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Feature
Tax Law Brings
Much-Needed Relief To Individuals and
Businesses
In May, some much-needed
clarity was brought to some of the uncertainty that was created by
tax reduction legislation passed in 2001 and 2003 when the Tax
Increase Prevention and Reconciliation Act of 2005 was signed. This
legislation extends the reduced 15 percent tax rates on dividends
and long-term capital gains for an additional two years through
2010. It also provides relief from the Alternative Minimum Tax (AMT)
to millions of middle-class Americans, and provides a two-year
extension of the enhanced Section 179 direct expensing for equipment
purchases that was enacted as part of the Jobs and Growth Tax Relief
Reconciliation Act of 2003 (JGTRRA).
Moving toward a pro-growth
tax system
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Financial Market Outlook
Long and Variable Lags
After its latest interest rate hike on June 29, the Federal
Reserve offered the following guidance: "The extent and timing of
any additional firming that may be needed to address these risks
will depend on the evolution of the outlook for both inflation and
economic growth, as implied by incoming information." Expectations
of the economy's performance are compared with the ongoing
data-stream to evaluate how well forecasts are holding up. If growth
or inflation exceeds expectations, then, expectations may be
recalibrated, monetary policy fine-tuned, and the process continues
onward.
U.S. could actually learn something from the
Europeans
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International & Trade
Emerging Markets: Spot the
Difference
Emerging markets are doomed to be known for their vices
rather than their virtues. Years of repaying foreign debt and
balancing the books after the Mexican, Asian and Russian crises of
the 1990s seemed to count for little in May and June, when global
stock markets tumbled and investors dumped the developing world's
shares. It was no routine sell-off. Credit Suisse, a bank, describes
the five-week period between May 8th and June 13th, when emerging
stock markets lost a quarter of their value, as the worst run since
the Russia-related scare eight years ago.
Switching
into assets tied to domestic
markets?
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Business Planning & Strategies
Risk Management: More Talk Than
Action
A new survey of 230
financial executives says companies recognize the importance of
enterprise risk management, but fall short when it comes to
implementation. A majority of executives
-- 58 percent -- reported that their company has an enterprise risk
management approach and philosophy that considers various
interactions among different types of risk. And 68 percent of those
polled said their CEO is placing greater emphasis on the management
of all types of risk.
The struggle to put effective systems in
place
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Legislation
& Regulatory
Privilege Under
Pressure
Attorney-client privilege,
the focus of an American Bar Association task force, has become yet
area experiencing fallout from Sarbanes-Oxley. Stan Keller, a member of the ABA task force on
attorney-client privilege and a partner at law firm Edwards Angels
Palmer & Dodge, says the privilege has found itself under
pressure from auditors, who request information such as legal memos
on corporate transactions or accounting treatment. "In the
post-Sarbanes-Oxley world...auditors are being held accountable as
gatekeepers," acknowledges Keller.
Better protection for auditor-client
communications
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Human
Resources & Benefits
Investment
Preferences are Shifting
Though
participants still face financial risks, new insights into
investment behavior have led to smarter plan designs and smarter
investment options. "The offerings within plans have improved in
terms of both diversification and simplification," says Dominic
Falaschetti, CFA, 401(k) senior consultant at Ibbotson Associates.
The shift in investment thinking comes from the realization by plan
sponsors that, as defined contribution plans have now inarguably
displaced defined benefit plans as the retirement vehicle of the
future, participants need more help than ever.
Chasing a trend and risking a
wipeout?
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Finance & Treasury
Are Large Caps Back in
Style?
Amid rising
interest rates and market volatility, many investment strategists
say it is time to refocus on those core investments:
large-capitalization domestic stock funds. ''We feel very strongly that the
tide has gone out with respect to more-risky asset classes,'' said
Nick Bohnsack, investment strategist at the ISI Group in New York.
''Investors should look toward higher-quality asset classes, and in
our view the most attractive is U.S. large
caps.''
Overthinking the market when
rebalancing your
portfolios
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Personal
Investing
Why Stocks Are
Cheap
Trend-following hedge funds,
just like the old tape-watchers of a generation before, move
markets. Their young traders, sitting in front of screens, were a
large factor earlier this year in driving the surging prices for
copper, coal, oil and other commodities, plus stocks in emerging
markets, where these things are produced. And when the
trend-followers panic, watch out.
International buying opportunities have
arisen
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Economy
Wall Street's
New Mantra
The Federal Reserve took
a leap of faith at its latest policy meeting, faith in its economic
forecast, that is, and both the stock and bond markets leaped with
it. The statement following the central bank's June 29 hike in its
target rate, to 5.25%, for the first time suggested the Fed believes
demand is slowing in a way that will eventually take pressure off
inflation. Such a scenario would suggest, in turn, one more rate
hike at most, and the Fed would finally be out of Wall Street's
hair.
Does
the Fed have it
right?
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Sales
& Marketing
Wal-Mart's RFP
Retailer's 'Dream Team' of Agencies
The hottest piece of summer reading for many ad folks may be
a six-page document that outlines Wal-Mart's quest for an agency
"dream team" to handle
its $570 million account. The retailer's
request for proposals gives a glimpse at the changes sweeping the
giant. It also suggests how far it could go in restocking its
marketing toolbox, ramping up the use of nontraditional media,
in-store marketing, and customer-relationship management and loyalty
programs.
Getting consumers to spend
more
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Trends & Technology
The Internet Knows What You'll Do
Next
A few
weeks ago, Google took a big step toward making the database of
intentions visible to the world -- by creating a product called
Google Trends. It allows you to check the relative popularity of any
search term, to look at how it has changed over the last couple
years and to see the cities where the term is most popular. It's the
connection to marketing that turns the database of intentions from a
curiosity into a real economic phenomenon. When these tools get good
enough, you can see how the business of marketing may start to
change.
A window into what people are actually
doing
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Small
Business
Entrepreneurship; Opportunity
or Risk
Recently while being
interviewed for a small business journal, the interviewer asked if I
thought anyone could own and operate a business. I told him I
believe anyone who has the desire to own a business owes it to
themselves to give it a go. The interviewer interrupted me and said,
"But it takes a certain kind of personality to start and run a
business. Entrepreneurs are big risk takers and anyone who has an
aversion to risk would not make a good entrepreneur." Why would
anyone think entrepreneurs are risk takers?
Seize the opportunity when it
appears
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