Economy

NPR

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Tips on what to do if you’re laid off : NPR

January is historically the busiest month for job cuts.

The first month of the year "is when most companies are doing restructures, reorganizations and setting the direction," says Sarah Rodehorst, co-founder of Onwards HR, which helps companies carry out layoffs, adding that tech, health care, banking and finance are likely to see the biggest cuts in 2023.

Already, Goldman Sachs CEO David Solomon has announced widespread layoffs at the investment bank in the first half of January, citing slowing economic activity.

After a year of rising inflation and a series of big interest rate hikes, companies are skittish about the possibility of a looming recession. One in 3 companies expects to lay off 30% or more of their workforce in 2023, according to a December survey of 1,000 business leaders by Resume Builder.

S&P 500 Rises in First Session of 2023 – The New York Times

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S&P 500 Rises in First Session of 2023 – The New York Times

Stocks rose on Tuesday, the first trading day of 2023, after a tumultuous year of high inflation and interest-rate increases upended financial markets.

The S&P 500 rose 0.5 percent in early trading. On this day last year, the S&P 500 hit its record high. Since that peak, the benchmark index fell nearly 20 percent, its worst year since the 2008 financial crisis.

The Federal Reserve’s commitment to fighting high inflation has moved the market over the past year. On Wednesday, the release of the minutes from the Fed’s December meeting, when the central bank shifted to a half-point rate increase after four consecutive three-quarter-point increases, might offer more insight into the path Fed officials are taking to fight inflation. This Friday, the latest monthly data on jobs will be watched for signs that the labor market is slowing down, which would reduce pressure on prices.

Maybe 2022 wasn’t the worst year ever

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Maybe 2022 wasn’t the worst year ever, if you don’t look too hard at your portfolio …

It’s hard not to be a bit discouraged by the news that the stock market closed itself down with the S&P 500 down 19.4% for the year, nearly 1/5th less in value then it was a year ago. It’s the worse year on the stock market since the crash in 2008, and the experts are warning us that we are heading towards a recession and next year might mean another 20% or 30% decline in the market, but maybe then recovering by the end of 2023 where it started. But they were terribly wrong this year, off by 28% by my own estimates. Predicting the stock market, over a few years is a fools game.

Now, I didn’t panic or sell off any stock. I actually took advantage of the lower prices in the market to buy extra, and boost my portfolio whenever I had extra money above and beyond what I would normally do. While the market was down by a 20%, my net worth only dropped about 10% but it still was depressing to look at. I understand the long-term trends — my net worth has gained about 14% a year even after the recent drop, but it just leaves a sour taste in my mouth, even though I know this year was to be expected and part of the growth and decline cycle, that is normal with any investment strategy.

At the same time, this whole year seemed to be one of caution and maybe fear. It was about trying to cut back, in wake of inflation and rising costs all over the map — while trying to dump money into the stock market. I took fewer trips, spent more time closer to home, walking to Five Rivers and other parks within walking distance from home. I stayed away from the gas pumps and grocery stores. If there was something I wanted or hoped to acquire, I pushed it away. I gave up a lot, while to just watch the needle push in the wrong way.

This was the year it was supposed to be different, with the corner office and the mid-level management position and the good salary. I was supposed to have a lot more money coming in that would make everything different, but nothing really changed. I mean in reality, I have more stock and my retirement accounts were maxed out for the year, but my apartment is still as dumpy as it always been, my truck is getting rustier and continuing to decline mechanically. And I was very busy at work at times, which made it hard to get away, especially as remote work isn’t really a thing much anymore, except for the rare cases when it is.

I saw one of those crazies of popular finance who shout on the commercial radio or television — it may have been Dave Ramsey or Jim Cramer — it doesn’t really matter as I don’t follow their scammy stuff — say that having more money doesn’t really change anything. People who have more money or less money and are always broke, will still be always broke. Those people who are jerks are jerks whether or not they are poor. They just have bigger boats or bigger saving and investment accounts. But it doesn’t really change their lives more than superficially, if even that. Money doesn’t have any actual value until it’s transferred to services or property. It’s an imaginary number of sorts. Stocks and bonds have a value when you sell them, but until then that, they just move up and down and spit out and imagery value, a future value only realized if sold and used to buy something else.

But somehow I thought it would be different.

