Gas Prices Edge Up as Summer Driving Season Begins

Memorial Day Travel Expected To Increase Due To Drop In Gas Prices

The average price of a gallon of regular-grade gasoline rose 4 cents from two weeks ago to $2.84 a gallon, which was the highest since Nov. 21, the Lundberg survey released Sunday showed.

The average price a gallon in the week ended May 29 was about 85 cents lower than a year ago.

Rising crude prices, refinery maintenance and other factors that caused the recent spike in gasoline prices have subsided, said Trilby Lundberg, publisher of the survey.

“Prices have peaked or will likely peak,” she said.

Refinery capacity was about 93.6 percent in the latest week, 3 percentage points higher than a year earlier, she added.

Nationally, among the panel of U.S. cities included in the survey, the cheapest gasoline was found in Tulsa, Oklahoma, at $2.36 a gallon, while Los Angeles had the most expensive at $3.83.

What to Buy in June

Young People Spinning in the gym

 

If you’re thinking about what to buy in June, take comfort in knowing that the warm weather, wedding season and hurricane season all bring discounts this month. You’ll find sales on things like gym memberships as well as continuing specials on some items that were worth buying in May. Early summer also begins the prime fruit and vegetable season, with affordable prices on grill-worthy corn on the cob.

Tropical Vacation. June signals the onset of hurricane season and sweltering temperatures in the Caribbean. If you’re willing to take your chances with the weather, this is the perfect time to scoop up deals on cruises and tropical vacation packages. And given the various cruise catastrophes in recent years, cruise companies are trying extra hard to get you back on board with even lower prices. Check out our cheap cruises guide for a fun June getaway.

Gym Membership. As the temperatures climb and people move their workouts from inside to outside, June sales will surface at gyms and health clubs that are running hard to sign up new members. If you enjoy haggling you should be able to negotiate a larger than normal discount on a gym membership.

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Lingerie. Victoria’s Secret’s famed semi-annual sale kicks off this month, making June the moment to score cheap lingerie from the lingerie giant — and from its competitors. A few new pieces may compliment your newly toned body acquired with the cheap gym membership you also just landed.

Dishes and Cookware. May brought deep discounts on cookware, between Mother’s Day and the dawn of wedding season, and many of those deals will continue through June. Prices on dishware also start dropping as wedding season gains momentum. Dishes and cookware make practical graduation gifts for all those young adults moving out on their own.

Tools and Paint. The absolute best tool deals are typically found in October or November, but if you’re shopping for Father’s Day and tools are on dad’s list, look for a few bargains this month. DIY projects often call for a coat of paint, and discounts pop up along with the summer heat. Do some comparison shopping at the home improvement chains first to be sure you’re getting the best price.

Laptops. Whether you want to believe it or not (it’s only June!), back to school is right around the corner and already in retailers’ sights. This is the kickoff month for bundle deals on laptops. That said, avoid the temptation now and wait until July or August to splurge, as the offers will only get better as the official start of the school year approaches.

Movie Passes. Beat the heat and enjoy a movie for less this month. June signals the beginning of summer and the onslaught of blockbusters. With big budgets and an audience with extra time on its hands, you’re likely to find movie ticket discounts, free preview passes, and even some freebies when buying a ticket.

Foods in Season. June marks the dawn of the fresh fruit and vegetable boom, and is an ideal time to get in the habit of buying local produce. (Be sure to visit your local farmer’s market.) At the start of peak season, the fruits to buy (depending where you live) include melons (watermelon and cantaloupe); berries (blueberries, blackberries, raspberries, and strawberries); and stone fruits (apricots, peaches, and nectarines). Kick off the grilling season with sales on the first crop of sweet corn, summer squash, green beans, and tomatoes, plus lettuce and cucumber for salads.

Food Holidays. This buying guide would not be complete without mentioning one major holiday in June: National Doughnut Day, which falls on June 5 this year. Be on the lookout for free glazed goodness from places like Tim Hortons, Krispy Kreme, and Dunkin’ Donuts.

Grills: Don’t Bother. As noted in the May roundup of what to buy, hold off on a new grill or patio furniture until after July 4, when summer season begins winding down and retailers turn their focus to fall items and slash prices on summer goods.

The Discount Is Dead, and What Retailers Are Doing Instead

beauty woman with shopping bags ...

For more than a year, retailers’ play-calling has centered on deluging shoppers with discounts and other money-saving bargains-a tactic that resulted in a sea of sameness from one brand to another.

