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DailyFinance.com http://www.dailyfinance.com DailyFinance.com http://o.aolcdn.com/os/df/2013/img/2-dailyfinance_logo_m.png DailyFinance.com http://www.dailyfinance.com en-us Copyright 2015 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[Move to This State and Improve Your Financial Health]]>http://www.DailyFinance.com/2015/07/29/states-best-health-personal-finance/http://www.dailyfinance.com/2015/07/29/states-best-health-personal-finance/http://www.dailyfinance.com/2015/07/29/states-best-health-personal-finance/#commentsFiled under: , , , ,

Bismarck, North Dakota
Bill on Capitol Hill/Flickr
If you're looking to improve the health of your finances, try moving to North Dakota. Or at least avoid Georgia.

Three North Dakota cities made it into the top five slots in NerdWallet's rankings of cities based on the financial health of residents, which was released today.

By contrast, three Georgia cities were ranked in the bottom five out of 265 cities analyzed.

Based on data from credit bureau Experian and the U.S. Census Bureau, NerdWallet's rankings reflect residents':
  • Debt (as measured by average consumer debt as a percentage of per capita income; average credit card debt; and percentage of homes with a second mortgage, home equity loan or both) -- 50 percent of the score
  • Financial management (average number of credit cards; average credit score) -- 30 percent
  • Spending (percentage of household income spent on housing and related costs by homeowners) -- 20 percent
Midwestern cities in general fared well, "likely due to strong economies paired with lower costs of living," NerdWallet reports.

The relatively low rankings of Southern cities -- they comprise a large percentage of the bottom 20 -- is perhaps less easily explained. Rod Griffin, Experian's director of public education, tells NerdWallet:

"Unfortunately Southern cities tend to have lower [credit] scores than Northern cities, particularly the Midwest."

The 10 cities whose residents' finances are in the best shape are:
  • Dickinson, North Dakota
  • Bismarck, North Dakota
  • Sioux City, Iowa
  • Minot, North Dakota
  • Moline, Illinois
  • Helena, Montana
  • Appleton, Wisconsin
  • Bloomington, Illinois
  • Rochester, Minnesota
  • Richland, Washington
Residents' finances are in the worst shape in:
  • Columbia, South Carolina
  • Fresno, California
  • Greenville, North Carolina
  • Tallahassee, Florida
  • Norfolk, Virginia
  • Macon, Georgia
  • Savannah, Georgia
  • San Bernardino, California
  • Albany, Georgia
  • Riverside, California
The average American carries more than $26,000 in nonmortgage debt, including about $3,800 in credit card debt, according to Experian.

If you are struggling with debt, including credit card debt, or need help with a mortgage, be sure to visit the Money Talks News Solutions Center.

Are you surprised by these findings? Let us know what you think below or on Facebook.

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credit cardscredit scoredebteconomyfinancial literacyhousing marketmortgagesnorth dakotareal estateMoney Talks News2015-07-29T05:00:00+00:00
<![CDATA[Downsizing? Don't Forget to Budget for These Costs]]>http://www.DailyFinance.com/2015/07/29/-downsizing-household-costs-budgeting/http://www.dailyfinance.com/2015/07/29/-downsizing-household-costs-budgeting/http://www.dailyfinance.com/2015/07/29/-downsizing-household-costs-budgeting/#commentsFiled under: , , , ,

Middle-aged couple unpacking boxes.
Getty Images
By Susan Johnston

It's a common bit of retirement advice: Downsize your housing after the kids leave the nest to cut costs. Interestingly, though, many baby boomers have no intentions of downsizing. Nearly two-thirds of boomers surveyed in 2013 by The Demand Institute -- a nonprofit owned by Nielsen -- plan to "age in place" rather than move, and of those who do plan to move, nearly half said they plan to increase the size of their home or pay more for a comparably sized home.

Many people assume that downsizing housing saves money. But does it really?

It can, especially if you're able to cash in on the equity you've built up. But there are a lot of factors that can actually result in higher housing costs once you downsize. "What we always recommend is to consult with a financial planner to see what your monthly expenses are now and what the expenses may be where you're thinking of moving," says Jeff Stone, a seniors real estate specialist in a Port Washington, New York.

Stone points out that the term downsizing can be, well, a bit of downer. "Rightsizing, to me, is a better word," he says.

Here's a look at several areas to consider before moving later in life.

Moving costs. When you move for a job, you might get a relocation package from your employer or load the moving truck with help from a couple of able-bodied friends. But when you move during retirement, you bare those costs, which can be considerable if you're moving a long distance and need to hire professional movers. "Sometimes with the cost of moving furniture, especially if you're going a longer distance, it can be more feasible to buy new furniture," says Mario Minotti, a partner at Minotti Group Wealth Advisors in Chicago. (Minotti's clients are mainly retirees and pre-retirees, so he's talked through the pros and cons of downsizing with several of them.)

Beyond the cost of physically transporting your belongings, you'll also pay transaction costs on selling an existing home and buying a new one. " If [a home is] listed with a broker, you pay their commission and will also be paying your attorney fees, closing costs and so forth," Stone says. Many boomers also choose to rent, which comes with a different set of costs.

Storage costs. Many boomers have amassed -- and grown attached to -- large collections of antiques and other mementos over the course of their lives. "There's china sets, a lot of antiques and family things that they want to preserve," Minotti says. "A lot of male clients have accumulated a couple of cars, and they're excited that they're going to be able to enjoy them [in retirement], but parking spots can be expensive." Or, in some cases, "their kids had a bunch of their childhood stuff that they want to preserve for their grandkids," he adds.

One option, if you don't have space for these items, is renting a storage unit. But it doesn't come cheap, especially if you want secure, climate-controlled storage for antiques. The average asking rent for a 10 by 10-foot climate-controlled storage unit in the U.S. was $151 a month during the fourth quarter last year, according to the Self Storage Association.

Another option is to sell, donate or give to relatives. Unless you have items that are in demand, don't count on making big bucks or getting younger relatives excited about decades-old furniture (a notable exception being college-bound or recently graduated grandchildren furnishing a place on a budget). An item may provide "a memory but doesn't provide value to someone else," says Chris Abts, president and founder of Cornerstone Retirement Group in Reno, Nevada. "We find many times those just don't have much in the way of value." Many boomers also lack the energy or discipline for a serious declutter, which has spawned an entire of industry of senior move managers and organizers for hire. "The key would be to downsize the things you've accumulated while you have energy, while you're healthy," Abts says.

New furniture. If you're moving across the country, you might choose to buy new furniture rather than pay to move existing furniture. Or you might realize the sectional from your super-sized living room now takes up too much space, especially if you need to maneuver a walker or wheelchair around it in the future. "[My clients] find that a lot of their furniture doesn't even fit," Abts says, "and [they have to buy] a smaller kitchen table."

Property taxes. Even if you've built up enough equity to buy a new place with cash, you'll still have to pay property taxes, which could be higher in your new location, even for less space. "You're probably moving from an old home to some newer community," Abts says. "Usually your taxes are going to be higher." Fortunately, some areas offer property tax relief to seniors who qualify, so this is an area to investigate.

Condo fees. If you're moving from a free-standing home to a condo, don't forget to factor in condo or association dues. Many senior communities have higher monthly dues or fees to reflect the amenities they offer such as a clubhouse, golf course and pool. "They're striving for [things to be] convenient, but with that convenience usually adds condo association fees," Minotti says. However, it still might make financial sense if you plan to use these amenities, and it means you can cut back on other entertainment costs such as a separate golf or pool membership.

Travel costs. If you're moving away from family, consider what this means for your travel budget. "Is everyone going to come down and visit?" Abts asks. "Do I need to budget for coming back to visit the grandchildren?" And if the kids and grandkids do visit, will you have a guest bedroom where they can stay? Or will they need to stay in a hotel? Minotti says this came up with a client recently who promised to pay hotel expenses for the grandkids and kids, so they could visit.

Money is, of course, a concern as people age, but health and safety are also important considerations. Donna Quinn, who works with Stone as a seniors real estate specialist in a Nassau County, New York, points out that some boomers choose to move into a community they feel is more social and supportive as they age. "A safer environment where there's people around," she says, can outweigh any additional financial costs.

Often, downsizing is prompted by a life event such as an injury or the loss of a spouse that requires a fast, usually stressful transition. To avoid this, Abts encourages people to consider their options well in advance. "Do your research before that life event happens," he says. "Go find those places and determine is that where you really want to go. Most people think they're going to spend less, but most people find that they spend the same or actually more than they had anticipated."

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agingbaby boomersbudgetbuying a housedownsizingempty nesthome buyinghousing marketmortgagesmovingreal estaterenting an apartmentretirementseniorsU.S. News2015-07-29T05:00:00+00:00
<![CDATA[Life Without a Wallet: Getting By Without Cash, Credit Cards]]>http://www.DailyFinance.com/2015/07/29/paying-without-cash-credit-cards-wallet/http://www.dailyfinance.com/2015/07/29/paying-without-cash-credit-cards-wallet/http://www.dailyfinance.com/2015/07/29/paying-without-cash-credit-cards-wallet/#commentsFiled under: , , , ,

MasterCard Launches NYC Tech Hub, Showcases Payment Innovations
Charles Sykes/Invision for MasterCard via AP
Life without a wallet is starting to be a very real possibility in the U.S., and the ability to make mobile payments on your phone and even smartwatch is a big reason. Apple's (AAPL) introduction of Apple Pay last year added to Google's (GOOG) (GOOGL) Wallet -- which will soon become Android Pay -- and these services may soon replace credit cards as we know them.

Merchants and credit card processors are rushing to add the products needed for them to accept mobile payments, and the rate of innovation is incredible. Let's look at the benefits and pitfalls of life without a wallet.

What You Need to Go Mobile

It's surprisingly easy to start using mobile payments, and many people don't even know that payment options are available on devices they already have. Apple Pay and the upcoming Android Pay will allow you to save credit card information with just a few taps of a button if you have a participating card. Since over 95 percent of the smartphone market runs on either Apple's iOS or Google's Android, it's likely this is an option for you.