Making more money, would make it easier to save and live a better life. Somehow a different number would change everything, and not that everything would remain the same, or actually decline, due to inflation and market declines. A better income, would make things better, and move me forward, not just keep me treading in the water, with a sinking feeling by asset declines. I thought I would be getting closer to my future, rather then back sliding, so much of this year felt like every time I put more money in the markets with an eye towards future growth — it just seems like tomorrow is sliding away.

Yet, maybe the net worth isn’t the only measurement of the year I should be taking. I grew in other ways, even while my portfolio declined and my truck got older and rustier and my apartment more dilapidated and dirty. I am not winning the war on dust and grime, I’m too much of a dirty hick bring mud indoors. But I can’t discount my experiences and the amount of learning that I took in during this past year. While everything kind of declined around me, I think in many ways I am sharper with the skills and experiences I took in this past year.

I started the year with a free GIS class which sharpened my skills with QGIS. I further honed my skills in RStudio and went on to take a free class in responsive web design and Javascript. Along with other front-end developments. I’ve been learning a lot about computers and coding, and it makes it possible for me to be more efficient at my job and developing content for the blog. I learned a variety of shell applications, picked up more of different computer languages like FORTRAN and LISP. I started using Visual Studio for Coding. I also did a lot of reading and thinking.

While my trips out of town were curbed due to my truck getting old and mechanically more questionable, along with high gas prices and inflation, I did get out and often took longer trips, to maximize the amount of travel I could do while staying in one campsite and leaving my truck parked. I wish I could have done more, but the year was short, weather was often bad, and work was busy. I took full advantage of the free bus out to Thacher Park and regularly hiked out to Five Rivers, the Normans Kill Gorge and other local preserves. It was nice to be able to get out and explore, without burning so much gas, but I also feel like I didn’t get as far away from home this year as years past.

Maybe my focus on the future came at too much of a cost for the year that came and went. But I know despite the depressing economic news of inflation and stock market declines, the growth I made personally and in the number of shares in my portfolio mean that come time, when things turn around, things will be better then they are today.

Not a fan of ESG Investing 👎

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Lately, there has been a growing interest in people investing in various Environmental, Social, and corporate Governance (ESG) funds. They are usually sector funds, that only invest in businesses that have been selected based on their environmental, social, and corporate governance performance or actions. The idea is you invest in things that make the world a better place, rather then a worse place.

ESG funds are heavily marketed. It’s hard to open Facebook without a targeted ad, trying to play on your emotions and feel good about investing in these kind of businesses. But often if you look more then skin deep, they are highly scammy with few environmental and social benefits, despite the marketing hype. Often the products sold by ESG companies are hardly better then sold by those businesses not chosen by the ESG fund marketers.

But a bigger problem is that ESG companies aren’t well diversified compared to most market indexes, and that investing doesn’t actually decide which businesses have good business models and make money. Ultimately, it consumers, not investors that decide if a business is profitable and make sense. By buying an index fund, you end up with both ESG and non-ESG, and will profit when either one makes money. Risk is lower, because you have a wider range of stocks then only the ESG funds.

I am no fan of Buy Now, Pay Later 🎁

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I am no fan of Buy Now, Pay Later 🎁

As they say, we already know what the next recession will look like. Flooding the market with crappy junk people don’t need and can’t afford but are deceived by the easy-payments of Buy Now, Pay Later.  Stuff that people will later on have to pay for get rid later on. Things often with little value, often with most of the value used up shortly after the product is delivered, and before it’s paid off.  Stuff folks can’t afford and won’t be able to pay back. It just makes me sick.

I have never liked consumer credit for any purpose. If you can’t afford it now, then you shouldn’t go out and buy it. Instead, you should save money, put it away until you have the money to buy it. Don’t take advantage of zero percent financing, but instead take advantage of the interest you can get from FDIC-insured savings accounts, especially the higher-interest online accounts. And when you take your time, you can reconsider how essential the purpose really is.

There are a lot of people out there who are legitimately poor. I get it, I grew up that way too. But I also have always rejected credit — if I can’t afford something, I won’t buy it. If there is something I really want, then I will wait until I have enough money saved up to buy it. Time to consider the product more carefully before purchasing. And I have always learned to live with less, even if at times it’s less comfortable.