While it’s true that deals are still prevalent, with retailers like Bloomingdale’s and J.C. Penney (JCP) ramping up their promotions at the end of the month, several companies are tapping into more unique tactics to lure shoppers.

Whether it’s a short-term strategy such as better-targeted emails, or a long-term bet on delivering better customer service to shoppers, below are four ways retailers are adjusting their game plans to be less focused on price slashing.

1. Making Retail More Than Just Shopping

Shoppers — millennials, in particular — have become more interested in collecting experiences than spending money on physical goods, said Virginia Morris, vice president of global consumer and innovation strategy at Daymon Worldwide. As a result, smart retailers have recognized that creating a sensory experience in their stores can help create buzz by engaging consumers, and encouraging them to spread that experience across social media.

She pointed to a recent campaign by The North Face as an example. Last month, the outdoor apparel retailer launched a virtual reality initiative at its Chicago store, through which shoppers are virtually placed in Yosemite National Park and Moab, Utah, via 360-degree 3-D audio and video. The technology is expanding. “It’s all about that thrill-seeking, man-over-nature kind of approach,” Morris said. “For a lot of these brands yes, lots of eyeballs are great, but what I want as a brand is I want a connection.”

2. Getting Customers Into the Stores — Now!

It can be tough to get shoppers to part with their hard-earned cash when they know the dress they’re eyeing will still be there next week — and there’s a good chance it’ll be on sale. In fact, one differentiator that’s helped make fast-fashion names including Forever 21 so successful is that it stocks a wide variety of merchandise but in a more limited quantity. Therefore, if consumers don’t snatch up an item they want quickly, they know it could be gone the next time they visit the store.

Target tapped into this buy-it-now mentality with its recent Lilly Pulitzer for Target collection, which had shoppers lined up around the block ahead of the limited-edition collection’s launch. Although the retailer received some backlash from consumers, who were upset that the items were nearly sold out the first morning, analysts said the collection’s popularity showed that Target is starting to get its mojo back. “Bottom line, we believe the buzz is more likely positive than negative to revitalize Target’s fashionable, signature category brand image,” Cowen & Co. analyst Oliver Chen wrote in a note to investors following the launch.

3. Focusing on the Product, Not the Price

It’s easy to get sucked into the habit of promoting your brand on price, not product. Although the number of email promotions traditionally ticks lower following the holiday push, the first quarter saw a 12 percent year-over-year increase in the number of email campaigns with offers for more than 50 percent off in the subject, according to Experian Marketing Services. Experian’s Spencer Kollas said that new deliverability standards are rewarding brands for sending more relevant messages.​

Specialty apparel retailer Express is one company that’s shifted away from messages focused solely on discounts. Instead, its recent email blasts focus on new arrivals, the latest trends, and how to wear them. Liz Crystal, chief marketing officer at Express, said the retailer is also better segmenting its messages to highlight specific categories or products that shoppers are interested in. The changes are part of a company-wide campaign that started in 2015. “As a brand we are focused on being a fashion authority and communicating fashion trends and categories that are relevant to our customers,” Crystal said.

4. Playing the Long Game

Several retailers are taking a longer-term approach to improving the store experience. Earlier this year, Walmart announced that it would raise its hourly pay for 500,000 employees to $9. In following months, TJ Maxx parent company TJX Cos. (TJX) and Target (TGT) followed suit.

While the raises will weigh on the retailers’ cost structures, analysts viewed the moves as an investment in their workforce-and therefore, an investment in their stores. That’s because boosting employee pay encourages sales associates to stick with the retailer longer, thereby lowering turnover costs and resulting in a better-trained workforce. “A happy workforce helps build the brand,” Morris said.

Hibernating Consumers Cast Pall on U.S. Economic Growth

 

AUCKLAND - SEP 2014:Man hand out credit card.Credit cards are the most profitable sector of the American banking industry, with

WASHINGTON — U.S. consumer spending unexpectedly stalled in April as households cut back on purchases of automobiles and continued to boost savings, suggesting the economy was struggling to gain momentum early in the second quarter.

But there are signs a rebound from the first-quarter’s slump is under way, with other reports on Monday showing manufacturing activity picked up in May for the first time in seven months and construction spending surged in April to a near 6½-year high.

The construction and manufacturing data cast a bit of sunshine on an otherwise cloudy day for economic data.

Still, soft consumer spending and muted inflation pressures, after a price index for consumer spending in April recorded its smallest gain since late 2009 on an annual basis, suggest the Federal Reserve probably won’t raise interest rates before the end of the year.

