5 Reasons Why You Should Care About A Bond Credit Downgrade

Chicago River

Is it really necessary to have a TV at a gas pump?

I’m seeing these more often, and I think that I’m against the concept. Like many Americans, I like to stare off into space while I’m pumping gas- a bit of a mental break. Well, at least gas prices are at historic lows, which is good for consumers- but bad for ExxonMobil. In fact, Standard and Poor’s recently downgraded ExxonMobil’s credit rating from AAA (their highest rating) to AA+, based partly on low oil prices. A bond downgrade can have a huge impact on the value of your bonds, so it’s important to understand these key facts:

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3 Reasons Why Goldman Sachs Wants To Pay You More Interest

Calculator and Money Image

I saw a brand new Mercedes truck that has been customized into an ice cream truck. A real ice cream truck- driving down my street playing music to attract people.

What’s the breakeven on the cost of a Mercedes ice cream truck? Seems that you’d have to sell a ton of ice cream…

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Like the new and (really) different ice cream truck, businesses shift their focus to find new customers. As an example, Goldman Sachs is aggressively going after plain old vanilla (another ice cream reference) customer deposits by paying high rates on checking and savings accounts.

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What A Cold Shower Teaches Us About Financial Planning

DSC_0004

There’s no hot water…..

So, I’m in a shower at the gym and the hot water goes out. The shower is getting colder by the second. Do I switch showers, or just grit my teeth and finish where I am? Tough call (I stayed in the same shower).

This same scenario and be applied to your financial planning- and how that planning can change dramatically over your lifetime. It was struck by this quote from Next Avenue:

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What A Urinal Ad Can Teach Us About Unconstrained Bond Funds

 

Mens Bathroom

It has to be the best urinal ad- ever.

Right above the urinal a movie theater bathroom, in red letters “Flat rate divorce services”. The ad had a nice picture of an office and the attorney’s phone and email address.

Talk about a captive audience- really sort of brilliant. You’re a guy, you’re absolutely going to notice ad, lots of marriages end up divorce…..

Simple.

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Trouble At The Genius Store

Cash Register Close UP

Author’s Note:

Explaining accounting and finance can be pretty dull. That’s a problem, if you need to learn accounting or finance.

On a plane from St. Louis to Seattle, I decided to try and fix the problem. What if I could wrap some accounting concepts inside of a quirky (funny?) short story? My goal here is to present some information, and then add another step in the story. So, when you get to the end, you’ve been reminded of an accounting concept- but you’ve received the information in a light-hearted way.

Anyway, that’s the goal here. Enjoy!

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The guy who convinces older people to back up their computer data is gonna make a fortune. Greg chuckled to himself as he packed up his Macbook at the Apple Store.

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What A Tattoo Can Teach Us About Relationships and Investing

 

Wall Street Two Signs

“I can choose peace, rather than this.”

Pretty powerful, huh? It’s a quote from Wayne Dyer, the spiritual writing and speaker. It’s a good introduction into the topic of couples and personal finances. Sometimes, the process is not peaceful….

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How To Take Charge Of Your Debt: At Any Age

Retired Couple Venice

“Success consists of going from failure to failure without loss of enthusiasm.”

I love this quote with Winston Churchill. It’s one of several quotes I keep on a piece of paper in my wallet. I think the “attitude” of this quote can help anyone who is in debt. A debt problem can be solved- regardless of your age.

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What Presidential Primaries Teach Us About High-Dividend Stocks

Speakers Chamber

The New Hampshire primary results are in. Some candidates have dropped out, and supporters are scrambling to find a winner.

The same thing is true with investors. As of Feb. 11th, the Standard and Poor’s index of 500 stocks is down 10.51% for the year. What about bonds? Well, here are some current yields for various types of bonds:

10-year Treasury Bonds 1.64%

10-year AA Corporate Bond 2.77%

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Stocks are down, yields are low. Like the current political environment, people are running toward an investment that might perform better in these financial conditions: high-dividend stocks.

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How To End Poor Decision Making During Market Volatility

Wall Street Two Signs

No one knows enough to be a pessimist.

I love this line. It’s from Wayne Dyer, the speaker and author who recently passed away. Here’s another one I like:

If you change the way you look at things, the things you look at change.

These two quotes apply to investing decisions in today’s volatile markets. With some calm thinking and clarity about where you, you can avoid making poor decisions that may hurt you down the road.

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4 Ways That Reddit Can Help You Avoid Personal Financial Problems

Man at Table with PC Notepad

This article really made me cringe. “68% of Americans Destroy Their Credit Before Age 30”. Specifically, 68% of Americans make “at least one major financial mistake” about age 30, which results in negative information on their credit rating. If you have financial information and a plan, however, you can avoid these problems- at any age.

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The credit mistake may be overspending on credit cards or missing a payment on a loan. Some more serious issues are defaulting on a loan or having an account sent to collections.

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