From there, it's a matter of using your smartphone or connected smartwatch to pay at checkout. Tens of thousands of merchants are already accepting such forms of payment.

Innovation in Mobile Payments

In the past few months alone we've seen some big advances that allow mobile payments to play a bigger role in our lives. Mobile payments are now accepted at such common locations as McDonalds (MCD), Nike (NKE), Subway and Walgreens (WBA). Retailers adding mobile payments isn't all that much of a technological shift, since many point-of-sale devices take contactless credit cards, but it's the advances outside of retailers that have made going without a wallet truly possible.

Restaurants and bars have always been a big hurdle for mobile payments because tips were hard to add on a traditional point-of-sale device, and even mobile readers weren't all that mobile themselves. But that's changing. Mobile-payment company Square has made a reader that's mobile and software that allows tips to be added as well; that could push other companies to respond and lead to a flood of mobile payment options for restaurants and bars.

If more options like this are introduced from companies like PayPal (PYPL) or Intuit (INTU), the mobile payment revolution could flourish. Until it does, going without a wallet is possible sometimes, but other times it can be risky.

The Downside of Going Mobile

The most difficult thing about going without a wallet today is that it's not clear which merchants accept mobile forms of payment and which don't. There isn't yet a widespread display that says "We accept Apple Pay and Android Pay" like there is with the Visa (V), Mastercard (MA), Discover (DFS) and American Express (AXP) logos found near the entrance of many merchants. So, until you try to pay with a mobile payment system, it's tough to know whether it will be accepted.

Consumers going without a wallet also run the risk of their mobile device running out of battery. If your smartphone goes down, you could be sunk. A backup charger may be needed if you choose to go without a wallet full time.

Wallet-less Life Is Here, but Not Full Time

I've been living without a wallet occasionally for a few months now, and if I know that where I'm going will accept mobile payments, it's not a problem. But going outside of your normal purchasing patterns brings up the risk of shopping somewhere that isn't mobile-friendly, and that alone is enough reason to bring a wallet.

In the long term, I think nearly every payment processor will accept mobile options like Apple Pay or Android Pay; it'll just take time. It'll be like the transition from checks to credit cards, but much, much faster. In a year or two, life without a wallet will be a very real possibility. For now, it's a part-time reality that has a very bright future.

Motley Fool contributor Travis Hoium owns shares of Apple, MasterCard, McDonald's, PayPal Holdings and Visa. The Motley Fool recommends American Express, Apple, Google (A and C shares), Intuit, MasterCard, Nike, PayPal Holdings and Visa. The Motley Fool owns shares of Apple, Google (A and C shares), Intuit, MasterCard, PayPal Holdings and Visa. 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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appleapple paycashcredit cardsgooglegoogle walletinvestingmobile paymentsmobile technologystockswall streetwearableTravis Hoium2015-07-29T05:00:00+00:00
<![CDATA[How to Make the Most of Your Amazon Prime Membership]]>http://www.DailyFinance.com/2015/07/29/how-to-make-most-amazon-prime-membership/http://www.dailyfinance.com/2015/07/29/how-to-make-most-amazon-prime-membership/http://www.dailyfinance.com/2015/07/29/how-to-make-most-amazon-prime-membership/#commentsFiled under: , , , ,

The Amazon website promotes their self-proclaimed
It was Christmas in July for Amazon.com (AMZN) earlier this month. The leading online retailer celebrated Amazon Prime Day, offering deals to website visitors all day long. It was a hit. More items were ordered during the one-day promotion than during last holiday season's potent Black Friday holiday.

The summer sale drew attention to Prime, Amazon's loyalty shopping club where consumers pay $99 a year for unlimited two-day shipping of goods warehoused at one of its distribution centers. With "tens of millions" of subscribers -- Amazon won't offer a more specific tally than that -- there's a good chance that you or someone you know is a member.

There's more to Amazon Prime than free shipping, though. Let's take a look into some of the digital perks that members may be missing out on, possibly saving you money on services that you're paying for now.

There's Always Something on TV

Prime Instant Video was the original online goodie for Amazon Prime shoppers, giving folks streaming access to what was initially a modest vault of old TV shows and obscure movies. Amazon has made some big investments since the platform's launch in early 2011.

It has followed niche leader Netflix (NFLX) into original programming with the Emmy-worthy "Transparent" and more recently "Catastrophe." It also offers some pretty compelling content that isn't available on Netflix, including "Downton Abbey" and several older HBO shows. Its catalog will never be as broad as Netflix's, but when you consider that folks are paying nearly as much for a year of Netflix as they are for a year of Prime, it's a pretty sweet benefit to folks who think that Prime is only about speedy order fulfillment.

Crank Up Some Tunes

Just as Prime Instant Video can save money for some customers of Netflix, Hulu Plus, and possibly even cable television providers, Prime Music does the same to upend Spotify's and Pandora's (P) models.

Prime Music offers streaming access to more than a million tracks that can be played on demand (like Spotify), but it also offers personalized stations like Pandora. Yes, Pandora is free, but Amazon's option is ad-free, something that Pandora users would have to pay $4.99 a month to get.

To be fair, the Prime Music library is a lot smaller than that of the leading music services. It's sorely lacking when it comes to the latest releases. However, with a million songs to choose from, you probably won't have a problem finding something you'll like.

Read All About It

Amazon's most successful product has been the Kindle e-reader, and it's fitting, since the Web-based retailer got its start by selling hardcover and paperback books. Selling the industry's top e-reader has naturally made Amazon a thriving e-book distributor.

Prime users can get in on the fun through the Kindle Owners' Lending Library. Once a month, a Prime member can borrow one of the more than 800,000 e-books that are available under the program. They need to be read on Kindle devices, but it's a fair bet that Amazon Prime shoppers who love to read already own one.

It's a Pretty Picture

The most recent addition to the Prime catalog is unlimited online storage of photos. Amazon Cloud Drive offers online storage and automatic photo backup, with photos viewable on the Internet or through a mobile app for smartphones and tablets.

The benefit doesn't include video clips, since naturally those chunky media files can take up a lot of space. Amazon Prime is generous, but not that generous. However, for those with a growing collection of digital snapshots, it's just the latest neat perk available to the e-tailer's most loyal customers at no additional cost.

Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Netflix and Pandora Media. 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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<![CDATA[Before Even Thinking About Retiring, Retire Your Debts]]>http://www.DailyFinance.com/2015/07/29/retire-your-debts-before-you-retire/http://www.dailyfinance.com/2015/07/29/retire-your-debts-before-you-retire/http://www.dailyfinance.com/2015/07/29/retire-your-debts-before-you-retire/#commentsFiled under: , , ,

Senior Woman Paying Bills
Getty Images
By Nicholas Pell

NEW YORK -- As you close in on your retirement, consumer debt can really cramp your style.

"You're going to have a lot less stress and a lot more stability if you can retire your debt before you retire," said Gerri Detwiler, director of consumer education at Credit.com.

If you're unable to nip debt in the bud during your working years, you might spend years after retirement paying down your debts. Even worse, you might have to push retirement back so that you can pay off your outstanding debt.

But if you have some time left before you retire, you don't have to contemplate such doomsday scenarios. Instead, you just need to begin aggressively attacking your consumer debt. Here's how.

The Benefits of Paying Down Retirement Debt

Detweiler notes that there are two main benefits to paying down your retirement debt now. "It will give you more money in your budget, but it also gives you a sense of what you can really live off of," she says.

Paying off debt before retirement is the most prudent thing to do.

She points out that in retirement, your income is likely to drop. So getting used to living on less at this point in your life is a good exercise for when the day comes that you actually retire. "It will be less of an adjustment," she says.

"Paying off debt before retirement is the most prudent thing to do," says Ellie Kay, a family financial expert. "It leads to a higher quality of life, because you don't have the extra burden of consumer debt."

To underscore the importance of getting rid of your debt load before your golden years, it's essential to take stock of how much money you will need in retirement.

"The rule of thumb is that you need 70 percent of your income when you retire," says Detweiler. "But if you can live on less, you have more options. It doesn't necessarily have to be 70 percent of what you're earning today. If you can live on less than that, you have a lot more options in terms of when you can retire and how you can spend your money." So a happy accident of paying down your debt before retirement is that you end up retiring sooner than you think.

Should You Use Retirement Funds to Pay Off Debt?

Tapping your retirement funds to get rid of debt may not be the hottest idea out there. That's because if you're not yet 59.5 years old, withdrawals from your 401(k) account will get dinged at a 10 percent tax penalty. To boot, taking withdrawals from your 401(k) decreases the total pot and stunts the ability for the funds to grow with compound interest.

That said, if you can cut down on that crippling high-interest credit card debt, it may be worth your while to employ some of your retirement funds toward eliminating your debt.

"If you're really flush with retirement money and you can use it, that's fine," says Detweiler. "But most people who are looking at retirement with debt will want to preserve those savings for later."

Instead, she suggests that you begin your quest by meeting with a credit counselor. "Let's say you want to retire in three years and have a lot of debt, between $30,000 and $60,000," she says. "Just because you can't come up with a plan to become debt free doesn't mean they can't." She says that many people who are afraid they'll never be able to retire come up with workable plans after meeting with nonprofit credit counselors.

If you are still employed, one option, not without risk, is to take a loan from your employer-sponsored retirement plan. You can set up a repayment plan for three years or less without owing interest. The downside, of course, is that you won't be earning growth on that money in your 401(k) plan. Also, you will want to weigh how secure your position is: if you lose your job or leave the company voluntarily, you will have to repay your retirement plan loan quickly, sometimes within 90 days.

Kay suggests that one way to start working on retiring debt today is to have a family meeting and decide on a strategy. "Decide how you're going to pay it off, but be smart about it," she says. One proven method of retiring debt Kay recommends is the snowball method, where you pay off the card with the highest interest rate. Once you've handled that, roll the payment you'd previously allocated to the highest interest credit card over to the next card, then both payments to the third and so on. "You have more money available to attack your debt," she says.

Another method Kay recommends is paying forward any money you start saving in other areas. For example, she advises that people look at their insurance policies annually. Lower rates are generally available on an annual basis. If your insurer isn't offering them, shop around for one that will. If you save $300 a year on your car insurance, you can take that money and put it to work attacking your consumer debt.