“The construction and manufacturing data cast a bit of sunshine on an otherwise cloudy day for economic data. We need to see more of a rebound in growth before the Fed pulls the trigger on interest rates,” said Diane Swonk, chief economist at Mesirow Financial in Chicago.

The Commerce Department said April’s flat reading in consumer spending followed a 0.5 percent increase in March.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was also curbed by weak demand for utilities as temperatures warmed up. It had been forecast rising 0.2 percent.

In a separate report, the Institute for Supply Management said its national factory activity index rose to 52.8 last month from 51.5 in April.

The index had been declining since November as manufacturing battled a strong dollar and deep spending cuts in the energy sector in response to a plunge in crude oil prices. A reading above 50 indicates expansion in the manufacturing sector, which accounts for about 12 percent of the U.S. economy.

The index, which was also restrained by labor disruptions at the West Coast ports, was last month boosted by a surge in new orders and factory employment.

Fourteen out of 18 industries reported growth last month, including electrical equipment, appliances and components; primary metals, machinery and transportation equipment.

Another survey from financial data firm Markit showed factory activity improved toward the end of May.

“After transitory weakness in the first quarter, the manufacturing outlook has improved. But the dollar and lower oil prices continue to be a drag on some select industries,” said John Silvia, chief economist at Wells Fargo Securities in Charlotte, North Carolina.

The dollar firmed against a basket of currencies, while prices for U.S. government debt fell. U.S. stocks were modestly higher.

Sturdy Construction

Gross domestic product contracted at a 0.7 percent annual rate in the first three months of the year.

But given that a confluence of temporary factors conspired to depress the output figure, including a problem with the model the government uses to smooth seasonal fluctuations, the decline in GDP likely overstates the economy’s weakness.

In a second report the Commerce Department said construction spending jumped 2.2 percent to an annual rate of $1 trillion, the highest level since November 2008. The percent increase was the largest since May 2012 and reflected broad gains in both private and public outlays.

Forecasting firm Macroeconomic Advisers raised its second-quarter GDP growth estimate by four-tenths of a percentage point to a 2 percent rate on the construction report.

Morgan Stanley (MS) lifted its estimate to a 2.1 percent rate from a 1.6 percent pace, while Goldman Sachs (GS) bumped up its estimate by 0.1 percentage point to a 2.5 percent rate.

The manufacturing and construction reports added to business spending plans, employment and housing data in suggesting some momentum in the economy even as consumer spending and industrial production have been soft.

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The weakness in consumer spending is puzzling given that wages are rising and households accumulated hefty savings from cheaper gasoline.

“Most likely, Americans are using their pump price savings to pay down debt, increase the money they put aside and for dining out,” said Chris Christopher, an economist at IHS Global Insight in Lexington, Massachusetts.

In April, personal income rose a solid 0.4 percent and the saving rate increased to 5.6 percent from 5.2 percent in March.

With consumption soft, inflation pushed further below the Fed’s 2 percent target.

The personal consumption expenditures price index edged up 0.1 percent in the 12 months to April, the smallest gain since October 2009, after rising 0.3 percent in March.

Excluding food and energy, the core PCE price index increased 1.2 percent from a year ago after being up 1.3 percent in March.

The PCE price indices are the Fed’s preferred inflation measures. The soft readings are in sharp contrast with April’s consumer price index report published in May, which showed a pick-up in inflation over the last couple of months.

The differences reflect medical care prices, which are treated differently in both reports.

11 Ways to Nail Savings on Your Remodeling Project

 
Cooking up a major kitchen remodeling, but hoping to get it for a price far below the project’s national average of $56,768? Or maybe a wood deck would do you, but its $10,048 average price doesn’t square with your budget.Almost six in 10 homeowners plan to spend money on home improvement projects this year, according to a Harris poll conducted for SunTrust Bank, but fewer than one in five plan to spend more than $10,000.

1. Pause for a Moment

Remodel magazine says the 2015 average home project will cost $43,800 but return only 62.2 percent of your investment if you sell your home. You might want to consider whether going forward with a project is even worth it. (Here are some we think are probably not.) If you do move ahead, use these creative tips to bring that price down to earth.

