China Adjusts Yuan By Biggest Margin In The Recent Times

Chinese currency Yuan has been adjusted by a huge margin against US dollar. It has been one of the biggest adjustments in the recent times.

Yes, you have heard right – China has adjusted Yuan 0.52% stronger against the US dollar. It’s been the biggest adjustment since November last year. What prompted China to do this? Well, according to the Federal Reserve, interest rates are supposed to rise at a slower pace against the prediction and this has definitely contributed to this move. The change was so steep was that it was 0.52% stronger compared to the previous day. Central banks in China fixed Yuan’s midpoint at 6.4628 to the dollar. The Yuan has never been this firm since December 16 last year.

As we all know, Chinese currency de-pegged from the USD at 2005. And this has to be the 3rd biggest appreciation for. Every day, Chinese central bank fixes the exchange rate.

Well, for analysts, it wasn’t big news as they have been expecting this since several currencies including Euro, Yen, and currencies from developing countries rose steeply against the USD a day ago. As you can see, it contradicts from the Chinese central bank’s move back in January. Back then Yuan faced sharp fall and that resulted in a crisis in the stock markets all over the world.


What did market analysts say? Well, they were skeptical for obvious reasons. Did the Friday fix helped in offshore markets? It definitely did. The results were immediate. But that didn’t last since it reported a 0.3% weaker at the end of the day. If you want to learn more about the Pegging Of The Chinese Yuan, Click Here.

By the way, what resulted in this sudden surge of Asian currencies against the USD? Risk appetite played a big role for sure. What does a lower fix mean? That indicates the Chinese currency is appreciating against the USD. As we can see, the Chinese currency has to deal with less depreciation pressure now. This is definitely going to be helpful. The recent turn of events can be considered as the result of weakness experienced by USD. That said the confusion is still there as far as the driving force behind these fixes are concerned.

Devaluation of Yuan

  • Devaluation of Yuan had a ripple effect on stock markets across the globe. The 1.9% devaluation back in August led to some serious repercussions in the world market.
  • As far as the exchange rates are concerned, People’s Bank of China reiterated that they would let market forces to play their part in the determining the rates.
  • Back in December, the PBOC said that they will be setting the level of Yuan after a careful study of 13 currencies.

How did they arrive at the fix?

Recently, the PBOC made it very clear that they want to keep Yuan stable against many currencies. They used the currencies compiled by the IMF and the Bank for International Settlements while setting the Yuan’s value on a daily basis. Even though they considered several currencies, their sole focus on the USD. Even though they haven’t claimed that they are focusing on USD, it is apparent that USD is the main focus here. As you can see, Yuan has been stable against the USD of late and that could be a sign of them focusing USD.

Different Ways To Invest Tax Free

The increasing Federal and State taxes are making investors worry. Are there tax free investments? Yes, there are plenty of options you can try.

As we can see, taxes are modest on portfolios. Long term capital gains and most dividends have 15% federal rate. We saw the rates go up starting from 2013. And this trend will continue to unfold. On top of all the federal taxes, you can add state taxes as well to get a full picture. So, investors have a hard time all thanks to these taxes. Is there a way out? Well, there are several tax free investment options you can think of. What are they? Let’s take a Look Below.

Time for kiddie Roth

It is time to do something for your daughter. As you know, education loans must be killing her as she might be spending most of her earnings on paying the loan. Irrespective of what you are going to leave her in your will, you can go for smart investment for your daughter. Give her some money that she can fun to a Roth IRA. But she’s not allowed to touch it until she’s 60. She will have 40 years of tax-free compounding. She will be getting 7% a year on her investment. This is definitely an intelligent and sensible way to secure your child’s future.


Buy a Master Limited Partnership

Master Limited Partnerships (MLP) is a good investment strategy.

  • MLPs on energy assets. We can take the example of pipelines.
  • Their dividend pay is really attractive. You can expect something like 5%.
  • The good thing about their dividends is that they are tax free, at least in the initial stages.
  • The quarterly cash is nontaxable.
  • However, you won’t get this tax deduction after a decade or two.
  • In case if your heirs get these shares, they will have to restart the process with higher tax basis. Google MPL taxation for more information.

