Friday Financial Five – April 29, 2016
Friday, April 29, 2016
First quarters have not been kind for the economy over the past few years. The first three months of 2016 were bumpy for investment markets and for the country’s economy as a whole from a growth perspective. Gross Domestic Product grew only 0.5%, as business investment and weakened manufacturing provided enough headwinds that growth was down almost one percent from the last quarter of 2015. Consumers are also not spending, as evidenced by an increased savings rate. The Fed identified the slowdown as the reason for a cautious approach at their last meeting and left rates unchanged.
Gender gap for college graduate income
For female college graduates, a study by the Economic Policy Institute says they’re well behind male counterparts in salary from the beginning of their working careers. Men make almost $21 per hour on average out of college, while women make $16.58, a gap that the report contends is widening. Young male graduates earned 8.1 percent more in 2016 than in 2000, while women are earning 6.8 percent less, according to EPI. As a whole, unemployment for young graduates still remains slightly higher than pre-recession numbers, coming in at 5.6 percent.
Commercial real estate showing strength
Real estate was one area that showed strength in the first quarter and commercial real estate has continued an upward trend after disaster struck in 2008 and 2009. Overseas investment has risen sharply each year since then, peaking at $45 billion in 2015. It was also announced last year that The Global Industry Classification Standard Committee will add real estate as an eleventh sector in August, which in turn will impact the S&P and MSCI indices.
GOP still fighting the fiduciary rule
The fight to protect consumers and encourage financial professionals to provide “best interest” financial guidance has become another issue that divides across political lines. Republicans in both the House and Senate are lining up to oppose the recently imposed standard. Various business groups are exploring the possibility of a class action suit against the Department of Labor. President Obama has affirmed that he’ll veto any congressional resolution to void the fiduciary rule.
Prince the latest celebrity estate planning cases study
The news of Prince’s passing was almost immediately coupled with an array of estate planning questions. Prince was single, meaning there’s no spouse to pass along the estate tax-free. If there’s no will produced, beneficiaries will jockey for what’s estimated to be a $300 million estate. There will be a question about how to value royalties generated by his vast amount of music. That includes a library of music never released to the public, allegedly enough to put out an album every year for the next century.
Dan Forbes, a CFP Board Ambassador, is a regular contributor on financial issues. He leads the firm Forbes Financial Planning, Inc in East Greenwich, RI and can be reached at [email protected].
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