2. Save on Materials

  • Recycle and reuse building materials. Habitat for Humanity’s 850 ReStoressell new and gently used furniture, home accessories, building materials and appliances at fractions of retail prices. Donations to locally operated ReStores are sold to the public, and proceeds go toward building homes, rather than trying to fit donated items into homes that volunteers build. You can find anything from prehung doors to acrylic skylights to partial insulation bundles.
  • Find free or cheap materials online through sites like eBay, Craigslist andFreecycle or in person at flea markets or building-supply auctions operated by state and federal governments.
  • Look for ways to repurpose materials. Actress Amanda Pays (“The Flash”) recently told Remodelista she loves the look of old wood, but reclaimed timber has gotten expensive and overused. Her builder, though, was happy to sell her and actor-husband Corbin Bernsen scaffolding boards for $10 a plank, she said. “They’re all over our house,” Pays said. “We even used them as stair treads.”
  • Ask your contractor for odds-and-ends left over from other jobs. “What we do is take 50 percent off the materials from the previous client, and we offer them to the next client,” says contractor Butch McKeon. “We always have extra materials left over.”

3. Look for Deals on Pivotal Pieces

Keep an eye out for specials on big-ticket items that you need, things like countertops, kitchen island installation, or new windows. Once you buy the deal, plan the rest of your remodel around it.

4. Stick With Standard Sizes

Semicustom pieces can cost twice the price of stock pieces, which already run $8,000 to $10,000 for a typically sized kitchen, says Houselogic.com. Custom is even more. You’ll sacrifice some options in size, color, finish and accents, such as crown molding, to get the less expensive stock cabinets.

5. Consider Good Imitations

Lowe’s recently advertised laminate wood planks strongly resembling hardwood floors at $1.89 per square foot, about half the price of real deal, prefinished oak, at $3.59.

6. Maximize Space Before You Enlarge It

For example, in the kitchen, replacing cabinet shelves with pullout draws and racks would cost $35,000, but that’s less than a $48,000 to $95,000 kitchen blowout, says This Old House.

7. Don’t Move Plumbing

Relocating a toilet just three feet, for example, can cost you up to $1,000, says This Old House; relocating the kitchen sink, up to $2,000.

8. Plan What You’ll Spend — and Then Some

Make a budget, but build in 10 to 20 percent margin of error for whatever may go wrong.

9. Use Elbow Grease to Save on Labor Costs

What can you do yourself? Sometimes projects are best left to professionals. But interior painting and trim work can cost a small fortune, warns HomeAdditionPlus.com. If you can handle basic tools such as a paint brush, ladder, miter saw and a coping saw, you can save a bundle on labor. If you can’t, consider volunteering at Habitat for Humanity or other groups that would give you free lessons while you help a good cause.

If you do hire a contractor, ask about doing your own demolition or cleanup. Also ask if you can order supplies yourself. Contractors who order on their own often add markups for themselves on the materials they order for your job. You can also save if you can pick up materials and haul away job waste yourself.

10. Time Your Project

You’ll often pay a contractor more in summer, their busy season, than in winter months, when work usually slows and they may discount their services.

11. Save on Stress and Cost With a Schedule

However, as you craft your spending plan, build in up to a 20 percent cushion to cover nasty surprises. Sticking to a timetable may also help avoid cost overruns by eliminating inefficient use of any labor you may hire or having subcontractors show up to perform work that’s not ready for them to tackle.

For additional tips for stretch your remodeling dollars, such as remodeling slowly, using solar tubes instead of skylights and more, read on here.

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Are Home Warranties Worth the Money?

 

If you’ve bought a home recently, you may have purchased or received a home warranty.

However, consumers frequently expect more from these plans than they deliver.

Home warranties aren’t insurance policies. They’re service contracts. Like a service contract that covers repairs to your computer, a home warranty is a company’s agreement to pay for fixing — and, if necessary, replacing — specified home components.

A home insurance policy, in comparison, covers losses if your home and its contents are damaged or lost to theft, fire or other causes.

A basic home warranty costs about $350 to $500 a year or more. It typically covers kitchen appliances, plumbing, water heater, furnace, sump pump, whirlpool tub, and ceiling and exhaust fans, Angie’s List says.

“Enhanced” plans, purchased for another $100 to $300, provide added coverage for such things as a washer and dryer, air conditioning, refrigerator and garage door opener. Optional items can be added, including pools and septic systems.

You May Be Covered Already

If someone gives you a home warranty, accept it — at least while it’s free. But understand that, even with someone else paying the premiums, you’ll likely pay a service fee (typically $50 or $75) each time you need a repair, according to Angie’s List.

Before buying a home warranty, learn what coverage you may already have. For example, if you’re buying a newly built home:

The home appliances and systems typically have one-year warranties.
Most states require builders to warranty the home’s structural elements for up to 10 years.