UGMA is a good choice

UGMA (Uniform Gift to Minors) is another tax free investment you can think of. You will be setting up a brokerage account for your daughter or son. You don’t have to pay taxes for the first $950 of annual income. But this may not be the case when it comes to the next $950, where you will have to deal with low bracket tax for kids. But the only problem with this investment is that your son will get ownership of this money once he turns 18. Well, there is no guarantee that he’s going to spend that money on his education, is there? So, I would suggest you to go for a modest account. If you are looking for Investment Advice On Stocks In A Bear Market, Click Here.

Open a Section 529 plan

Opening a Section 529 plan is another tax free investment that you can think of. However, the money has to be used for schooling and nothing else. Is there a drawback to this plan? Of course, there is. Stiff fees can wipe out the income tax savings. However, I would suggest you to open an account in a state where you have a favorable tax plan. For example, Utah has less cost. Or you can go to New York, where parents get a state income tax break. However, if your family is likely to get tuition assistance, then it wouldn’t be a good idea to go for this one.

Stock Market Rally To Get Affected By A Slowing Economy

The US economy has been slowing. The recent increase in interest rates by the Federal Reserve has not done any good for the economy and the stock market.

In December 2015, the Federal Reserve raised interest rates by 25 points. They did it because the economy was doing well according to them. Back then they said that you can expect this 25 point increase in each of their upcoming meetings over next 2 years. How did the market react to it? Well, the market didn’t react favorably. Bond yields were seriously affected. The stock market dropped 12% from December to February.

The economy wasn’t strong enough?

Yes, that’s what Federal Reserve tells us now. Recently, the Federal Reserve said that economy wasn’t strong enough to sustain another 25 point increase at this point. Moreover, they made it clear that they would go for a longer and slower increase in the future. The stock market seems to have liked the new comments from the Federal Reserve. Since February 11, the stock market has rebounded. But after surging for 3 weeks, it has gone back to where it was in January this year.

Stacks of coins


Buy stocks now?

Well, after the Federal Reserve made those comments, floor brokers on TV have been saying that you should be buying more stocks. Really? Is that a good idea?

  • That doesn’t make any sense as we all know the economy is not doing well.
  • Well, you have got to remember that when people buy stocks, floor brokers stand to benefit.
  • You should listen to the data now. It indicates that economy is slowing down globally and the ripples are being felt in the US economy as well, even though we have one of the strongest economies in the world.
  • Everything is declining at the moment, be it consumer consumption, labor, corporate profits, consumer confidence etc.
  • Industrial production is going down the spiral as well. As we all know, industrial production is the backbone of any economy.
  • As for the housing industry, the builder confidence is the lowest in the last 9 months.
  • Costco registered no month to month growth in the past few months.
  • Tiffany is another company that is struggling as they are dealing with sales declines.

Did the Federal Reserve do the right thing?

So, the latest admission of the Federal Reserve is a good thing or a bad thing? At the moment, it looks like a really good thing. By admitting that the economy is not as well as thought, the stock market has breathed a sigh of relief. However, don’t fall for the over enthusiasm of the Wall Street System? They want you to buy more stocks; that’s all. They have been singing this song every time federal cuts were introduced. If you are looking for an Advice To Stock Investors In A Rough Market Scenario, Click Here.

The fact of the matter is that central banks across the world are not as powerful as you think to overturn the economy. They might not be able to control it even after taking extraordinary measures. Even though stock markets surged last month, the underlying economic data suggested the weakness. So, before you get excited, you need to look at the overall data. A slowing economy can definitely slow the stock market as well. But you need to understand the fact that it is a global phenomenon and you need to be patient. Things are not what it seems right now. So, the stock market is bound to get affected by the slowing economy.

With Daylight Saving Time Get More Of Extended Daytime

Take a look at how you can be frugal even with more daylight to spend outdoors in the coming months.

