Viewing “Generation Now”

Chapter 7

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Redefining Luxury and Success

Along with a return to timeless values, “Generation Now” Investors are confronting and reevaluating notions of luxury and outward displays of their financial success. For some, outright material acquisition still holds appeal, but for many, they’re content to redirect or delay what would have been spent on material items for experiences for themselves and family. Today’s luxuries are more likely to be things like once in a lifetime trips to far flung corners of the globe than flashy cars, or memberships in exclusive country clubs.

In fact, I would probably sell where I live now, in San Francisco, maybe purchase something small, so I have a home base. But I would love to travel to Central America, maybe do some hiking in South America. I would like to visit some countries in Asia: Vietnam, Cambodia, revisit Thailand.

This is the seventh of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

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GE Earnings

Many of our clients are either GE employees, GE retirees or have some other relation to GE.  For that reason – and because GE is one of the big old companies that define the bedrock of American industry – we would like to share the GE earnings announcement.  The comments are taken from “Seeking Alpha.”

On October 17, General Electric (NYSE:GE) reported third quarter operating earnings of $0.38/share, up $0.02 or 6% from the prior year, beating consensus estimates by $0.01/share. Revenues increased 1% to $36.2 billion, with non-GE Capital revenues up 3%. Industrial profits increased 9%, to $4.3 billion in the quarter with margins increasing by 90 basis points. Backlog of equipment and services also grew 9%, to $250 billion. The Company confirmed the Synchrony Financial (NYSE:SYF) split-off would be completed in late 2015. The sale of the Appliance division to Electrolux is expected to generate an after-tax gain of $0.05-$0.07 per share. GE disclosed the Alstom acquisition, targeted to close in 2015, is expected add $0.06-$0.09 per share to earnings in 2016, potentially adding about 3% to current 2016 forecasts (consensus of $1.91/share). The Company also reiterated its goal of having 75% of its earnings from industrial businesses by 2016.

This article only reflects the author’s opinion. It is not designed, and should not be used as the basis of an investor’s buy or sell decision. Investors should always conduct their own due diligence and make their own buy and sell decisions.

To read a sample of our book BEFORE I GO, please visit our website.

 

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Viewing “Generation Now”

Chapter 6

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Return to timeless values:

Many “Generation Now” Investors, who previously placed greater emphasis on wealth and status, and found these aspects of their self-identity easily compromised by financial swings beyond their control, have been forced to reevaluate their priorities.

They’re focusing on creating meaningful experiences with family and friends – that typically don’t carry a high price tag – and drawing inspiration from their own parents, childhood and upbringing to find their way forward.

“Generation Now” may not yearn for the world of Ozzie and Harriett, but they long for many of the values of community that their parents and grandparents had. Some are downsizing from larger homes to smaller ones. Instead of meeting friends for dinner in expensive restaurants, they may prefer to get together at home for a dinner party.

A big life decision that my family and I made recently was to downsize a bit. We moved to west palm beach. And we did so from plantation to a three bedroom house from a five bedroom house, which was a pretty big decision for us. And we did that more or less so we could save more money, I should say, a lot more money. We needed to do that so we could get back in touch with what the more important things in life are right now. And that is family and saving for our future.

This is the sixth of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

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Market Commentary October 16, 2004

The Wall Street Journal called yesterday’s stock market action a “fear-fueled frenzy” which is a pretty fair assessment. And it’s in this kind of market in which future fortunes can be made.
Fear causes people to act irrationally. In the words of the poet Rudyard Kipling in his poem titled:

“If”
If you can keep your head when all about you
Are losing theirs and blaming it on you,
….
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!

Wild swings in the market are almost always caused by panic. Often by people who have made big bets such as hedge funds and other short term players bailing out of money losing trades. This has the effect of making the mom-and-pop investors who are in it for the long term nervous. That’s where keeping your head while others are losing theirs pays off.

Over the longer term markets follow earnings. Consensus estimates for the S&P 500 are expected to rise 11% in 2015. These estimates are subject to change but they indicate a trend that favors the investors who stay the course.

We are in the midst of “earnings season” and here is a representative sampling of companies who reported today:
Goldman Sachs beat estimates by $1.36 per share.
Baxter beat by 5¢
Baker Hughes missed by 12¢
BlackStone missed by 6¢¢
Delta Air beat by 2¢
Fairchild Semiconductor beat by 7¢
Fifth Third Bancorp missed by 4¢
Procter & Gamble beat by 7¢
Briggs & Stratton beat by 17¢

We are not recommending the purchase or sale of these stocks, simply noting that six out of nine major companies are actually reporting better earnings than analysts expected. When will the current panic pass? We don’t pretend to tell you. But we are confident if we do our job and create well diversified portfolios we’ll do well over time.