Also, when you buy new furnishings and appliances, use a credit card that extends the product’s warranty. That can add as much as an extra year of protection.

Is a Home Warranty Right for You?

Sellers may offer a year’s coverage as an incentive to home shoppers. Owners of new homes frequently pay the premiums after their free year expires.

Real estate agents sometimes give home warranties to clients as a thank you gift for purchasing a home. Some buyers of older homes find that a warranty gives them confidence.

Other homeowners decide they’re better off setting aside savings to cover home repairs and replacements.

One way to think about your needs: Compare the age of each covered item with its average life span. To do so, use this chart from the National Association of Certified Home Inspectors.

With expensive components near or past their life expectancy, a home warranty might be a good idea. Components that have pre-existing problems, however, typically are excluded from protection.

Pros

Buyers who purchase a previously owned home inherit used appliances and home systems with wear and tear. A home warranty can help cover the cost if things break down.

New Jersey real estate agent Lorraine Labonne-Storch told HSH.com that a few days after closing on a home she purchased, the boiler caught fire. It cost her $12,000 to replace.

A home warranty would have covered a portion of the cost, she said. She’d had the option to purchase a warranty when she bought the house, but declined it.

Cons

Home warranties top the list of complaints received by Angie’s List. One reason, Angie’s List says, is the difference between customers’ expectations and what the plans actually deliver. Homeowners also complain about the quality of service from warranty companies.

Before buying a home warranty, read the contract and understand exactly what it does and doesn’t cover. For example, some contracts won’t provide coverage if:

  • You didn’t maintain the appliance.
  • The appliance was installed incorrectly.
  • The appliance had too much wear and tear.

If you haven’t read carefully, be prepared for surprises. Don’t assume:

  • Your policy will replace a faulty component. The warranty company may insist on repairing it instead.
  • You can call your favorite service provider. Home warranties usually require you to use a contracted servicer.
  • The warranty will cover the entire cost. Although she would have been happy to have it, Labonne-Storch said the home warranty she declined would have paid only up to $1,600 to repair or replace the $12,000 boiler.

Find out what’s covered, and what the warranty provides. There may be exclusions and limitations. Perhaps the refrigerator is covered, but the ice maker is excluded. Claims may be rejected because of pre-existing problems or insufficient maintenance.

Learn who will perform the repair work. Also, find out if you can cancel the policy. Most contracts allow a 30-day “free look” that allows a buyer to cancel within 30 days and get a full refund, says the Service Contract Industry Council.

Vet the Company

Research a company using these sources:

  • Better Business Bureau. Type in your city’s name. On the next page type the company’s name. Or type “home warranty.” You’ll see if a company is BBB accredited. That means a company agrees to resolve complaints with the BBB and pays an accreditation fee of anywhere from $400 to several thousand dollars. See company ratings, if any, and a summary of complaints to the BBB.
  • Your state attorney general’s office. Find yours from the National Association of Attorneys General.
  • Your state insurance commissioner. Locate yours with this National Association of Insurance Commissioners map. Although home warranties aren’t insurance policies, 32 states require companies offering warranties to register or be licensed by the state’s department of insurance.

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Week’s Winners and Losers: PacSun’s Flag Fumble, GoPro Grows

A Chipotle Mexican Grill Restaurant head Of Earnings Figures
There were plenty of winners and losers this week, with a struggling mall retailer rolling out a controversial T-shirt and the top dog in wearable cameras eyeing growth in the drone and virtual reality markets.

Chipotle Mexican Grill (CMG) — Winner

The country’s cult fave burrito roller moved higher after a timely analyst upgrade. Miller Tabak analyst Stephen Anderson is upgrading the stock to “buy” and lifting his price target on the shares from $715 to $725.

Anderson is encouraged by Chipotle’s growth prospects, expecting earnings growth to average at least 25 percent in the near term. He’s also excited that Chipotle is expanding its ShopHouse concept into Chicago as a springboard to more aggressive growth for its Asian fast-casual chain.

Pacific Sunwear (PSUN) — Loser

Surf-and-turf retailer Pacific Sunwear got into some hot water over Memorial Day weekend for selling a shirt featuring an upside-down American flag. Social media can be a viral beast when something deemed unpatriotic is on display, and PacSun quickly pulled the the shirt from its stores and its website.