You might also want to consider downsizing your life before retirement. "Selling your home and using equity to pay off debt and buy something cheaper can allow you to get into a lower-cost housing situation and retire some debt," she says. This, in turn, will give you the kind of financial flexibility that you're looking for when you think about retiring your debts.

Finally, Kay recommends that you attack your consumer debt in a strategic way that improves your credit score. That means lowering the balance on your most used cards for a bump in your FICO score. And while you might be tempted to put the balance onto a card with a low introductory rate, Kay cautions against that. "The problem is that you're going to take a hit on your credit, because every new card shortens your average credit history," she says. "It's a way to slowly but significantly deteriorate your FICO score if you keep rolling balances over.

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<![CDATA[More Money-Saving Moving Tips -- Savings Experiment]]>http://www.DailyFinance.com/2015/07/28/money-saving-moving-tips-savings-experiment/http://www.dailyfinance.com/2015/07/28/money-saving-moving-tips-savings-experiment/http://www.dailyfinance.com/2015/07/28/money-saving-moving-tips-savings-experiment/#commentsFiled under:

More Money-Saving Moving Tips
Moving can be a stressful experience, so before you get packing, here are a few ways to make it easier on both you and your wallet.

First, when packing up your kitchen, use styrofoam plates in between your real plates as padding. It's a cheap, easy way to keep them from breaking during your move. When it comes to your glasses, an old wine box is a perfect way to keep them organized. Just snag some boxes from your local bar or liquor store, stuff some newspaper in each compartment for protection, and your glasses will be good to go.

Another thing to remember is that a little bit of cling wrap can go a long way. You can use it to keep your jewelry from getting tangled, to cover the openings of your toiletries so they don't leak, and even to stop dresser drawers from sliding open while they're on the moving truck. The cling wrap will also help pad the dresser, and keep it from getting scratched during your move.

Next, if you're a renter, don't wait until the day of the move to clean your place. If the owner has to bring in a cleaning crew to go over the stuff you skipped, chances are it'll come out of your security deposit. Clean ahead of time so you can hold onto your money.

Finally, always pack an overnight bag or box with everything you'll need for the first night in your new place. After a long day of moving, the last thing you'll want to do is go through a bunch of boxes, just to find your pajamas or hairdryer. Keep all the basics on hand, and save yourself from unnecessary stress.

So, if you're about to move, remember these tips to make it easier on yourself. You'll see that by packing with a plan, you'll save yourself time, money and stress on moving day.

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life hacksmoversmovingpackingsavings experimentSavings Experiment Staff2015-07-28T17:45:00+00:00
<![CDATA[Report: Health Care Spending to Accelerate]]>http://www.DailyFinance.com/2015/07/28/health-care-spending-accelerating/http://www.dailyfinance.com/2015/07/28/health-care-spending-accelerating/http://www.dailyfinance.com/2015/07/28/health-care-spending-accelerating/#commentsFiled under: , , , ,

Health Spending
Carolyn Kaster/APHealth-policy expert Douglas Holtz-Eakin speaks on Capitol Hill in 2010. Holtz-Eakin said a report forecasting accelerated growth in health spending was "not great news."

WASHINGTON -- The nation's respite from accelerating health care costs appears to be over.

Spending on health care will outpace the nation's overall economic growth over the next decade, the government forecast Tuesday, underscoring a coming challenge for the next president, not to mention taxpayers, businesses and individual Americans.

A combination of expanded insurance coverage under President Barack Obama's law, an aging population, and rising demand, will be squeezing society's ability to pay.

By 2019, midway through the next president's term, health care spending will be increasing at roughly 6 percent a year, compared to an average annual rise of 4 percent from 2008 through 2013.

The higher rate of increase is still "relatively modest," says the report from the Office of the Actuary in the Health and Human Services Department. The forecast, through 2024, doesn't foresee a return to pre-recession days of torrid health care inflation, as the government and private employers try to revamp the way they pay hospitals and doctors to emphasize quality over quantity.

The main point is that the bill will continue to grow faster than the economy, which is what pays the bill.

Even so, the report is "not great news," said economist Douglas Holtz-Eakin, president of the American Action Forum, a center-right think tank.

"The main point is that the bill will continue to grow faster than the economy, which is what pays the bill," he added. "The next president faces the task of reining in the growth of federal entitlement spending."

"I do think this becomes something of a liability for anybody coming into office, and they need to have a very proactive policy to address it," said Dan Mendelson, CEO of Avalere Health, a market analysis and consulting firm. Mendelson served in the Clinton White House as a health policy expert.

Health care as a share of the nation's overall economy is projected to grow from 17.4 percent in 2013 to 19.6 percent in 2024, the report says, accounting for nearly $1 of every $5 spent.

Growth in the nation's health care tab slowed dramatically during the 2007-2009 economic recession.

Then came several years when health care increases tracked closely with the economy as it started to stir again.

As taxpayers, Americans benefited from the slowdown, which reduced projected Medicare costs. But many people saw their own medical bills rise, as employers shifted costs to workers.

More Americans Gain Coverage

Things changed in 2014, the report says, with coverage expansion under the new health care law. Some 8.4 million gained coverage that year, and people with health insurance use more medical services and prescriptions than do the uninsured.

At the same time, expensive new drugs that can cure hepatitis C are boosting spending on medications. In 2013, prescription drug spending rose by 2.5 percent. For 2014, the projected increase is 12.6 percent, according to the report. Hepatitis C is a viral infection that gradually destroys the liver, afflicting about 3 million Americans.

Spending on Medicaid, the federal-state health insurance program for low-income people, also has jumped. The 2013 increase was 6.1 percent. But the program is projected to have grown by 12 percent in 2014, again boosted by coverage expansion under the health care law.

Expanded Medicaid is one of two paths for covering the uninsured under Obama's law. The other is subsidized private insurance. Spending on private insurance is projected to have grown by 6.1 percent last year, more than double the rate in 2013.

The effects of expanded coverage won't be as dramatic in the years ahead, the report says. Likewise, the spike in drug costs will work its way through the system as government programs and insurers demand rebates from the manufacturers of hepatitis C drugs.

Aging Population

But the other big factors pushing spending higher may harder to deal with. An aging population means older and sicker Medicare beneficiaries who will need more services, and more intense medical attention. Also, economic recovery creates demands for higher pay, and hospitals and doctors' offices are labor-intensive enterprises.

Government will become a more dominant player as the federal, state and local government share of health care rises to 47 percent in 2024, from 43 percent in 2013.

There's no hard-and-fast rule about how much a society should spend on health care. But there's widespread agreement that the United States wastes too much. Other competing priorities such as education and infrastructure can get short- changed.

Medicare, which turns 50 this week, is in the midst of its own quiet overhaul. Increasing numbers of beneficiaries are joining private insurance plans offered through the program. And the Obama administration is trying to revamp the way it pays hospitals and doctors to reward quality results over volume of services. Still, it can take years to develop new payment standards and demonstrate their effectiveness.

"If there's a political implication of this, it's to find those areas where there are proven or likely cost savings, and aggressively go after them through Medicare," Mendelson said.

The health care spending report was published online by the journal Health Affairs.

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agingeconomyfamilygdphealth carehealth insurancehospitalinflationmedicarepersonal financeThe Associated Press2015-07-28T16:58:00+00:00
<![CDATA[Market Wrap: Stocks End Sharply Higher as China Jitters Ebb]]>http://www.DailyFinance.com/2015/07/28/market-wrap-stocks-end-sharply-higher-china-jitters-ebb/http://www.dailyfinance.com/2015/07/28/market-wrap-stocks-end-sharply-higher-china-jitters-ebb/http://www.dailyfinance.com/2015/07/28/market-wrap-stocks-end-sharply-higher-china-jitters-ebb/#commentsFiled under: , , ,

Financial Markets Wall Street
Richard Drew/AP
By Noel Randewich

NEW YORK -- U.S. stocks ended sharply higher Tuesday, breaking a five-day losing streak as attention shifted from trouble in Chinese equities to U.S. corporate earnings and to speculation the first Federal Reserve interest rate hike may not come until December.

The Dow Jones industrial average and S&P 500 chalked up gains of more than 1 percent, while the Nasdaq composite lagged slightly.

The S&P has had five down days in a row and a lot of people are starting to nibble.

After the S&P sank over the past week toward the low end of a range it has traded in since February, some investors wagered the market was primed for a technical bounce-back.

"The S&P has had five down days in a row and a lot of people are starting to nibble," said Michael Matousek, head trader at U.S. Global Investors in San Antonio, which manages about $1 billion.

Market sentiment also reflected expectations the Fed would wait until December, rather than September, to raise interest rates for the first time since 2006, Matousek added.

With a two-day Fed policy meeting ending Wednesday, investors are looking for hints about the timing of that rate increase. No move on rates is expected this week.

"September is possible but the probability for a December rate hike is increasing," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

The Dow Jones industrial average (^DJI) rose 1.1 percent, to end the session at 17,630.27. The Standard & Poor's 500 index (^GSPC) gained 1.2 percent to 2,093.25 and the Nasdaq composite (^IXIC) added 1 percent to finish at 5,089.21.

All the 10 major S&P 500 sectors rose, with the energy index leaping 3 percent as oil prices recovered from near six-month lows.

U.S. consumer confidence weakened in July to its lowest level since September, due in part to a less optimistic outlook on the labor market.

Earnings Watch

Ongoing uncertainty related to China's stock market, which closed lower again Tuesday, took a backseat to U.S. corporate earnings.

With second-quarter reports well under way, analysts now expect overall earnings of S&P 500 companies to edge up 0.3 percent and revenue to decline 4 percent, according to Thomson Reuters (TRI) data.

"Earnings are growing but very slowly. The market's biggest concern is the lack of top-line growth and where that growth is going to come from," said Tim Courtney, chief investment officer of Exencial Wealth Advisors, which oversees $1.3 billion.

After the bell, Twitter (TWTR) jumped 5.2 percent and Gilead Sciences (GILD) rose 3 percent after both companies posted their second-quarter results. Yelp (YELP) slumped 13 percent after its report.

