Archives for August 2014

Many Companies Continue to Cut Benefits for Employees

There’s no doubt that the economy in the United States has improved a bit since the recession but, unfortunately, there are still many companies around the United States that are continuing to cut employee benefits. According to a survey performed by the Society for Human Resource Management, benefits including educational assistance, pensions, health insurance, long-term care insurance and so forth, are continuing to be either reduced or removed by many companies. Their survey included 510 human resource professionals from around the country, and those professionals gave some insight into the types of programs that are being cut.

One of the first is pensions and, according to the survey, less than a quarter of  employers continue to provide this traditional savings plan to their employees. At 89%, 401(k)s are available to many more employees and almost 75% of employers will contribute to these retirement accounts. Still, the fact that less than a quarter of all employers around the country are giving their employees the opportunity to have a pension is definitely something to be concerned about.

Health insurance and long-term care insurance are also being cut by many employers across the country. The fact is, ever since the cost of retiree health benefits was brought to the awareness of major companies, those companies have begun to control their exposure risk, and that means offering less of both types of insurance. Also dropping is the number of employers that will give loans to their employees to help them with emergencies or disasters. In 2010 it was 18% but it’s dropped in the last four years to 12%.

In 2010 12% of all companies were offering help to their employees to pay for college costs but, in the last four years, that’s dropped 8% to 54%. Paying for cross-training to help employees develop skills has also dropped, as well as paying things like professional memberships, referral services and company sponsored 529 plans, all of which are dropping as well.

If you’re a parent working for a large company in the United States, you probably already know that the percentage of employers offering dependent care flexible spending accounts is falling as well. On-site vaccinations, childcare referral services and other services put in place to help parents with their child rearing duties have fallen precipitously over the last few years.

As important as it is for parents to have help with their child-rearing duties, it’s also important to help care for elderly family members. The fact is however that referral services for the elderly are only being offered by 5% of employers across the country, and only 1% are offering geriatric counseling.

Other employee benefits and services like on-site health services, cash outs for vacation time, discount tickets to things like sporting events, concerts and even company sports teams have all seen major reductions over the last few years as companies big and small try to reduce their overhead, cut costs and increase profits.

All of which means that, when searching for a new company to work for, doing your due diligence to find out what they offer, and don’t, is vitally important.

The Top 2 Tips for New Stock Market Investors

If you just decided to start investing in the stock market, you‘ve hopefully done a lot of research and homework in order to make sure that you have at least a little bit of an idea about what you’re doing. That being said, the 2 Tips that we have for you today are absolutely vital for any new stock investor. Know these well, and follow them, and your chances of success will be much higher. Enjoy.

The 1st rule is to never, under any circumstances, invest money that you will need soon. If there’s one absolute fact about the stock market, it’s that it has no guarantees. An investment that might look absolutely perfect on paper might, in real life, be a complete bust. For this reason you must always consider that you could lose every dime that you put into the stock market, and take into account what this could do to you financially if it were to happen.

Although there is inherent risk when investing in stocks, there are ways to minimize major losses and one of those is to never use money that you’re going to need some time in the near future. Here’s an excellent example that will illustrate rule #1 quite well: Approximately 2 years ago Chipotle (CMG) was priced at around $400 a share but, shortly thereafter, short sellers crashed it to $250 a share. Today however Chipotle is back over $500 a share even though, throughout the entire time, they didn’t change a thing. As with many companies, their stock simply grew as it had been doing all along and is still doing today.

If you would have purchased those shares when they were at 400 and held onto them until today, your profits would be quite nice and still be growing. However, if you would’ve purchased when the shares were at $400 but then, because you needed your money, were forced to sell when they were at $250, you would have lost a huge amount of money.

The 2nd rule is to use limit orders when buying and selling your stock. You probably should already know that, when purchasing any stocks, you have either the option to buy via a “market” order or using a “limit” order. When you use a Market order the current going rate for the stock is the price you will pay. Using a Limit order lets you set your price for the highest amount of money you are willing to pay for a stock as well as the lowest price at which you will sell it.

The problem with using a Market order is that you are at risk to the impulses of the stock market, and they can be big ones. The fact is, even on a daily basis stocks can go up and down a few percentage points and, if you put in a Market order at the wrong time, there’s a possibility that you’ll get caught at the high end of the average value of a stock that you purchase. Conversely, you might end up at the low end of the variance that day when you sell.

If you use a Limit order however, you protect yourself from these market fluctuations much better. By letting you set the maximum price that you’re willing to pay for a stock, a Limit order allows you to take advantage of stock prices that are under or over the current market price, depending on whether you are purchasing or selling. This can allow you to gain valuable extra profits.

There are, to be sure, a lot of other excellent rules that you should know and follow when investing in the stock market. Make sure to come back and join us here in the future because we’re going to be bringing you those rules as well.