It might be tough when daylight saving time leads to longer hours for your watch and your day. Many restaurants and retailers make full use of the situation; introducing special offers for the forthcoming summer months and for the extra time you can spend outdoors. That might be tough to overlook. Here are some ways you can still be frugal and make the most of the extended daylight hours.

In about a week’s time most Americans will be setting their clocks ahead by an hour. Many consumers love the switch to Daylight Saving Time as it means extra time available in the evenings. Others hate the thought that they will be losing an hour of sleep, which their bodies get used to and takes time to adjust, in contrast to watches that adjust automatically. It is a practice that was established in 1918 and it is still on for most Americans today, except for certain parts of Hawaii and Arizona.


Why daylight saving time was incorporated?

Many people think that daylight saving time was forced to allow the farmers more time to work. However the correct belief is that it was done to conserve electricity, so that less usage of artificial light would occur during the extended day hours. This might have been the true intention at the time it was constituted but today the Daylight Saving Time offers several conveniences that lead to greater spending in the modern day and age.

As cooling and heating systems are used in all households, the daylight saving time does not lead to appreciable saving in utility bills and energy usage. On the other hand the consumers end up spending more time as they are awake and active for longer hours. With the extra daylight most consumers end up spending more time at retail outlets, spending on recreation as well as at restaurants. This might be great for the retailers, but it definitely makes one lighter on the wallet. With the market facing an Uncertain Future, it is imperative that frugal habits be incorporated and one learns ways of saving even during Daylight Saving Time.

Most people are tempted to spend more time on restaurant patio areas and rooftop bistros, but it is a fact that restaurant prices are on the increase. For that reason it might be worthwhile to spend less money to host get together at home. With menu prices predicted to be up by three percent on an average at restaurants, you might want to think twice before you spend it all at restaurant visits.

Minimal use of HVAC systems is another way to save on energy usage and utility bills. This is a period of time when many homes still need heating systems, but the coming months will bring on hot weather. With automated the settings of the HVAC systems to an optimal temperature level, one can save on the extensive usage of these systems. Ensuring proper maintenance and servicing of the systems and saving on energy usage are ways to save money this time of the year.

How Does Filing Income Taxes In The US Work?

If you have not filed your income tax, it’s time to file it now. Some of the basic steps of filing your taxes have been briefed here.

The citizens today have been paying taxes all year across the world, but to determine if you have paid the correct amount happens in the month of April every year. Some of the important steps to file your taxes are as follows. If you want to know more details about US Tax Or Tax Free Investments, you can also check this Useful Link that help you understand the importance of income tax and filing income taxes as well.

Begin with your gross income

Add your gross income which is inclusive of your salary, annuities, pensions, wages, and interest income. If you are employed, you will receive a W-2 form from your employer that shows the amount you have earned and the withheld income tax.

Consider the adjustments, if any

Some of the adjustments include retirement plan deposits, alimony paid, self employment tax payment, student loan interest amount, or relocation expenses. So subtract the adjustments and the difference amount is known as AGI which means the adjusted gross income.


Make a choice

Once you identify your adjusted gross income, you have to make a choice between the two options. You can either subtract the deductions that are itemized or the standard deductions whichever is of the higher amount. Some of the examples of itemized deductions include medical expenses, home mortgage interest, charitable expenses, and local and state tax of the previous year.

Personal exemptions should be subtracted

The next step involves subtracting all your personal exemptions and the leftover amount is the taxable income that needs to be considered.

Refer the IRS or Internal Revenue Service tax table

The United States follows a system called as a progressive or marginal tax rating system wherein the more your salary the higher is your tax rate. In order to know the exact amount that is taxable, you should refer to your tax table. Look for the number matching with your filing status like married but filing jointly or single, married but separately filing, dependent child, or qualifying widow. That particular number would be your gross tax liability.

Subtract credits from gross tax liability

Subtract all credits from the gross tax liability. Some of the tax credits include earned income credit for families with low income and for child care expenses.