During Tuesday's session, SuperValu (VALU) jumped 10.6 percent. It said it was exploring a spinoff of its discount grocery chain Save-A-Lot into a publicly traded company.

Advancing issues outnumbered declining ones on the NYSE by 2.7 to 1. On the Nasdaq, 1.67 stocks gained for each that declined. The S&P 500 racked up 15 new 52-week highs and 12 lows. The Nasdaq composite posted 36 new highs and 163 lows. Some 7.3 billion shares changed hands on U.S. exchanges, above the daily average of 6.7 billion so far this month.

-Tanya Agrawal contributed reporting.

What to watch Wednesday:
  • The National Association of Realtors reports pending home sales for June at 10 a.m.
  • Federal Reserve policymakers meet to set interest rates and release a statement at 2 p.m.
Earnings Calendar
These selected companies are scheduled to release quarterly financial results:
  • Altria Group (MO)
  • Anthem (ANTM)
  • Facebook (FB)
  • General Dynamics (GD)
  • GlaxoSmithKline (GSK)
  • Hilton Worldwide Holdings (HLT)
  • Humana (HUM)
  • International Paper Co. (IP)
  • Level 3 Communications (LVLT)
  • Marriott International (MAR)
  • Mastercard (MA)
  • MetLife (MET)
  • Northrop Grumman (NOC)
  • Southern Co. (SO)
  • Whole Foods Market (WFM)

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chinaearningseconomyinvestingmarket newsstockswall streetworld marketsReuters2015-07-28T16:42:00+00:00
<![CDATA[From Rents to Haircuts, Americans Start to Feel Price Hikes]]>http://www.DailyFinance.com/2015/07/28/americans-see-price-hikes-inflation/http://www.dailyfinance.com/2015/07/28/americans-see-price-hikes-inflation/http://www.dailyfinance.com/2015/07/28/americans-see-price-hikes-inflation/#commentsFiled under: , , , ,

Mark Lennihan/APStarbucks is among the many businesses where consumers are paying more for goods and services.

WASHINGTON -- Apartment rents are up. So are prices for restaurant meals, haircuts, gym memberships and a cup of coffee.

For American consumers who have become used to flat or even falling prices for several years, an unfamiliar sight has emerged in many corners of the economy: Inflation is ticking up.

The price increases remain modest. And in many cases, they're canceled out by price declines for other items that are keeping overall inflation historically low.

Yet the stepped-up price tags for a range of consumer items are the largest since the Great Recession ended six years ago. They actually reflect a healthier economy: Many businesses have finally grown confident enough to pass their own higher costs on to consumers without fear of losing customers. Employers have added nearly 5.6 million jobs the past two years, allowing more people to absorb higher prices.
Signs of emergent inflation are a key reason the Federal Reserve, which is meeting this week, will likely raise interest rates from record lows later this year. Inflation has long trailed the Fed's 2 percent target rate but is on track to return to that level in coming months.

"That should give the Fed a little more confidence that ... they will meet their [inflation] objective," said Laura Rosner, an economist at BNP Paribas.

In June, the price of haircuts jumped 1.6 percent, the biggest monthly jump in the 62 years that the government has tracked the data. Over the past year, they've surged 2.8 percent, the largest year-over-year gain since 2008.

That's no surprise to Chrissie Crosby, a retired government worker in Alexandria, Virginia. She says her hair salon has started charging nearly $30 for a shampoo, blow dry and haircut, up from $22.

"It used to be a convenient place for a trim, because it was inexpensive, but it's no longer very inexpensive," she said.

Coffee prices jumped 6.1 percent in January from 12 months earlier, the most in nearly three years. Starbucks (SBUX) has responded by raising the price of a cup of coffee by between 5 cents and 20 cents.

And beef prices have soared nearly 11 percent in the past year, which has led Chipotle (CMG) to raise prices for steak and its beef barbacoa by an average of about 30 cents an entree, the company says.

The biggest driver of inflation this year has been residential rents. They climbed 3.5 percent in June from a year earlier, the fifth straight month with an annual gain of that size.

Overall, consumers have yet to be hit by significant increases for everyday purchases. Inflation as measured by the consumer price index has barely risen in the past 12 months, mostly because cheaper gas has held down the index.

But prices are rising. If you exclude food and energy, which tend to fluctuate sharply, "core" inflation has risen 2.3 percent at an annual rate in the past three months. In April, the three-month annual pace was 2.6 percent, well above the Fed's inflation target.

Economists expect the price increases to continue, in part because they're occurring mostly in services, whose prices tend to be comparatively stable. Economists call these "sticky" prices. They include rent, insurance, haircuts, restaurant meals and utility bills.

Sticky prices are slow to change. Utilities typically must ask regulators to approve price increases, for example, and most restaurants don't want to frequently reprint menus. But once prices in those categories do rise, they're usually slow to change course.

The Federal Reserve Bank of Atlanta maintains an index of sticky prices, which has risen 3 percent at an annual rate in the past three months, the most since the recession ended.

'No Reaction Whatsoever'

Labor costs for many service-sector companies are rising, lifted by minimum wages in an increasing number of states. Chipotle just raised prices 10 percent in San Francisco partly because of that city's minimum wage increase. Jack Hartung, the company's chief financial officer, said Chipotle has seen "no reaction whatsoever" from customers.

By contrast, prices for goods in some cases keep falling. Clothing, furniture, and many appliances are cheaper than they were a year ago, a result of global competition that's held down the costs of factory goods.

And gasoline and natural gas is much cheaper than they were last year. Through the first half of 2015, the average retail gasoline price is down 30 percent to $2.47 a gallon. Residential natural gas prices are down 9 percent, according to the Energy Information Administration.

People are finally getting back to the comforts they may have afforded prior to the recession, including splurging on haircuts and home cleaning services.

A big reason prices for services have risen is that they're increasingly where Americans are spending money. Consumers spent just 32 cents of every dollar on goods in the first quarter of this year, down from nearly 34 cents two years ago. Over the same period, services spending rose to 67.6 cents from 66.

"People are finally getting back to the comforts they may have afforded prior to the recession, including splurging on haircuts and home cleaning services," says Jack Kleinhenz, chief economist at the National Retail Federation.

Still, for many families that remain squeezed by sluggish pay growth, even small price increases hurt. Average hourly earnings rose just 2 percent in June from a year earlier, well below the 3.5 percent pace typical of a healthy economy.

Jeremy Beck, a lawyer in Louisville, Kentucky, has noticed a jump in his water bill and said electricity costs were also rising. But he and his wife, Christine Ehrick, a professor at the University of Louisville, said the biggest problem has been flat wages.

"Neither of us have seen our pay increase much at all in the past few years," Ehrick said.

-AP business writers Candice Choi, Anne D'Innocenzio and Jonathan Fahey contributed to this report from New York.

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coffeeconsumer goodseconomic indicatorseconomyfederal reservefood and drinkinflationinterest ratesservicesunemployment rateThe Associated Press2015-07-28T13:21:00+00:00
<![CDATA[Consumer Confidence Falls to Lowest Level Since September]]>http://www.DailyFinance.com/2015/07/28/consumer-confidence-falls-july/http://www.dailyfinance.com/2015/07/28/consumer-confidence-falls-july/http://www.dailyfinance.com/2015/07/28/consumer-confidence-falls-july/#commentsFiled under: , , , ,

Consumer Confidence
David Goldman/AP

WASHINGTON -- U.S. consumer confidence fell this month to the lowest level since September. Consumers are worried about the job market and rattled by events in Greece and China.

The Conference Board said Tuesday that its index of consumer confidence fell to 90.9 in July from a revised 99.8 in June. That's the lowest since September's reading of 89.

Consumers' assessment of current conditions fell slightly to a still-healthy 107.4 from 110.3 in June; but their outlook for the next six months dropped sharply to 79.9 this month, the lowest since February 2014 and down from 92.8 in June.

Lynn Franco, a Conference Board economist, says consumers may have been concerned about the debt standoff in Greece and a stock market plunge in China.

The percentage of consumers describing current business conditions as "good" slipped to 24.2 percent from 26.1 percent in June.

The percentage expecting the job market to improve over the next six months dropped to 13.1 percent from 17.1 percent in June; the percentage expecting fewer jobs in six months rose to 20 percent from 15.2 percent.

Consumers were also slightly less likely to expect their incomes to grow in the next few months and more likely to expect them to fall.

Adam Collins, an economist with Capital Economics, said the drop in confidence also reflects higher gasoline prices in recent months; prices hit bottom at $2.03 a gallon in late January and have since rebounded to $2.70 a gallon, according to AAA. Consumer caution may reduce spending to an annual growth rate of 2 percent in the July-September period from the 2.7 percent forecast for the April-June period, Collins said in a research note.

He predicted their mood will improve. "With the labor market likely to strengthen further, wage growth poised to accelerate and the recent fall in oil prices suggesting gasoline prices may start to decline again," he wrote, "confidence should rebound soon." He expects consumption growth should then rise back toward 3 percent.

Still, Mark Vitner, senior economist at Wells Fargo Securities, worries that consumers' darkening mood reflects bigger problems. A strong dollar has made U.S. products less competitive in foreign markets, hurting American manufacturers. And weakening global economic growth has pushed down commodity prices and hurt mining and energy firms.

"The slide likely reflects the pressure that weaker global economic growth and the stronger dollar are exerting on parts of the country tied to energy production, mining and agriculture," Vitner wrote in a research report.

The government will report Thursday on gross domestic product during the April-June quarter. The economy contracted 0.2 percent during the first three months of the year, pummeled by winter weather and global economic pressures that caused the dollar to rise in value and hurt the affordability of U.S. made goods abroad.

Economists say that the economy likely returned to growth in the second-quarter, expanding at a 2.7 percent annualized pace.

A separate survey of consumer sentiment compiled by the University of Michigan that was released this month showed a preliminary decline in sentiment from June to July.