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Viewing “Generation Now”

Chapter 5

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Uncertain Horizons

With all this uncertainty, “Generation Now” are split and confused about how they should approach investing today, and unclear how much risk they should be exposed to: Should they take a more conservative approach in the short -term until it’s clearer the economy has fully recovered?

Or, should they play a more aggressive hand that’s more in line with their age and life stage?

I have some conservative accounts and the interest is almost non-existent, so that’s harmful for future savings. And uncertain housing markets and equity markets… that makes it difficult to plan for the future. And that makes it difficult to buy stocks and mutual funds for the future when you don’t know what the market is going to do and difficult to buy a home if you don’t know if there’s giving to be another housing crash. So those things make it difficult to plan for the future.

This is the fifth of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

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What happens to an on-line account when you die?

That’s a question few people ever consider.   But it’s one that is increasingly important.

On-line services like electronic bill-pay, shopping and social media are just too new.  I would want my spouse to be able to continue to pay bills electronically.  I would have no problem if someone wanted to look at my e-mail, Facebook or Twitter accounts.  But a recent Associated Press article pointed out that most companies “terms of service” agreements (those things that no one ever reads before clicking on the “I agree button”) prohibit anyone from accessing an account that isn’t theirs.

In fact, parents have been blocked from accessing their children’s Yahoo and Facebook accounts after their children’s unexpected deaths.

There may even be a great deal of value in on-line accounts.  Who ends up owning a picture collection, music files stored on-line or the digital files of a celebrity?  It’s a question that courts and legislators are beginning to address.

In the meantime, provide the people you trust with access to the accounts you want them to see in case of your death.  And don’t put things like account numbers and passwords in your will.  Wills are public records.

For more information about the records you should leave behind, click on the link for BEFORE I GO, and send for a copy of the workbook.

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Viewing “Generation Now”

Chapter 4

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Shaken Belief in Long-Term

Conventional investment wisdom has long held that a well – balanced approach, over a period of many years, will yield some degree of predictable gains. For “Generation Now” Investors, the power of the long-term has been called into question and placed increased emphasis on short – term financial / investment considerations and gains. Their parents believed that their children would be better off. “Generation Now” has begun to question if the future will be better than today.

I tend to believe the government good will that says you guys need to put money in to the financial market, the mutual fund that 529 provides to you and for 10 or 20 years make sure you have enough money to pay for your child’s education, but what is the outcome? I not only lose money, but even with the remaining money, I have to tell the government this is the money I’m going to use just for education only.

 And …

Yeah, there is anxiety about real estate values, whether the home will appreciate so on and so forth. Whether we’ll have enough to provide for the children’s education. Things like that. But overall currently, I think we’re in a great spot. We have high paying jobs. We’re able to handle most of our financial needs. Long term, these are our basic concerns about kid’s education.”

This is the fourth of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

 

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Viewing “Generation Now”

Chapter 3

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Preparing for the unknown

Many of this generation want to protect themselves and their families against the next economic downturn. For “Generation Now” Investors, these fear-based motivations are often more motivating and top–of-mind than idealized, optimistic visions of retirement and financial goals.

For shorter term, I guess my criteria are having money easily accessible and having little to no risk, because I kind of treat that as an emergency fund, like if something catastrophic were to happen, or if I were to lose my job or have a big injury or something, that I could get to that money

This is the third of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

 

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Viewing “Generation Now”

Chapter 2

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Fresh memories of collapse
They have experienced two financial crises: the “Tech Bubble” collapse of 2000 and the real estate fueled “Great Recession” of 2008. These memories are fresh. The anemic recovery since then makes them feel vulnerable. Their belief that the long term will work out for them is shaken.

The economy has been pretty brutal. I’ve managed to keep my job, and my wife has managed to also keep her job, but we also have a family company that’s been in business for 50 years that actually ended 1.5 years ago. That was rather traumatic and difficult financially for a lot of people in my family. It’s something we took pride in, and that was hard.

This is the second of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

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Viewing “Generation Now”

Chapter 1

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Pervasive Insecurity

It just seems that everything is a lot more shaky these days. I feel like a crash or something coming in the markets. Yeah it’s kind of stressful

This generation’s life experience is different from their parents, and it makes them feel insecure. The economy, 9/11, foreign wars and political tension at home has had a significant effect.

There’s always that lingering threat that you never know what’s going to happen. The economy can turn south at any point in time.

They probably have no pension where they work. If they have children they face daunting college costs. If they have cash, they are hoarding it, like a safety blanket; against the rainy day that they are certain will come again.

For shorter term, I guess my criteria are having money easily accessible and having little to no risk, because I kind of treat that as an emergency fund, like if something catastrophic were to happen, or if I were to lose my job or have a big injury or something, that I could get to that money.

This is the first of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

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