Determine your net tax

The final number would be your net tax. If the net tax amount is positive, then you have to pay money to the IRS and if it’s negative, you get a refund.

Filing your federal income tax return by paying any taxes due by April 15th is a must for every American citizen who is employed and earning income through any source. When you pay or file your tax late, you will be penalized and the interest rate will keep increasing. However, if you are eligible for a refund, you will receive the same within 2 weeks. So, file your income tax now.

Best Retirement Destinations In US

For those looking to settle at a modest place after retirement, here are some places to consider in the US.

Many people wish to invest in a modest home and stay in a place where the cost of living is affordable. That makes such places ideal for retirement. When one is looking at retirement spots they need to consider certain factors. Housing costs are the main consideration. This needs to be affordable for retired couples and individuals. At the same time, places that offer great amenities at reasonable cost of living also make the ideal spots for retirement. With a budget of spending annually an amount of $40,000 or less, Here Are Some Ideal US Towns that one can plan for as their retirement destination.


If one looks at the median mortgage that is paid by residents in this place, those who are sixty years of age or older pay about $1060 monthly as a mortgage. If a mortgage is not required, the housing costs decline further to a figure around $347 per month. Retirees pay a median cost of $625 monthly which makes it a comfortable budget to plan for retirement.


Those who retire in Albuquerque they can look forward to lower costs in housing as well as several amenities to enjoy. Monthly costs for aged people in terms of mortgage payment are around $1150 while the same comes down to $358 for those who own their own homes. For renters the figure hovers around $657per month.


If you look forward to a life of golf and club facilities you can easily plan to retire and stay in this town. The median costs are reasonable and can help one have a retirement budget of $40,000 per year for a comfortable existence. Renters would need to pay $626 which goes up to $1064 for those who have a mortgage payment to make. The cost hovers around $353 for homeowners on a monthly basis. For advice on pension arrangements, here is a Helpful Article To Check Out on Choose Your Pension Payment Options Wisely.


For South Caroline residents it is a great place to plan for retirement. Residents can get free tuition if they wish to pursue any vocational course after the age of sixty. The housing costs on a monthly basis average around the median figure of $1107 while it is $350 for those who are homeowners. The cost for renters is slightly higher than other places, averaging around $712 per month.


This is another affordable place where one can plan to lead a comfortable life after retirement. They can expect to pay an average monthly amount of $1053. This drops to $329 once the mortgage has been paid off. To rent one would expect to pay around $624.

These figures are subject to change and increase slightly with inflation rates. However, in comparison to other places where costs of living are high, these are ideal destinations for couples and elderly retirees to plan to settle down after an active life. Amenities and housing are affordable and standardized, allowing one to be assured of help and support during their advancing years.

Learning Lessons From The Swiss National Bank

Here is a look at the unconventional moves that the Swiss National Bank took over the last year.

2015 has been a rough year for the Swiss National Bank, which is based in Zurich. It lowered its interest rates to the extent that the rates moved to the negative zone. This was not enough as the bank then removed the minimum exchange rate of the Swiss franc against euro. This prompted a collapse of the euro by about 30% against the franc. While these steps might sound positive, but due to most of the bank’s currency holdings being in euros, the weakness of the euro led to paper losses to a large extent when these were translated back in French.

Transparency of SNB

The SNB was not afraid to do things differently as it became evident last year. It started to expand its foreign equity holdings as well as stocks. The bank has a transparent policy in place about its performance and holdings which is novel as compared to other central banks. The quarterly reports that are issued showcase the information in a comprehensive and thorough manner. The second quarterly report of 2015 revealed that the bank had about 18% of its assets in equities. This represents about 15% of the gross domestic product of the country. The bank holds 37 billion in US dollars which is in shares invested in US listed companies. At the time when it started to buy stocks of US companies it has become one of the largest shareholders of stocks in Apple. Besides Apple it has significant holdings in businesses like Johnson & Johnson, Proctor & Gamble, General Electric and others like Facebook, Coca Cola.