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consumer confidenceconsumer spendingeconomic indicatorseconomygas pricesgdpThe Associated Press2015-07-28T12:20:00+00:00
<![CDATA[4 Job Search Excuses That Just Don't Cut It]]>http://www.DailyFinance.com/2015/07/28/job-search-excuses-that-dont-cut-it/http://www.dailyfinance.com/2015/07/28/job-search-excuses-that-dont-cut-it/http://www.dailyfinance.com/2015/07/28/job-search-excuses-that-dont-cut-it/#commentsFiled under: , , , ,

Bored mixed race businesswoman using laptop
Getty ImagesNo word back about the job you applied to? Don't get discouraged. Expect the the applicant reviewing process to take several weeks.
By Vicki Salemi

If you're looking for a job and feeling like it's taking a while, you may be right. That's because a job search won't happen overnight.

While a new job won't simply land in your lap a week (or even a month) from today, your efforts will certainly pay off in the end. You'll need to stick to the course, be persistent and follow through to realize that.

When I worked in recruiting and advised hiring managers who wanted to hire candidates extremely quickly, I repeatedly explained timing and expectations regarding the job posting, interview process and background check -- all of which took a minimum of six to eight weeks in a perfect world.

The process takes time, so don't give up on your job search during this time period. In reality, the search is probably successful and progress is being made. It may feel challenging to recognize strides when they're muddled between thoughts and beliefs that are not beneficial. Here are several excuses and ways to eliminate to eliminate them once and for all:

1. 'It's taking too long.' Years ago when I moved internally from international HR into recruiting, it took nearly two months for the interview process to occur, decisions to be made and for my transfer date to be confirmed. In hindsight, that's a pretty fast turnaround, but that didn't seem like that case as it was unfolding in real time.

New mantra: "Anything worth having is worth waiting for." We're used to being immersed in an instant gratification society. Want takeout? Within minutes, you can have a meal delivered to your door. Need a car service? There's an app for that, too. Texting a friend making dinner plans? Instant messages galore.

But job searching isn't instant. Leverage your insatiable appetite for a new job as fuel to continue pursuing meaningful networking rather than allowing that same hunger to stifle and distract you. Create an Excel spreadsheet, take notes in your smartphone or do whatever you need to do to stay organized and remain focused. Keep your eye on the prize.

Making life changes -- whether it's finding a new job, buying a house or researching rescue shelters to get a new dog -- will take time, energy and effort. Accept that as part of the process, and focus on what you do have control over -- your actions and positive beliefs.

2. 'But I haven't interviewed in years. My skills are rusty.' Sure, this may be true, but there is no time like the present to eliminate this alienating thought, which serves as a block to either not interview at all or not ace an interview once one has been scheduled.

New mantra: "I'm an excellent conversationalist and enjoy meeting new people." You've most likely had meaningful conversations about your career, whether it was during a year-end performance review with your boss or a conversation with your mentor, mentee or staff.

As for your interview skills, they may feel a little rusty, but you may be pretty skilled at making small talk, highlighting your strengths and asking intuitive questions. That sounds a lot like a job interview, doesn't it? The only way to remedy the situation (in addition to owning the new mantra) is to start interviewing.

3. 'I don't even have a resume. I can't start looking for a new job without one.' Even if you don't have a current resume, you can always work on one. Begin today!

This is similar to working out: You may feel out of shape, and yet the only way to get fit is to simply start moving. One situp leads to two and then three, and the same applies to your resume, so get moving.

And just because you don't have a resume readily available doesn't mean you shouldn't network. When I worked in corporate recruiting, sometimes resumes got submitted after the fact. As in: "Congratulations, you're hired -- and, by the way, we need you to submit your resume so we'll have it on file and can generate an offer letter from the system."

Yes, you'll need a resume for the job-search process, but don't let not having one prevent you from having meaningful networking conversations, which can lead to interviews and possible job offers.

New mantra: "My resume is my passport -- but instead of a new destination, it's leading me to a new job." Think of your resume as your one-way ticket to a new job.

Instead of dreading it, embrace it as your port of entry. Candidates have told me once they actually sat down to revise their old one, the process didn't take as long as they originally anticipated. Working on their resume took less time then the amount of time spent procrastinating.

Remember that your resume is a work in progress. You can tweak responsibilities and revise the document as you go along. After you land a new job, incorporate facets from the job description into your resume.

4. 'My resume is just going to get submitted into a black hole online, so I'm not going to bother.' That's like forfeiting a ballgame by not even showing up. You owe it to yourself to show up. The applicant tracking system (better known as the ATS), will get inundated with resumes pegged to each specific job opening, but that doesn't mean you shouldn't apply.

While it does help to have a referral so your resume is flagged differently in the system for recruiters to easily spot, don't give up. Definitely apply.

New mantra: "My efforts are paying off." One of the most important things to remember about your job search is progress. Many job seekers tend to only focus on one tangible aspect: whether or not they landed a new job. In reality, many other intangible strides are taking place, such as conversations, applications, interviews, open doors and movement closer to your goal.

Although you may not have landed a new job just yet, keep the faith and, more importantly, keep the focus.

Vicki Salemi is a career expert for Monster, a global leader in connecting people to jobs. She utilizes her more than 15 years of experience in corporate recruiting and human resources to empower job seekers with insights and firsthand knowledge from the halls of HR. A public speaker and consultant, Vicki is the author of "Big Career in the Big City," and former creator/host/producer of MediabistroTV's "Score That Job."

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changing jobsfirst jobjob marketjob searchU.S. News2015-07-28T11:08:00+00:00
<![CDATA[A Year After Shake-Ups: Where Walmart, Target Stand]]>http://www.DailyFinance.com/2015/07/28/target-walmart-ceos-year-later/http://www.dailyfinance.com/2015/07/28/target-walmart-ceos-year-later/http://www.dailyfinance.com/2015/07/28/target-walmart-ceos-year-later/#commentsFiled under: , , , ,

Target Corp CEO Cornell
Richard Drew/APTarget Chairman and CEO Brian Cornell
By Krystina Gustafson

Change doesn't come easy -- particularly when you're trying to move the needle at a company that rakes in hundreds of billions in annual sales.

Still, when new CEOs took over at two of the country's largest retailers within a three-day time span last year, experts knew major changes were in store for the industry.

As Greg Foran and Brian Cornell mark their one-year anniversaries at Walmart U.S. (WMT) and Target (TGT) next month, the two are looking to continue building on the frameworks they've put in place, and set their companies up for future growth.

Although both retailers cater to a still-struggling consumer, the financials are starting to trend in their favor. Both big-box stores posted two consecutive quarters of traffic gains in the most recent periods. They've also recorded three straight quarters of same-store sales gains, following a string of flat or lower results.

Target, however, has delivered an upside surprise to Retail Metrics' quarterly revenue and earnings estimates for the past three quarters, whereas Walmart has disappointed twice on revenue and once on profit.

As a result, Target's shares have climbed 36 percent under Cornell, while Walmart's shares have dropped roughly 4 percent during Foran's tenure.

"They've done a nice job," said Craig Johnson, president of Customer Growth Partners. "With the dramatic changes [Cornell has] made... you're seeing the rudder turn and you're seeing a significant change there."

"Walmart has a bigger turning radius than Target," Jonson added.

Target Rips Off the Bandage

To Moody's analyst Charles O'Shea, Target's biggest success under Cornell came from one of the biggest failures in its history: Canada.

Just five months after Cornell took control, he announced that the company would incur a $500 million-plus cash cost to shutter its 133 stores there. The locations, which fell flat with Canadian consumers due to their high prices and empty shelves, weren't expected to be profitable until at least 2021.

"It's almost mind-boggling to see what happened up there," O'Shea said. "That was priority No. 1."

Closing up shop in Canada was one of a string of tough decisions Cornell has made, Johnson said. To reduce costs and speed up the decision-making process, the CEO in March said the company would cut several thousand jobs in a $2 billion savings plan. And just last month, Target parted ways with longtime merchandising chief Kathee Tesija.

"Fixing the merchandise is a big deal," Johnson said.

Part of what has traditionally separated Target from its low-price competitors was its reputation for cheap but chic items. But as other stores started a race to the bottom in the post-recession years, even the bull's-eye retailer has admitted it focused too much on the "pay less" portion of its "expect more, pay less" proposition.

There are so many fronts that you have to fight on.

Updating the stores' merchandise is at the core of one of Cornell's biggest initiatives -- prioritizing what the company refers to as its four "signature" categories: style, baby, kids and wellness. Analysts agree Target has made strides in once again differentiating merchandise, including its blockbuster limited-time collection with Palm Beach-inspired fashion house Lilly Pulitzer (OXM).

But there is still work to be done, including finding a new chief merchant.

Cornell, who comes from the consumer packaged goods industry, has listed grocery as another of his major priorities, and recently hired former PetsMart and Safeway executive Anne Dament to lead the charge.

Accelerating the food business, which together with pet supplies accounts for 21 percent of Target's sales, could deliver a significant traffic boost to the retailer, as consumers shop for food five times as often as everything else, O'Shea said.

But it's also a difficult business to get right -- particularly as Walmart zeros in on the category.

Target is also hoping its recent partnership with CVS will boost visits to its stores. Through this deal, Target last month sold its pharmacy business to CVS Health (CVS), which could provide it with millions of repeat customers.

"Target could potentially realize incremental sales as it picks up incident front-end purchases that customers used to make at [a] CVS location," Cowen & Co. analyst Oliver Chen wrote in a note to investors.

That's not to say Target is taking its foot off the gas on the Web. Although O'Shea said its online operations still lag competitors such as Walmart or Best Buy (BBY), it's improved its tablet app, and its Cartwheel savings app continues to offer shoppers value.

O'Shea said he's not sure, however, how much longer Target -- or Walmart for that matter -- can continue offering free shipping promotions in an effort to steal business from Amazon.com (AMZN).

"There are so many fronts that you have to fight on," O'Shea said.

Walmart Going Back to Basics

Turnaround at Walmart U.S. has been understandably slower. With $288 billion in annual sales, the retailer's largest unit alone pulls in twice as much revenue as the second-biggest U.S. retailer, Kroger (KR).

