Apple’s new ventures, the retirement savings crisis, and more
In this week’s Steady Investor, we look at some of the biggest news stories:
- Apple made a huge pivot this week expanding into new industries. How could this impact sales?
- A new study shows most Americans are not prepared for retirement. How can you start preparing?
- Could this new tax law hurt multi-nationals?
Read on to get the details:
Apple Inc.’s Next Chapter Involves TV and Goldman Sachs – Apple’s most recent quarterly earnings report revealed something that keen market observers probably already knew – iPhone sales were starting to slow. Not only are customers keeping iPhones longer, but competitors like Samsung are flexing their muscle in Emerging Markets where sales remain robust. How does Apple respond? Naturally, the company pivots. In a highly anticipated move this week, Apple CEO Tim Cook announced the company would be expanding its reach in entertainment, financial services, news, and videogames. Apple News+ is a $9.99/month subscription that is said to give readers access to more than 300 magazines and newspapers, in which the Wall St. Journal is involved. Apple is also set to launch a credit card in conjunction with Goldman Sachs, one that aims to give customers a commitment to privacy as well as real time cash rewards. But perhaps the biggest unveiling was Apple’s pivot into the TV streaming business, taking on behemoths like Netflix, Amazon, and Disney. Apple is said to be working partnerships with stars like Oprah Winfrey and Steven Spielberg for content, though it is unclear what Apple intends to charge and how they will deliver the service.1 ________________________________________________________________________
Are you falling prey to some of the biggest financial mistakes? See for yourself with our guide.
There are common mistakes and habits that can help some investors succeed while others fail. See what are the biggest mistakes investors make and how to avoid them with our guide, “5 Investment Do’s and ‘Don’ts”
If you have $500,000 or more to invest and want to learn more, click on the link below:
Could the New Tax Law Actually Hurt Multi-Nationals? The verdict may be “GILTI” as charged. The new tax law no doubt lowers the overall corporate tax rate for corporations, from 35% to 21%. But, there’s a provision in the law known as the Global Intangible Low-Taxed Income tax, or GILTI, that says multi-nationals that pay a foreign tax rate lower than 13.125% must pay a minimum income tax in the U.S. Since many corporations already pay a rate at or higher than 13.125%, many thought they’d be excluded from GILTI. But that’s not turning out to be the case, because Congress did not change rules that force some companies to count U.S. expenses toward foreign operations. In short, these expenses should be offsetting GILTI, but they’re not. The end result is that it may make sense for some companies to move some of these U.S. expenses abroad, which is the exact opposite incentive that the Trump Administration is trying to create.3
Government Report Shows Half of Older Americans Have ZERO in Retirement Savings – it’s a sad reality but also a well-telegraphed one: Americans are grossly underprepared for retirement. A recent government report moved the issue front-and-center again, with fairly staggering statistics that should give every reader pause. By the numbers: Of Americans 55 or older, an eye-opening 48% had nothing saved in a retirement account, like a 401(k) or IRA. We’re not talking low account balances or even a few thousand – we’re talking zero dollars. That’s a problem. To be fair, a decent percentage of these Americans have access to a pension, but the fact that no supplemental dollars are saved anywhere is, in our opinion, ‘not ok.’ While we’re dishing out the unfortunate stats, there’s more: The Employee Benefit Research Institute estimated that 41% of households where the head is between the age of 35 and 64 are probably going to run out of money in retirement. Too many Americans are relying on just Social Security to finance retirement, and we hope the work we do here at Zacks Investment Management can help change that.4
Not saving enough for retirement is a common investing mistake. But it is only one of many, in our view, that investors are making such as changing strategies too often, getting emotional about investing or failing to diversify.
To help you understand these mistakes and what you can do to avoid them, we have created the guide, “5 Investment Do’s and Don’ts.”5
In this guide, we provide our thoughts on what we believe are 5 of the biggest financial mistakes investors should avoid, while also examining 5 financial habits that we think can help you invest successfully and with confidence. If you have $500,000 or more to invest and want to learn more, click on the link below:
2 ZIM may amend or rescind the “5 Investment Do’s and Don’ts” guide for any reason and at ZIM’s discretion.
3 The Wall Street Journal, March 27, 2019. https://www.wsj.com/articles/tax-changes-hit-overseas-profits-of-some-u-s-companies-11553679000?mod=djem10point
4 Bloomberg, March 26, 2019. https://www.bloomberg.com/news/articles/2019-03-26/almost-half-of-older-americans-have-zero-in-retirement-savings?mod=djem10point
5 ZIM may amend or rescind the “5 Investment Do’s and Don’ts” guide for any reason and at ZIM’s discretion.
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