Not exact matches
May 1 (Reuters)- U.S. stock
index futures treaded water on Tuesday, as strong earnings failed to excite investors who instead fretted
about inflation, rising costs and protectionist policies.
In Vermont, where the minimum wage is currently $ 8.60 and has been above the federal level and
indexed to
inflation since 2007, small business owners don't think much
about the annual wage increases anymore, says Betsy Bishop, president of the Vermont Chamber of Commerce.
May 1 (Reuters)- U.S. stock
index futures were down slightly on Tuesday after disappointing results from Pfizer, while investor concerns
about inflation, rising costs and protectionist policies continued.
Their
inflation -
indexed pension income is set at
about 70 % of the retiring wage, including the Canada Pension Plan (CPP).
While the annual contribution limits are set at 18 % of the previous year's earned income, they are capped at
about $ 25,000 a year (although
indexed to
inflation).
This week, Germany's business pages have been full of little warnings
about the Return of
Inflation, the biggest bogeyman in the Teutonic economic lexicon, all because the annual consumer price
index rose to its highest level in over three years in December, a shocking 1.7 %.
An abrupt rise in interest rates, concerns
about rising
inflation, and a potentially more hawkish Federal Reserve have created an equity market tantrum that now has the Dow and S&P 500
Index in full correction territory (a correction is a price decline of between 10 % and 20 %).
Bond
indexes have declined this year, as the growing economy has led the Fed to raise interest rates and investors have grown increasingly concerned
about the potential for accelerating
inflation.
This means that the Fed only has to worry
about inflation the broad
indices like the Dow, SPX and Nasdaq.
The Liberal platform also stated that if a senior's
inflation index turned
about to be lower than the national CPI, the general CPI would compensate seniors, not the seniors CPI.
I agree with the Accumulator's points
about Global
Index linkers but would point out that a Global Equity fund would also give a measure of protection against home - grown
inflation via currency depreciation as well as capital / income growth.
I got in touch with L&G in 2014 to ask them
about the average duration of holdings in the Global
Inflation Linked Bond
Index Fund, they responded that it was 8.20.
Any non-federal employee earning the equivalent of an MP's salary, who wants an equivalent
inflation -
indexed benefit backed by the federal government, would need to buy federal real - return bonds — to the tune of
about 70 per cent of income!
As usual, I don't place too much emphasis on this sort of forecast, but to the extent that I make any comments at all
about the outlook for 2006, the bottom line is this: 1) we can't rule out modest potential for stock appreciation, which would require the maintenance or expansion of already high price / peak earnings multiples; 2) we also should recognize an uncomfortably large potential for market losses, particularly given that the current bull market has now outlived the median and average bull, yet at higher valuations than most bulls have achieved, a flat yield curve with rising interest rate pressures, an extended period of internal divergence as measured by breadth and other market action, and complacency at best and excessive bullishness at worst, as measured by various sentiment indicators; 3) there is a moderate but still not compelling risk of an oncoming recession, which would become more of a factor if we observe a substantial widening of credit spreads and weakness in the ISM Purchasing Managers
Index in the months ahead, and; 4) there remains substantial potential for U.S. dollar weakness coupled with «unexpectedly» persistent
inflation pressures, particularly if we do observe economic weakness.
 (You can't say that
about far too many defined benefit pension plans, and there is no
inflation indexing of other pensions.)
(I'm not talking
about official numbers which are not believable except by the brainwashed; I'm talking
about the real rate of
inflation reported by the Chapwood
index or shadowstats.com.)
That boost is slightly above the Consumer Price
Index, a marker for
inflation, that has been running
about 1.5 percent annually.
Couple this with various features of the plans themselves — for instance, early retirement provisions allowing teachers to retire in their early - to - mid 50s, unrealistic assumptions
about investment returns, and cost - of - living adjustments not tied to any
inflation index such as the Consumer Price Index — and you have a system that carries a hefty price
index such as the Consumer Price
Index — and you have a system that carries a hefty price
Index — and you have a system that carries a hefty price tag.
That seems to be the general feeling among educational technology advocates
about the recent reforms to the federal E-rate program, whether they are applauding a new funding
index for
inflation, the allowance for «dark fiber» connections, or the funding of pilot wireless - learning programs.
The average wage
indexing values for calculating the AIME are available from the Social Security Administration's site, but future
indexing values will also need to be projected based on an assumption
about their
inflation.
The
inflation sensitivity is high for commodities with an
inflation beta near 15 for world production weighted
indices (near 70 % in energy) and closer to 10 for equally weighted
indices with
about 1/3 weighted in energy.
If you are going to be holding an
index ETF for a long time, then you shouldn't be concerned
about its share price at all, since the returns would be pretty abysmal either way, but it should suffice for hedging
inflation.
«Even though CoreLogic's national home price
index got to the same level it was at the prior peak in April of 2006, once you account for
inflation over the ensuing 11.5 years, values are still
about 18 % below where they were.»
Plus it's already set up to be
indexed to
inflation so we won't have to worry
about future whining that the HBP isn't big enough.
That's
about 6.75 % of your initial account value,
indexed to
inflation.
Currently
inflation runs at a rate of
about 1.7 % per year, based on the latest year - over-year increase in the consumer price
index.
While the annual contribution limits are set at 18 % of the previous year's earned income, they are capped at
about $ 25,000 a year (although
indexed to
inflation).
Notes Starting July 10, 2006 covered the following topics: It is
about time..., Time and the Gordon Model, It is
about time... continued, It is
about time... more, The Copie
Index, It is
about time... number six, Compact Variable Terminal Value Rate Calculators, Orders of Magnitude, Using Stock Return Predictions, Eye Opening Calculations with Compact CVTVR L, New Standards for Financial Reporting, A Tip
about my Yahoo Briefcase, Rational Pessimism and Tobin's q, Super Variable Terminal Value Rate SVTVR Calculators, What does «3 % +
inflation» mean?
[1] More information
about these
indices can be found here: S&P / BMV Government CETES Bond
Index, S&P / BMV Government MBONOS 1 - 5 Year Bond
Index, S&P / BMV Government MBONOS 5 - 10 Year Bond
Index, S&P / BMV Government
Inflation - Linked UDIBONOS 1 + Year Bond
Index, S&P / BMV Government International UMS 1 + Year Bond
Index.
For more information
about the
indices following these instruments, please see: S&P / BMV Government CETES Bond
Index, S&P / BMV Government MBONOS 1 - 5 Year Bond
Index, S&P / BMV Government MBONOS 5 - 10 Year Bond
Index, S&P / BMV Government
Inflation - Linked UDIBONOS 1 + Year Bond
Index.
Vanguard.co.uk has good general information
about inflation -
indexed instruments and funds too.
@Chad I voted to close this one, but if it's closed, should I copy my answer to the other one, since none of the current answers talk
about indexes that track
inflation -
indexed bonds, only the bonds themselves.
The update to the question
about «nearing retirement age» makes a well structured ladder of
inflation -
indexed bonds sound like a good fit for someone with a low tolerance for volatility who is willing to sacrifice the possibility of growth in exchange for stability and predictability.
And as this column has pointed out before, retiring in this second decade of the 21st century poses challenges for just
about any healthy person who lacks an
inflation -
indexed employer - sponsored Defined Benefit (DB) pension plan.
«If the Fed can maintain a low but positive rate of
inflation, within a narrow band of
about 1.5 percent of the Consumer Price
Index, as it's been doing,
inflation will be a non-issue in economic decisions in 2005,» says Doug Duncan, chief economist at the Mortgage Bankers Association.