Though Walmart's sales and profits have failed to break out during Foran's tenure, the retailer recently reignited the minimum wage debate by boosting hourly pay for 500,000 of its U.S. workers to $9 an hour. Although experts agreed the move would dilute its profits, it should "start to bear dividends down the road," Johnson said.

"When you pay people just minimum wage or close to minimum wage, you're going to have a turnover problem," Johnson said.

Now, by incentivizing store associates to stick around longer -- and providing additional training to managers -- the stores' operations should improve. That includes everything from keeping its shelves stocked, having enough shopping carts at the front of the store, and cutting down on the long lines that have frustrated Walmart shoppers.

Improving operations in the retailer's fresh food business is particularly important, as grocery accounts for more than half of its revenues. This is something the retailer has to get right, since Target sets the category in its crosshairs.

Perhaps Walmart's biggest opportunity in this area is its small-format Neighborhood Market stores, which are located in more urban areas and skew toward grocery. These stores, which now account for more than 10 percent of the retailer's U.S. store count, offer shoppers a low-cost alternative for everyday items that they need during the week. They stand in contrast to its supercenter format, which cater to shoppers who want to stock up on bulk items.

"It's hard to argue with all those points of distribution," O'Shea said. "You take advantage of the fill-in trip and you also become a competitor to every other retailer out there."

"Greg is really focused on that."

Johnson said he would like to see Walmart further accelerate its rollout of small-format stores, though they still have some operational issues. Problems include such retail basics as having enough handcarts to accommodate for small trips, and staying in-stock on fresh foods, Johnson said.

These examples fall in line with the priorities Foran outlined at Walmart's investor meeting in April. First on the list: Improve the customer experience. As such, he acknowledged the retailer needs to do a better job getting inventory levels right and improving the flow of product to the selling floor.

Stores have also started to reduce the price on products that are nearing their expiration date, which he estimates will deliver $500 million in annual savings. And moving forward, Foran plans to improve the lighting, layout and temperature in some of its stores.

Although that doesn't mean the retailer will lose focus on savings, Johnson said Walmart can't rely on price alone to get people in the door.

Foran echoed that sentiment back in April.

"To be really frank, if we went out there and started shouting about price today, I don't think you'd get a great return on your investment," he said.

"I think customers would want to make sure that we are in stock, that the store was clean, including the toilets, that fresh was reasonably fresh and that the service from the front end was appropriate."

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ceodepartment storesdiscount storesinvestingmanagementretailstocksstorestargetwal-martwall streetwalmartCNBC2015-07-28T09:27:00+00:00
<![CDATA[Case-Shiller: Home Prices Rise 4.9% in May]]>http://www.DailyFinance.com/2015/07/28/case-shiller-home-prices-rise-may/http://www.dailyfinance.com/2015/07/28/case-shiller-home-prices-rise-may/http://www.dailyfinance.com/2015/07/28/case-shiller-home-prices-rise-may/#commentsFiled under: , , , ,

Centennial Real Estate
Steve Nehf/The Denver Post via Getty Images
By Tom DiChristopher

U.S. home prices continued to rise in May, according to the S&P/Case-Shiller Home Price Index, but the increase fell short of analyst estimates.

The 20-city index rose 4.9 percent year-over-year in May. Analysts had expected an increase of 5.7 percent.

Denver led the gains with 10-percent year-over-year appreciation in home prices, following by San Francisco and Dallas, where prices rose 9.7 percent and 8.4 percent, respectively.

Nationally, single-family home prices have settled into an annual 4 to 5 percent pace of increase, moderating after "double-digit bubbly pattern of 2013," according to S&P/Case-Shiller.

"Over the next two years or so, the rate of home price increases is more likely to slow than to accelerate. Prices are increasing about twice as fast as inflation or wages," David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, said in a statement.
The weak link in the market remains first-time home buyers, S&P/Case-Shiller reported.

"First time buyers provide the demand and liquidity that supports trading up by current home owners. Without a boost in first timers, there is less housing market activity, fewer existing homes being put on the market, and more worry about inventory," Blitzer said.

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buying a housecase-shillerfirst househome buyinghome priceshousing marketinflationmortgagesreal estateCNBC2015-07-28T09:11:00+00:00
<![CDATA[After Strong Quarter, Ford Aims to 'Disrupt Like a Startup']]>http://www.DailyFinance.com/2015/07/28/ford-earnings/http://www.dailyfinance.com/2015/07/28/ford-earnings/http://www.dailyfinance.com/2015/07/28/ford-earnings/#commentsFiled under: , , , ,

Ford Truck Missouri Plant
Charlie Riedel/APA worker inspects a new 2015 aluminum-alloy body Ford F-150 truck at the company's Kansas City Assembly Plant in Claycomo, Mo.
By Bernie Woodall

DETROIT -- Ford's chief executive, Mark Fields, said Tuesday he wants the company to act "like a startup" as it prepares for an evolution of the auto industry, after it posted second-quarter profit that handily beat expectations.

Ford and other major automakers are racing to position themselves to profit during what Fields termed a rare "period of change and disruption in the industry" that includes car-sharing, autonomous vehicles, connected cars and new ways for people to get around.

Fields pointed to 25 experiments Ford announced earlier this year to determine mobility needs of the globe's consumers in coming decades.

We are really pushing ourselves to think, to act, and disrupt like a startup company.

"We are really pushing ourselves to think, to act, and disrupt like a startup company," said Fields, who heads the automaker founded by Henry Ford 112 years ago.

It is too early to determine the success of Ford's efforts to adapt to a changing industry, Barclays analyst Brian Johnson said in an interview, adding, "It's very encouraging that [Fields] and [Executive Chairman] Bill Ford are thinking about this type of thing."

Ford's traditional business in the second quarter generated the company's highest automotive profit since 2000, based on the strength of its core pickup truck and SUV business in the North American market.

Fields and Ford Chief Financial Officer Bob Shanks said the second half of 2015 will generate more than the $4.3 billion in first-half operating profit, as new launches increase sales and command better prices. The company maintained its 2015 operating profit forecast of between $8.5 billion and $9.5 billion.

Beating the Street

Ford posted net quarterly profit of $1.89 billion, or 47 cents a share. Analysts estimated profit of 37 cents a share, according to Thomson Reuters I/B/E/S.

Ford (F) shares were up 1.9 percent Tuesday afternoon to $14.83.

Operating profit totaled nearly $2.6 billion in North America, a company record for any quarter.

Ford also maintained a forecast of North American profit margin between 8.5 percent and 9.5 percent. First-half North American margin was 9.1 percent.

Operating profit in Asia Pacific rose 21 percent to $192 million despite a dip in industry sales in China, the world's biggest auto market.

"As this has been happening, we have been adjusting our production all along" due to the lower demand, said Shanks.

Ford lowered its 2015 forecast for industry sales in China to 23 million to 24 million vehicles, from 24.5 million to 26.5 million at the start of the year.

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auto industryautomakersearningsf-150fordford earningsinvestingmanufacturingstockswall streetReuters2015-07-28T08:26:00+00:00
<![CDATA[10 Things You Should Know About Medicare]]>http://www.DailyFinance.com/2015/07/28/what-you-should-know-about-medicare/http://www.dailyfinance.com/2015/07/28/what-you-should-know-about-medicare/http://www.dailyfinance.com/2015/07/28/what-you-should-know-about-medicare/#commentsFiled under: , , , ,

50th. Anniversary
Getty ImagesAs you celebrate Medicare's special birthday, make sure you know the ins and outs of the program.
By Emily Brandon

Medicare turns 50 years old Thursday. The health insurance program was signed into law by President Lyndon Johnson on July 30, 1965, and former President Harry S. Truman and his wife were the first beneficiaries. Medicare continues to cover hospital and doctor's visits for older Americans and now includes many types of preventive care and prescription drugs. Here are 10 important things you should know about Medicare.

What's covered. Medicare Part A covers hospital care and some types of home health care. Medicare Part B is medical insurance that pays for doctor's office visits and outpatient services. Medicare Part C or Medicare Advantage Plans are an alternative to original Medicare provided by private insurance companies, often with extra coverage restrictions. Medicare Part D will cover prescription drugs, typically in exchange for an additional premium.

How much you are paying in. Most workers pay 1.45 percent of their earnings into the Medicare system, and employers match that amount. Self-employed workers contribute 2.9 percent of their income. Earnings that exceed $200,000 for individuals and $250,000 for couples trigger an additional 0.9 percent tax.

The enrollment deadlines. You can enroll in Medicare during the seven-month period that begins three months before the month you turn 65. Coverage can start as early as the month of your 65th birthday. If you don't sign up during this initial enrollment period, you could be charged higher premiums for the rest of your life. "If they sign up later than 65 for Medicare, they are going to pay late penalties," says Tanya Feke, a medical doctor and author of "Medicare Essentials: A Physician Insider Explains the Fine Print." "Someone who is working and has health insurance through their employer, they may be able to delay signing up for Medicare without penalties." If you postpone signing up for Medicare due to group health insurance through your current employer, sign up for Medicare within eight months of leaving the job or the coverage ending to avoid the penalty.

Premium amounts. Most people don't pay a premium for Medicare Part A. The standard Medicare Part B premium is $104.90 in 2015, but the monthly costs are higher for people with a modified adjusted gross income above $85,000 for individuals and $170,000 for couples. Medicare Part D premiums vary depending on the plan you select.

Other out-of-pocket costs. There's a $147 Medicare Part B deductible in 2015, after which you will be charged 20 percent of the Medicare-approved amount for most services with no annual limit on out-of-pocket costs. Medicare Part A has a $1,260 deductible if you are hospitalized, and additional costs apply if your hospital stay exceeds 60 days. "Medicare Part A and Part B pays a portion, but you are responsible for a portion of that bill," says Ronald Kahan, a medical doctor and author of "Medicare Demystified: A Physician Helps Save You Time, Money, and Frustration."

Free services. Medicare beneficiaries qualify for a free wellness doctor's office visit once every 12 months. Many preventive care services also don't have any cost-sharing requirements such as flu shots and mammograms. However, if a problem is discovered during a wellness visit or additional tests are required, it may trigger other out-of-pocket costs.