An upside-down flag is a symbol of distress, and it’s even part of the logo of the popular “House of Cards” series. However, it’s also interpreted by many as a show of disrespect, and when that controversy heats up during Memorial Day weekend, the court of public opinion will side with those who are offended.

GoPro (GPRO) — Winner

The fast-growing maker of wearable cameras is broadening its reach. GoPro announced that it’s diving into the drone and virtual reality markets. It expects to hit the market with a virtual reality camera ahead of this year’s holiday shopping season, and its evolutionary push into drones will take place early next year.

Most high-end drones are already being retrofitted to hold GoPro’s HERO cameras, so it only makes sense for the company to enter the market on its own.

Tilly’s (TLYS) — Loser

PacSun wasn’t the only West Coast-themed athletic apparel retailer to stumble. Tilly’s took a hit after posting uninspiring quarterly results. The real dagger in the report is its near-term outlook, as Tilly’s sees a profit of 1 to 5 cents a share on flat comparable-store sales growth. Analysts were holding out for earnings of 8 cents a share on healthier top-line growth.

SeaWorld Entertainment (SEAS) — Winner

The struggling theme park operator made waves by announcing not one but two new coaster attractions for its Florida theme parks. SeaWorld held a media event Wednesday at SeaWorld Orlando to introduce Mako, Orlando’s tallest and fastest coaster. A day later it unveiled plans for Cobra’s Curse, a family-friendly spinning coaster, at its Busch Gardens Tampa park.

Both rides will open next year. With SeaWorld coming under fire for its killer whale and dolphin shows, emphasizing magnetic rides and attractions is a great way to woo guests and reduce its reliance on controversial live marine-life shows.

Motley Fool contributor Rick Munarriz owns shares of SeaWorld Entertainment. The Motley Fool recommends and owns shares of Chipotle Mexican Grill and GoPro. Try any of our Foolish newsletter services free for 30 days. Looking for a winner for your portfolio? Check out The Motley Fool’s one great stock to buy for 2015 and beyond.

3 Ways to Diversify Your Portfolio With Gold

Gold ingots
Gold is considered to be the world’s first currency. The yellow metal was melted into gold coins created by King Croesus of Lydia around 550 B.C. and circulated in many economies well before the creation of paper money. Today, Western investors view gold as an alternative asset, a commodity, a quasi-currency, a portfolio diversifier and an inflation hedge. So-called “gold bugs” invest in the metal to protect against global gloom-and-doom scenarios. But average investors might want to diversity into gold as well, experts say.

Investment demand for gold rose 4 percent to 279 tons in the first quarter of 2015, according to the World Gold Council. The metal is currently trading around $1,208 an ounce, a 2.1 percent gain since the start of the year, but down from its 52-week high of $1,338.70. Here are three reasons you might consider adding some of the yellow stuff to your portfolio.

Portfolio diversifier. The goal of any balanced portfolio is diversification, and gold can play a part, experts say. “You want a portfolio of noncorrelated assets, and the statistical correlation between gold and stocks is virtually zero,” says Jeff Christian, managing director at New York-based CPM Group, a commodities research consulting firm.

An allocation to gold has been shown to protect and enhance returns while reducing volatility.

Returns aren’t too shabby, either. From 2001 through 2014, the annualized return for holding gold bullion was just over 12 percent, according to Peter A. Grant, chief market analyst at USAGold, a Denver-based coin and bullion investment firm.

“An allocation to gold has been shown to protect and enhance returns while reducing volatility,” Grant says.

Safe haven. Gold has traditionally been viewed as a safe investment that climbs in value during times of geopolitical crisis or political instability. “A lot of people who invest in gold look at it as insurance in your portfolio against catastrophic financial market failure, severe economic problems or war,” Christian says.

For example, one of the factors that helped propel gold to its all-time high in 2011 above $1,900 an ounce was news that Standard & Poor’s downgraded U.S. government debt for the first time. The downgrade occurred after a debt ceiling battle in Congress that took the U.S. to the brink of default.

“Gold is first and foremost money. Money that cannot be printed or debased. It therefore insulates its owner from the negative outcomes historically associated with fiat [paper] currencies,” Grant says.

Inflation hedge. Gold is considered a classic inflation hedge because its price tends to rise during inflationary periods, and it tends to rise as consumer prices increase. “As one’s cost of living increases, so too does the value of one’s gold holdings, thereby protecting purchasing power,” Grant says. “With interest rates remaining near zero and monetary bases continuing to expand in many quarters, a return of inflation is a definite possibility.”