Record losses in 2015

As the exchange rate ceiling was removed, massive losses were reported by the bank in the first quarter of 2015 itself. It has been a momentous loss for the bank, biggest in its history. The second quarter saw more losses which led to the bank losing about seven percent contribution to the country’s GDP. The second half of the year saw the bank recovering some of its losses which stood at 23 billion US dollars.

Untimely investments

It was furthered by certain untimely investments. Not only did the stocks of Apple fall, but the holdings of the bank in Valeant Pharmaceuticals also suffered. The bank increased its holdings in Valeant just before the company landed in a controversy of gouging its prices and having committed fraud which was on the lines of Enron. With the stocks becoming less than half, about 146 million of the losses of SNB can be contributed to the holdings of Valeant alone.

Intervention in 2016

The consumer prices of the country have fallen in 2015 and Switzerland sees a rise in unemployment rates. The stocks of the nation suffer and SNB has decided to take aggressive measures in 2016. It is known to take bold moves and it is anticipated that the SNB will continue to design such moves to help the country’s economy in 2016. It however, reflects the current state of many European countries. The European Markets Are In The Favor Of The Federal Bank, do have a Look At The Article.

Understanding The Factors That Influence Market Trends

Trends are what investors and traders look at when they are looking at long term profits from the markets. The time frame might be long or short. One might be looking at the trending market or ranges in general. In both cases, one is concerned with the flow of prices and how profits and losses are affected by that. The four main factors that influence fluctuations in the short term or trends in the long term are government policies, speculation, expectations and international transactions.

Effect of government policies

When it comes to free markets, government policies and decisions have much effect. The monetary and fiscal policies have a profound effect on the movements of financial markets. The interest rate is increased or decreased by the central governments like the Federal Reserve in US which in turn leads to slow down or increase of growth in an economy. This is the impact of monetary policy. When spending by the government contracts or increases, it is manifested through changes in fiscal policy. These actions are taken for stabilizing prices or for easing unemployment. Interest rates might be altered or dollars available in the open market might be changed. These are actions taken by governments to determine investment within or outside the country.


International transactions

The second factor that influences markets is the flow of funds between different countries. The strength of a country’s currency and economy is impacted accordingly. If more money leaves the country, the economy as well as the currency becomes weaker. Countries which export mainly are bringing in money from other countries. The money is then reinvested and can be used to stimulate the financial markets. For more information on How To Survive A Long Term Bearish Forex Market Look Up This Link.

Expectations and speculations

These are integral parts of any financial system. The belief of the politicians, investors and consumers influence the state of the economy. Current acts that are committed help create and shape the future and current trends. Sentiment indicators are often used in order to gauge the feelings of a group about the economy’s state. Fundamental as well as technical analysis help gauge the trend direction as well as where the price rates would be headed in the future.

Supply and demand

The push and pull dynamics are created by investments, currencies and products and their supply and demand in a country. The rates and prices change as per demand and supply. When supply shrinks and demand rises, prices rise. Prices fall when demand is less than supply. With supply being stable, prices fluctuate as per increases and decreases in demand.

These factors are known to create long term as well as short term fluctuations in the market. The elements and how they come together in the creation of market trends needs to be understood. Governments issue mandates that impact transactions in the international scene. When taxes are lowered as well as interest rates it leads to more spending as well as economic growth.

Pegging Of The Chinese Yuan

This Article focuses on understanding how the pegging of Chinese Yuan has helped the global economy.

The Chinese yuan had been pegged for several years. It is an approach that has kept the exports of the country cheaper and attractive compared to that of other nations. China worked with the principle of motivating the rest of the world to buy its goods. In this way it has been able to gain economic prosperity.

If the yuan currency is kept low as compared to other currencies, consumers will use more of foreign currencies to buy exports of China as compared to a situation when yuan was more expensive. The People’s Bank of China has kept the yuan weak in comparison to currencies like the US dollar due to which more US citizens buy Chinese exports and fled China with US currency.