Prescription drug coverage. Retirees get to choose between an average of 30 Medicare Part D prescription drug plans in their area, each with different premiums, covered medications and cost-sharing requirements. Prescription drug plans are allowed to change their covered medications and costs each year. "Every year the insurance companies change their formularies, which is the drugs they cover, and how much they charge for those drugs," says Joseph Matthews, an attorney and author of "Social Security, Medicare & Government Pensions: Get the Most Out of Your Retirement & Medical Benefits." "Each year you have to figure out if the D plan that you have is still the best one for you, both in terms of cost and coverage." You can shop around for a new Medicare Part D plan once a year during the open enrollment period from Oct. 15 to Dec. 7, and consider switching if you can find a plan that better meets your needs.

How to supplement Medicare. A Medigap plan can be used to cover traditional Medicare's out-of-pocket costs. "You can minimize deductibles and copays if you sign up for a Medigap policy," says Sudipto Banerjee, a research associate at the Employee Benefit Research Institute. You can first purchase a Medigap policy during the six-month period that begins when you're 65 or older and enrolled in Medicare Part B. After this period ends you could be charged significantly higher premiums or even denied supplemental coverage.

What's not covered. Medicare typically doesn't cover eyeglasses, contact lenses, hearing aids or dental care. Medicare also won't pay for more than 100 days of long-term care such as nursing home stays or assisted living.

Almost all older Americans use it. In 1966, 19 million people enrolled in the program. That number has gradually increased each year to 53.8 million people in 2014. The program continues to provide valuable health insurance to most Americans ages 65 and older, regardless of their health status.

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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<![CDATA[8 Steps to Save Big at CVS]]>http://www.DailyFinance.com/2015/07/28/how-to-save-big-cvs/http://www.dailyfinance.com/2015/07/28/how-to-save-big-cvs/http://www.dailyfinance.com/2015/07/28/how-to-save-big-cvs/#commentsFiled under: , , , ,

How to Save Up to 90% at CVS

By Ari Cetron

Say you want to buy some shampoo. You walk into the local CVS, pick it up, take it to the register and pay whatever price it said on the shelf. Rookie mistake.

Through a combination of coupon clipping, sale-watching and the company's rewards program, you can stack various discounts to realize a huge savings. And make sure you are thinking about more than just the pharmacy counter, or health and beauty items, there's a lot of things you probably should be buying at drug stores.

Rhode Island-based CVS Health (CVS) has more than 7,700 locations in 42 states, so it's likely there's one near you. These eight steps will get you started on a track to big savings. The basic premise is to use your CVS card and combine it with coupons to help you score a good deal. For other ideas and weekly deals and suggestions, check out www.wildforcvs.com.

1. Get and register the card. It seems as though most large stores have some kind of rewards card, and CVS is no exception. Get that card and use it on all of your purchases at the store. Make sure you register the card online. If you sign up for email alerts, you'll get a steady flow of coupons and offers. Of course, you'll have to weigh that against the extra clutter in your inbox. It's a personal choice, just know that the extra coupons are a key point of the overall savings strategy. Extra Care Bucks: Your card will track your purchases and keep a tally of them. Depending on how much you spend, and what you spend it on, you'll earn extra cash to spend in the store. Whatever the amount is, you won't get change back from it, so make sure you spend the full amount (or more) when you redeem the bonus money. The credits often must be used within 30 days, so don't lollygag once you get them.

2. Read the circular. CVS sends out a weekly circular, get it and read it. If you can't find a copy, go to www.CVS.com and read the online version. Make sure to pay special attention to the items that give you a bonus in Extra Care Bucks. Some, for example, might say free with the Extra Care Bucks. This means that you'll pay the full price at the register the day you buy it, but you'll get the same amount in extra care credit. If you have a coupon, use it, then you'll pay less for the item and still get the full amount of Extra Care Bucks -- almost like getting paid to take the item away from the store.

It might also help to pay attention to how often the deals come up for the products you buy. Say your brand of soap comes up for a special deal once a month, it could be good to stock up when it happens (soap won't go bad, after all), or it might be better for you to wait until the next time it comes around.

3. Clip the coupons. Keep an eye out for manufacturer's coupons -- the sort you might find in a newspaper or mailed circulars -- and CVS store coupons. CVS allows you to use one of each when you make a purchase, so if you have $1 off from one source and another $1 from the other, that's $2 off. If that item has Extra Care Bucks attached to it, you'll really be raking it in.

4. Keep the bucks alive. You only have 30 days to spend the Extra Care Bucks, but what if there's nothing you want or need to buy that month? Buy something anyway. Find items that will generate the same amount of Extra Care Bucks and make the purchase. This effectively gives you another 30 days to spend the money. If you really, really don't need the items, maybe a friend does, or donate them to a local nonprofit and take the tax write off if you can.

5. Get rain checks. If they don't have the item you want in stock, ask the clerk for a rain check, a slip of paper that allows its holder to purchase the item at the sale price at a later date. The Extra Care Bucks will still be part of the offer when you eventually do make the purchase. Check the expiration date. If you have time, it may even pay to wait until you have a coupon or other deal for that product before you cash in the rain check.

6. Spend it all. You won't get change back from using extra bucks. If you've got $15 in extra bucks and only $13 in purchases, those other $2 are lost, so find something to spend them on. Little items can be a good idea, like travel sized toothpaste or shampoo to bring on your next trip, or maybe a candy bar, after saving all that money, you earned a little treat.

7. Store it all. Don't be afraid to buy more nonperishable items than you need right now. Things like cleaning supplies, soaps and toiletries won't go bad. If you stock up on them when you find a deal, you'll never be out and never have to pay full price. Just make sure you have the proper space for all of the stuff you'll have.

8. Extra transaction. If you've got multiple items with Extra Bucks on them, consider not buying them all at once. Buy each one in a separate transaction, and use the extra bucks on the next item. This will usually result in a tradeoff of having to pay less that day, but then having fewer Extra Care Bucks to use the next time. So you'll need to weigh which you need more, the cash today or the cash next week.

Do you have tips and tricks for saving money on drugstore items? Share them in comments below or on our Facebook page.

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bargainscouponscvsdealsdrugstoreshealth carepersonal financeprescription drugsretailshoppingMoney Talks News2015-07-28T05:00:00+00:00
<![CDATA[Forget Florida; Retirees Opting for Pot-Friendly States]]>http://www.DailyFinance.com/2015/07/28/marijuana-friendly-states-popular-retiree-destinations/http://www.dailyfinance.com/2015/07/28/marijuana-friendly-states-popular-retiree-destinations/http://www.dailyfinance.com/2015/07/28/marijuana-friendly-states-popular-retiree-destinations/#commentsFiled under: , , , ,

Cannabis Supporters Hope For Legalization
Getty Images
By Krystal Steinmetz

When you think of popular retirement destinations, Florida and Arizona likely come to mind.

But according to Reuters, some U.S. retirees are considering more than warm weather, good health care and close proximity to grandkids when deciding where to retire. Many American seniors are choosing to enjoy their golden years in a marijuana-friendly state.

Chris Cooper is a 57-year-old retired investment adviser from Ohio. He opted to retire in San Diego because California has legalized medical marijuana use. Cooper, who doesn't like heavy-duty prescription painkillers like Vicodin, told Reuters that marijuana eases his back pain and spasms.

"[Marijuana] stores are packed with every type of person you can imagine," said Cooper, who uses marijuana once or twice a week, often orally. "There are old men in wheelchairs, or women whose hair is falling out from chemotherapy. You see literally everybody."

A lot of the things marijuana is best at are conditions which become more of an issue as you get older.

More seniors are turning to marijuana to ease the aches and pains of aging. The most recent data from the Substance Abuse and Mental Health Services Administration found that marijuana use has increased among Americans ages 50 and older in the last 10 years.

"A lot of the things marijuana is best at are conditions which become more of an issue as you get older," Taylor West, deputy director of the Denver-based National Cannabis Industry Association, told Reuters. "Chronic pain, inflammation, insomnia, loss of appetite: All of those things are widespread among seniors."

Although it's difficult to pinpoint exactly how many seniors are picking a state to retire based on its marijuana laws, Michael Stoll, a professor of public policy at University of California, Los Angeles who studies retiree migration trends, told Reuters that "there is anecdotal evidence that people with health conditions which medical marijuana could help treat, are relocating to states with legalized marijuana."

Oregon voters passed a ballot initiative legalizing pot in November. The state has since experienced a 5 percent jump in people moving there. United Van Lines data shows that the Mountain West, which also includes marijuana-friendly Colorado, "boasted the highest percentage of people moving there to retire," Reuters said.

Gray-haired retirees flocking to pot-friendly states is quite a divergence from the stereotype of the early 20s "pothead" who has no job, little ambition and lots of Cheetos.

But it's not quite so surprising when you consider that the retiring baby boomers were in college during the 1960s and 70s, when marijuana use was prevalent.

"In Colorado, since legalization, many dispensaries have seen the largest portion of sales going to baby boomers and people of retirement age," West said.

Are you surprised that many retiring baby boomers are migrating to pot-friendly states? Do you think pot should be legalized? Share your comments below or on our Facebook page.

Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free!

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baby boomerscoloradodrugshousing marketmarijuanamovingpersonal financereal estateretirementwashingtonMoney Talks News2015-07-28T05:00:00+00:00
<![CDATA[Why Americans Are So Terrible at Financial Literacy]]>http://www.DailyFinance.com/2015/07/28/americans-terrible-financial-literacy/http://www.dailyfinance.com/2015/07/28/americans-terrible-financial-literacy/http://www.dailyfinance.com/2015/07/28/americans-terrible-financial-literacy/#commentsFiled under: , , , ,

Worried couple working on personal finances
Getty Images
By Lauren Lyons Cole

NEW York -- American students spend about 1,000 hours in school each year, and yet very few, if any, of those hours are dedicated to learning about personal finance. It should come as no surprise then that U.S adults perform poorly when quizzed on basic financial concepts like interest rates and inflation. Only 22 percent of women and 38 percent of men aced a three-question test conducted by the Global Financial Literacy Excellence Center. Among people under age 35 the numbers are even worse. Only 12 percent of women and 26 percent of men correctly answered all three questions.

