This N' That

 The stock market took another correction below 10,000 I think we are in for a up-and-down year in stocks. Over the next five years the market should produce about 12% per year average (5% from dividends and 7% from increases in value). So buy dividend paying stocks. If you want to reduce risk? Look for stocks with PE's (price to earns ratio) of 11 or less, that have historically paid good and steady dividends.

Retail Sales: Look for an up and down, yo-yo year. My sales are up 20% for the first five months. Sales aredown 8% for June. My barometer for sales is not the overall economy, or the competition. I now look at gas prices and the stock market, then I temper that information with human psychology. If Gas prices are over $2.60 a gallon, people do not go shopping for entertainment. They plan their driving trips and shop on line more, and that is good for on line retail sales. If the stock market is in a decline, the people who buy non-essentials, spend less. I sell non essentials, so stock market trends have an effect on my on-line sales. After checking those two barometers, I temper my determination of how sales will be by how long people have been putting off pleasure. For the past two years people have cut back their vacation plans, and that is longer then the 18 months or so that folks will self-sacrifice. So this year is a vacation year, people feel they deserve one, having done without for two summers. Thus retail sales have declined since school got out. That is in keeping with gas prices under $2.60 a gallon, dropping stock prices and the twenty four months since the recession news hit hard in 2008.

My future econmic report is for a soft retail market for the second half of the year (at least on line). Stores will run lots of sales trying to drag the buyers in.

Banking: Banking is a mess, I am not sure the banks know what they are doing. Loans are far and few between and after two years of recession it is hard for most small businesses to qualify for a bank loan. One bank is aggressively looking for businesses' business. BBVA Compass Bank is a part of a large conglomerate but they are trying to act like a local bank. They will pay you to bank with them (up to $1,700) and they have a free business checks plan. It appears that the BBVA bank branch managers actually have some authority. I am sure they will make money off me, but hey, no one else is offering me anything at all to bank with them. I have started the checking them-out process and may well switch.

Real Estate: The banks are still repossessing houses and it will take them two or three years to clear up the mess. Once the bank owns the house the value is down 33% or more. That makes it a buyers market and that is a chance to make money. If you are planning to get rich and you are not buying real estate, shame on you. Real Estate has not been this cheap in fifteen years and interest rates have not been this low in 40 years.

Running a business: Two big trends, one is; green everything, green does motivate buyers. And two; Customers are screaming for someone to treat them as if their business, is important to your business. The consumer wants fair value for their dollar and some respect. Big business has really pissed everyone off and you can capitalize on that. Offer good service, fair prices and personal service and you will make money.