It is known that exports act as principle drivers of any economy and it represents the amount of money that flows into a nation. The yuan was kept artificially at a low level in order to ensure that export activities are robust. This was also done by the Chinese Central bank purchasing foreign currencies. The central bank has foreign exchange reserves around 600 billion in US dollars as of December 2004 and this amounted to 3.8 trillion in US dollars by 2014.


Economic prosperity

The manipulation of the currency has helped the nation to thrive and as a result, it has seen a robust growth, which has been more than ten percent repeatedly in the last decade. The industrial sector of the country features the largest manufacturing sector in the world, as found in 2011. The country showcased a robust rate of growth since 1980. Due to this its gross domestic product per capita has also doubled in a decade, which evens an industrialized nation like the UK was able to achieve in 150 years. With this kind of expansion China owns about 23% of the value added manufacturing services as found in 2013 findings.

Benefits and costs

Even though the figures are great for China, it does not make every country optimistic. This Article talks about other Chinese Financial Policies as well. For instance, the US workers and manufacturers complain about the surplus of Chinese trade and how the pegging of the yuan has led to the country having an unfair advantage. Many have asked for China’s currency to be revalued. However, this offers benefits for other countries too who is purchasing Chinese goods. As these come at cheap prices, it helps to keep inflation under control in these countries as well. The benefits extend to businesses as well. The less expensive intermediate components from China that are used to make industrial goods in other countries also lead to less pricing of these goods. Hence, other countries can increase their profitability based on the cheap Chinese goods they use. The trade deficits also help in the movement of capital such as it does from the US to China. When the foreign capital is used to purchase interest bearing securities, it reduces borrowing costs as well as encouraging investments. Hence, the US and other countries find economic growth due to the pegging of the yuan.

Investment Advice on Stocks in a Bear Market

Many people are saying that a bear market lies ahead and others are wondering whether they are already in it. As per statistics, till S&P INDEX 500 falls by twenty percent or more from the peak that it reached in May 2015, it cannot be officially declared. Of course, by then all would be going downhill and more.

Secular trends

As per market experts, secular bull and bear trends exist. The last bear trend ended in 2009 and a new trend in bearish market conditions has already begun. Hence, people need to be aware that a bear market risk is imminent. For investors who are looking for investment advice, they need to stay on the course and not make any panic decisions. Though it is seen that people in their fifties or more have about seventy percent of money in stocks, it is necessary not to panic but to reduce risks as much as possible.

Keeping it simple

With ETFs in the limelight, many investors might think that they are the best, but one needs to judge from a different perspective. At such a time, it is best that one does not own any volatile funds or multi leveraged index ETFs. It is best to dump such funds as a bear market scenario is evident.

Spring cleaning of your portfolio

My investors often have stocks of companies or ventures that they feel have the potential to provide great gains, but have not shown any performance till now. This could be a business in China that is yet to show profits or a promising entrepreneur’s venture that has not performed as promised. Many investors have such stocks in their portfolios. It is necessary to sell these losing stocks and not think of holding onto them.


Reduce stock holdings

In a bear market it makes sense to reduce your stock holdings and have cash instead. When you have enough cash to cover expenses for three years or more, you will be able to own stock again. It is best to stock up on cash instead of stocks at this time, besides the ones that have been consistent so far.

Increase defensive holdings

Core funds like US or international index funds can be staple items in a stock portfolio that need not be removed in bear market conditions. You could even consider moving the money into sectors that have done well over time like utilities, health care, consumer staples and telecoms.

Bonds can be held onto

Even if emerging company bonds or high yield corporate bonds might not make sense, holding onto bonds of entities like municipalities would be sound investment instruments to hold onto. Treasury bonds can be held on as well, even when a recession descends. More advice on “Mistakes You should Avoid when Investing” matters can be found in the Article Mentioned Here . Beyond taking these steps, one should not worry much about the financial markets and take the time off to sleep more and spend time with family and friends. Recession or bear market might be times when you need to take your attention off the stock market and enjoy life.