"There is substantial evidence that more financially savvy people are more likely to plan, save, invest in stocks, and accumulate more wealth," according to a report published recently by the Global Financial Literacy Excellence Center. "They also have been shown to be less likely to have credit card debt, and when they do borrow, they manage loans better, paying off the full amount each month rather than just the minimum due."

When people make poor financial decisions, this can get them into deep financial trouble over their lifetimes.

Clearly, financial education is an important component of developing economic independence. According to the report's authors, Olivia S. Mitchell and Annamaria Lusardi, "more than one-third of U.S. wealth inequality could be accounted for by differences in financial knowledge."

That number could be even higher than one-third. According to the Survey of Consumer Finances, 46.7 percent of American households carry credit card debt. A Bankrate study found that a similar proportion of Americans, 48 percent, isn't investing in the stock market.

"When people make poor financial decisions, this can get them into deep financial trouble over their lifetimes," the authors write. "In turn, these difficulties can spill over to their families and the rest of the economy."

Much work remains to be done, but Americans are open to learning more. According to the report, consumers would trade 3 percent of their consumption over the course of their lifetime to gain the financial knowledge needed to improve their overall well-being. They can begin their efforts in three areas:

Understanding How Interest Rates Work

Not all debt is created equal. Interest rates are the most important factor to consider when deciding how to prioritize a debt repayment plan. Many Americans are stressed about student loans, but the majority of interest rates for education debt range from 3 to 8 percent. A borrower who is also carrying credit card debt with an interest rate of 15 percent, should prioritize putting extra cash toward the credit card debt, while making the minimum student loan payment. Over time, this strategy will minimize the total amount of money spent paying off debt.

Overcoming a Fear of Investing

The recent recession has left many people, especially young people, afraid of investing. Historically, the stock market is the best way to ensure account balances grow at a rate that outpaces inflation. For gun-shy investors, choosing a target date mutual fund is a perfectly good place to start. Target date funds rebalance regularly to manage risk and return in relation to age. Not investing at all is likely to result in a retirement funding shortfall that could potentially be debilitating.

Making More to Save More

Wages have been stagnant in recent years, leaving it difficult for many people to save money. Cutting expenses can only go so far. The single best way to have more money is to make more money. According to a study from Salary.com, 44 percent of American workers never negotiate their salary during performance reviews. This adds up to hundreds of thousands of dollars in lost income during one's working years. Employees aren't the only ones suffering from a lack of financial knowledge. Preliminary research from the Global Financial Literacy Excellence Center indicates that there may also be a connection between financial literacy and successful entrepreneurism. Yet another reason to invest in financial education in schools and the workplace.

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credit cardsdebteducationfinancial literacyinflationinterest ratesinvestingpersonal financesavingsTheStreet.com2015-07-28T05:00:00+00:00
<![CDATA[The Good, Bad and Ugly of International Mutual Funds]]>http://www.DailyFinance.com/2015/07/28/should-you-invest-international-mutual-funds/http://www.dailyfinance.com/2015/07/28/should-you-invest-international-mutual-funds/http://www.dailyfinance.com/2015/07/28/should-you-invest-international-mutual-funds/#commentsFiled under: , , , ,

Couple sitting in the living room doing online banking
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Investors looking to add some global sizzle to their portfolios without having to pack a passport often turn to mutual funds to gain international exposure. It's happening in a major way these days. Investors may have poured a net $35 billion into domestic stock funds last year, but that's nothing compared to the net $228 million put to into play in international funds according to industry tracker Investment Company Institute.

Should you follow the herd overseas? The rewards could be substantial, but the same can also be said about the risks. Let's go over some of the things to keep in mind before going global with your portfolio.

The Good

The chief arguments in favor of mutual funds in general -- instant diversification with a single investment, seasoned money management calling the shots and reasonable liquidity -- also apply to international stock funds.

Another major advantage is that investors don't often have easy access to researching and buying overseas companies. There are plenty of foreign companies that trade on stateside exchanges, but international funds often go directly to the underlying markets to buy from a wider pool of stocks. Paying for professional money managers who devote their time to researching international stocks is also a strong selling point for stateside investors, even those who prefer to pick domestic stocks on their own.

The Bad

There is a price to pay for proven money management, and that comes in higher fees than typical mutual funds. Investors in international stock funds faced an average expense ratio of 1.47 percent in 2013, according to premium research provider Morningstar (MORN). That's quite a bit more than the 1.25 percent average being shelled out by investors in U.S. equity funds. That may not seem like a big difference: We're talking about $22 a year in management expenses for every $10,000 invested. However, it does add up over time.

The Ugly

The pursuit for exotic returns also often comes with exotic risks. Investors learned that the hard way when the strong dollar ate into the returns of funds buying into overseas stock markets. The euro crisis and setbacks in Asia also stung results. The average large-cap international fund surrendered 4.8 percent of its value. That doesn't stack up very favorably to the S&P 500's (^GSPC) better than 13 percent return.

There's also great volatility for international investors, particularly for those buying into country-specific funds. One of last year's hottest regions for investors was India, but India-focused stock funds were the worst performers during the most recent quarter.

Since many international funds don't actually hedge against currency risk, it's often a wild ride.

So, yes, there are some legitimate advantages to buying into international mutual funds. You get seasoned management that researches foreign equities for a living. That's valuable, but with few exceptions that exposure also carries greater risks.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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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internationalinvestingmutual fundspersonal financeretirementsavingsRick Aristotle Munarriz2015-07-28T05:00:00+00:00
<![CDATA[Market Wrap: Wall Street Drops as China Slump Stokes Fears]]>http://www.DailyFinance.com/2015/07/27/market-wrap-wall-street-drops-china-stock-slump-stokes-fears/http://www.dailyfinance.com/2015/07/27/market-wrap-wall-street-drops-china-stock-slump-stokes-fears/http://www.dailyfinance.com/2015/07/27/market-wrap-wall-street-drops-china-stock-slump-stokes-fears/#commentsFiled under: , , , , , ,

NYSE Opens After Chinese Markets Take Massive Plunge
Spencer Platt/Getty Images
By Noel Randewich

NEW YORK -- Wall Street sank Monday, with the Nasdaq losing almost 1 percent after the steepest decline in Chinese stocks in eight years increased concerns that cooling growth in the world's No. 2 economy could hurt China's trading partners.

The Dow Jones industrial average finished at its lowest since February, the Nasdaq composite hit a four-week low and the benchmark S&P 500 ended at its lowest in over two weeks. In an additional negative sign, 480 stocks hit 52-week lows on the New York Stock Exchange, the most in one day since Oct. 15.

After Chinese stocks plunged more than 8 percent, the top securities regulator said Beijing would keep buying shares to stabilize the market as an unprecedented rescue plan already in place appeared to sputter.

U.S.-listed shares of Chinese companies slid, including Alibaba (BABA) and Baozun (BZUN).

It's hard to assess whether China single-handedly can deep-six the market.

Commodity prices resumed a downward spiral, with the Thomson Reuters CRB commodities index hitting a six-year low and oil a four-month low.

"It's hard to assess whether China single-handedly can deep-six the market," said Chuck Carlson, chief executive at Horizon Investment Services in Hammond, Indiana. "A significant slowdown in China impacts not just the U.S. but global players as well."

The Dow Jones industrial average (^DJI) fell 0.7 percent to end at 17,441.79 points. The Standard & Poor's 500 index (^GSPC) lost 0.6 percent to end at 2,067.75. The Nasdaq composite (^IXIC) dropped 1 percent to 5,039.78.

Nine of the 10 major S&P 500 sectors were lower, with the energy index's 1.4 percent fall leading the decliners.

Corporate Earnings

With second-quarter reports well under way, analysts expect overall earnings of S&P 500 companies to drop 0.3 percent and revenue to decline 3.9 percent, according to Thomson Reuters (TRI) data.

Such results could inflate already relatively pricey valuations. The S&P 500 trades near 16.9 times forward 12-month earnings, above the 10-year median of 14.7 times, according to StarMine data.

"Valuations are a concern right now," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas. "We really need to see corporate revenue growth."

The main event for U.S. markets this week is likely to be the two-day Federal Reserve meeting, the last before September, which still looms as the first possible date for an interest rate increase.

Teva Pharmaceutical's (TEVA) shares jumped 16.4 percent to a record high of $72 after it agreed to buy Allergan's generic drug business for $40.5 billion, giving up on its bid to buy Mylan. Allergan (AGN) rose 6.1 percent while Mylan (MYL) fell 14.5 percent.

Fiat Chrysler (FCAU) fell 4.9 percent after a U.S. auto safety watchdog announced a $105 million fine against the automaker over lapses in safety recalls.

On the NYSE, 2.73 stocks fell for every one that rose. On the Nasdaq, decliners outnumbered gainers 2.47 to 1.

The S&P 500 index posted 3 new 52-week highs and 58 lows; the Nasdaq composite saw 21 new highs and 246 lows.

-Tanya Agrawal contributed reporting.

What to watch Tuesday:
  • Standard & Poor's releases the S&P/Case-Shiller home price index for May at 9 a.m. Eastern time.
  • The University of Michigan releases its final survey of consumer sentiment for July at 10 a.m.
Earnings Calendar
These selected companies are scheduled to release quarterly financial results:
  • Aflac (AFL)
  • Ally Financial (ALLY)
  • BP (BP)
  • Corning (GLW)
  • D.R. Horton (DHI)
  • DuPont (DD)
  • Express Scripts (ESRX)
  • Ford Motor Co. (F)
  • Gilead Sciences (GILD)
  • JetBlue Airways (JBLU)
  • Merck & Co. (MRK)
  • Pfizer (PFE)
  • Reynolds American (RAI)
  • Sirius XM Holdings (SIRI)
  • Twitter (TWTR)
  • UBS (UBS)
  • United Parcel Service (UPS)
  • Wyndham Worldwide (WYN)

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chinacommoditiesearningseconomyglobal economyinternational tradeinvestingmarket newsmergers and acquisitionspharmaceuticalsstockswall streetworld marketsReuters2015-07-27T16:50:00+00:00