For the average U.S. investor looking to buy gold at today’s prices, one ounce costs about $1,200. Gold has been vulnerable to price swings, however, including a sharp sell-off in 2013, so some experts suggest limiting it to a small portion of your portfolio. Here are several ways investors can diversify with gold, including buying coins, investing in gold mining companies or investing in exchange-traded funds that are backed by physical gold.

Gold coins. Christian suggests retail investors allocate between 2 percent and 10 percent of their portfolio to gold. “For the average small investor, the best way is through gold coins: Maple Leafs and American Eagles. There is something nice about having a gold coin in your sock drawer or safe,” Christian notes. Storage is certainly a consideration for investors buying physical gold, and many gold investors use safe-deposit boxes or home safes, Grant notes.

One of the downsides of holding outright physical gold is that there is no interest rate or cash flow attached to owning gold bullion, and the investor is reliant on metal price increases for profit.

ETFs. Another way investors can gain exposure to gold is through ETFs, which hold baskets of securities and trade like stocks. “For a long period of time, people only had the choice of a pair of earrings or a gold bar buried in hole in the backyard, but ETFs democratized access to gold,” says Ben Johnson, global director of ETF research at Morningstar (MORN), a Chicago-based independent investment research firm.

With ETFs, investors can buy as little as a single share, and they’re also cost-efficient, charging relatively low annual expenses, Johnson says. The two largest gold ETFs are SPDR Gold Trust ETF (GLD) and iShares Gold Trust ETF (IAU), which are physically backed gold ETFs. “Our favorite is the iShares gold [fund] because it is cheaper to own,” Johnson says. In terms of annual expenses, iShares compares favorably at 0.25 percent a year versus 0.40 percent for the SPDR fund.

Gold stocks. Buying shares of companies that mine for gold is another alternative. These stocks can represent exposure to gold, but in recent years gold mining stocks as a group have underperformed gold’s actual returns due to company-specific operational issues, which include projects failing to deliver as expected or even open, notes Kristoffer Inton, equity analyst at Morningstar. For investors looking for a pure gold play, bullion or ETFs could be a better choice, as company risks and operational costs can cause a divergence between the price of the underlying metal and the gold mining share price.

Gold stocks Morningstar rates as four stars, which is considered slightly undervalued, include:

  • Eldorado Gold (EGO). This is a low-cost gold producer, currently working on opening Skouries, a major mine in Greece, Inton says.
  • Yamana Gold (AUY). Yamana has a portfolio of mines throughout Central America, South America and Canada. “Recent mine openings have been disappointing, but we think the project pipeline is still healthy and should provide meaningful low-cost production growth. In addition, the company is exploring strategic alternatives for its underperforming mines,” Inton says.
  • Barrick Gold (ABX). This is the biggest gold miner in the world by production and is anchored by five large mines that generate roughly 60 percent of production at low costs, Inton says.

US Jobless Claims Up, But Still Point to Labor Market Strength

Close-up of newspaper page seen through magnifying glass

By Lucia Mutikani

The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, but remained at levels consistent with a strengthening labor market.

Initial claims for state unemployment benefits rose 7,000 to a seasonally adjusted 282,000 for the week ended May 23, the Labor Department said on Thursday.

Claims for the prior week were revised to show 1,000 more applications received than previously reported.

The dollar fell against a basket of currencies, while prices for U.S. Treasury debt rose slightly.

Despite last week’s increase, claims stayed below 300,000, a threshold associated with a firming jobs market, for a 12th straight week, an unusually long stretch given a sluggish economic backdrop.

Outside the energy sector, which has suffered thousands of job losses because of a sharp decline in crude oil prices, layoffs remain subdued even as economic growth is struggling to rebound strongly after slumping at the start of the year.

April data on retail sales and industrial production suggest the economy was growing modestly early in the second quarter, but upbeat reports on housing, consumer confidence and business spending plans hinted at some acceleration as some drags on growth either fade or ease.

Economists polled by Reuters had forecast claims slipping to 270,000 last week. A Labor Department analyst said there was nothing unusual in the state-level data.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, increased 5,000 last week to 271,500.

Thursday’s claims report showed the number of people still receiving benefits after an initial week of aid rose 11,000 to 2.22 million in the week ended May 16. The so-called continuing claims covered the period during which the government surveyed households for May’s unemployment rate.

