physicians are for problems rooted from psychology and mounting evidence proves that psychological intervention can be useful in treating a wide range of problems, from AIDS and asthma to obesity and osteoporosis.

From the article snapshot above, we can learn than most health problems related to psychology. In the other way around, health problems can affect your psychological well-being due to stressors, such as difficulty in paying medical bills and other financial strains.

It is safe to assume that all physical and financial well-being are led by and leading to psychology issues.

How health insurance can give you better physical and financial well-being

Of course, health insurance is not a medicine. However health insurance can have a placebo effect to the insured.

Taking a personal individual insurance can help you protect your financial well-being and give you the sense of security, leading to better physical and psychological well-being. The effect of those is similar to the placebo effect I mentioned earlier.

Also, having you as a health insurance sales leads, insurance agents will take a good care of you and your needs throughout your insurance account lifetime. This, in itself, will act as an added sense of being well taken care of. Just make sure that you choose the right Insurance Company and the right agent.

I recommend you to seek recommendations on health insurance providers that offer exceptional coverage and support.

Jobs to go at HBOS mortgage sector

This is a guest post.

With the mortgage drought in the UK continuing since the onset of the global credit crunch last year, it is not only consumers who are suffering. Many people that work within the mortgage industry have also suffered as a result of the turmoil in the mortgage sector, and recently HBOS has announced that there are to be job losses in its mortgage loan sector. The closure of a specialist mortgage branch by HBOS is to result in the loss of 325 jobs by the end of March next year.

The Mortgage Business, which is an arm of HBOS, will be closing to new custom later this month, and the bank will also close a mortgage processing centre. The job losses have been described as a blow by union officials, who have said that the number job losses is actually larger than the bank has cared to admit. In the first six months of the year HBOS announced that pre-tax profits fell by around 72%.

The bank said that it hoped the jobs could be cut through voluntary redundancies and turnover of staff. It added that the bank had to focus on streamlining the business. Union officials have said that the closure of the processing centre will affect jobs in Livinston, Chester, and Cardiff. One union official stated: "This is a further blow for jobs in the UK financial services sector which is being brought about by the credit crunch and the changing economic climate." 

Another union official said: "We are never happy about any reduction in roles in HBOS even if we understand the commercial logic for the changes."

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