The four-week moving average of continuing claims declined 70,250 between the April and May survey periods, suggesting a dip in the jobless rate from a near seven-year low of 5.4 percent last month.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

6 Ways to Make Extra Money Using Social Media

 

BRBW7X child taking photo of man with laptop. Image shot 2010. Exact date unknown.  Camera; Counter; Father; Kitchen; Laptop; So

It’s safe to assume that if you’re not making money on social media, you’re probably just casually wasting time on it. Flip that script. Make your profiles pull in a profit with these seven tips to on how to squeeze the juice from your tweets, posts, pics, and more.

1. Join the Sharing Economy

My friends are probably tired of hearing about all the ways I add extra cash to my savings account by participating in the sharing economy — a recently coined term that denotes a person sharing something he or she possesses with someone else who’s willing to pay for it — but I harp on it for a reason. In many cases, this is easy money — and I want them to get in on the action. Examples of commodities in the sharing economy including housing, dog walking/sitting services, personal property (like bikes and tools), cars and more.

I rent my homes to travelers via Airbnb and other micro-subletting sites; I list my dog-sitting services on DogVacay; and people can rent my bicycles by visitingSpinlister. All of these side hustles earn cheddar on items I already have or low-level services I have to offer, and I think it’s brilliant. There are many more ways to participate, so do some research of your own to find out how the sharing economy can fit into your life. There’s a certain time commitment attached to some of these revenue avenues, but if you have some to spare, you should be turning a profit. Time is money, after all.

2. Pursue Blogging Opportunities at Outlets That Pay

Have something to say? There are blogs for just about every topic you can imagine — and some of them pay. Take my success as a personal finance blogger, for example.

Just a few years ago I was a journalist primarily covering LGBT lifestyle topics and writing essays for mainstream publications like the Baltimore Sun and Examiner newspapers. I’m naturally someone who “lives my best life on a budget,” and I had a money-saving topic about which I wanted to write. Wise Bread accepted my article pitch, which was initially a one-off engagement four years ago, but subsequently asked for more. After writing for Wise Bread for a year or so, other personal finance sites started to notice my work and offering me gigs. It just snowballed from there. Today, I have hundreds of published personal finance posts.

It’s possible for you to fall into a great gig like this too, considering that you have fresh ideas written from a new perspective. Research the blogs in which you have the most interest and start making pitches. You’ve gotta start somewhere, and this is square one. Social media angle? Publishers love to work with writers who have big social media followings.

3. Follow and Use the Apps of Your Favorite Brands

Depending on how you look at “making money,” you may want to download the apps and follow the social media pages of your favorite brands, some of which have opportunities to win prizes or earn swag when you become a brand ambassador. In that case, receiving free product from a brand on which you typically spend money is like keeping more of your own in your pocket. In addition, many popular businesses — especially the “fun” brands — offer cash for referrals, and that’s as easy as sharing on social media the affiliate link generated for you by the company.

​4. Publish Sponsored Tweets or Posts

It’s always paid to be popular — you remember high school, don’t you? But these days you can turn popularity into actual dollars if you’re one of the cool kids on social media. “Even if you have a small audience, you can literally sign up forSponsored Tweets right now, select the topics you’d normally talk about, and wait to be matched with advertisers for campaigns,” adds Sakita Holley, founder of House of Success, a lifestyle brand-relation firm in New York. “Or, you can work with various social media influencer/advertiser agencies that have appeared over the last few years to help you sell your influence online. You could also pitch prospective advertisers directly by cold calling, emailing, or connecting over social media.”

5. Create How-to Content on YouTube

I’m a big fan of how-to videos on YouTube, especially when they help me learn a skill for free that I would otherwise pay for. A friend of mine recently fixed his dishwasher using a YouTube how-to, and I was quite impressed. While these videos are free for users, however, you can make money based on the viewers it brings in, according to Jason Parks, owner of The Media Captain, a social marketing agency in Columbus, Ohio.

“Creating ‘how-to’ content on a niche topic can earn you money on social media,” he says. “I worked with a tennis pro who created a simple YouTube video, ‘How to Hit a Faster Tennis Serve.’ We monetized the video (which now has over 150,000 views), and he gets money based on the overall view count. We have also created other videos after the success of the initial video. While the tennis pro can’t quit his day job, the extra money into his bank account definitely doesn’t hurt.”

6. Post on Craigslist, Thumbtack, LinkedIn and More

OK, cards on the table: My media business was built on posting ads on Craigslist in New York City and other major metro areas, back when I couldn’t afford other types of advertising. I know firsthand how social service-listing sites are bankable, and if you have a service or product to offer, you can make money, too. Find the network that suits your service or product best and work hard at building your profile and building a reputation.