The Internal Revenue Service recently announced a competition to help redesign its online offerings to make the tax information therein more understandable to the average taxpayer. First prize is a cool $10,000. Though the IRS offers a wealth (ha!) of tax information on its website, it’s spread across multiple channels and topics and represents a foreboding learning curve for the uninitiated. The Tax Design Challenge seeks solutions to organize and present this information to make it easier for taxpayers to recognize and manage their own responsibilities and make informed decisions about their personal finances.
An Antidote to Short-Termism
Here is a sobering statistic, via Cullen Roche on his blog Pragmatic Capitalism. In 1940, the average stock was held for seven years. Today, it’s one month. All the market frenzy comes, he says, from short-term thinking. We judge the market in terms of quarters, not decades. And that results in higher fees, higher taxes and lower returns. An antidote, Roche says, is to better understand our portfolio allocations as an attempt to balance assets with liabilities. In other words, consider the duration of an asset, or how sensitive it is to price changes. Cash is a zero-duration asset; it’s safe in the immediate term, but loses purchasing power over time. According to Roche’s calculations, a bond index’s duration is 5.5 years, and the stock market’s is 25 years. Allocating a portfolio with those durations in mind gives better protection than trying to time the performances inside those bands. Doing otherwise, he says, is like “judging the performance of a two-year CD inside of a one-month period, but that’s the equivalent of what someone is doing when they judge stock market performance based on a one-year period.”
How Millennials Make B2B Decisions
A lot has been said recently about millennials’ effect on the workplace, but no matter how you feel about them, the fact remains that the next generation is seizing control of the workplace. A new survey by Sacunas found that 73 percent of millennials are involved in B2B purchasing decisions at their companies, and that is changing how vendors market their products. Not surprisingly, millennials have a preference for digital channels and place a greater importance on search engine results, websites and social media when looking for information about third-party vendors or new products for their company. Like in B2C retail, B2B companies also need to adopt video and mobile-friendly websites to successfully reach these millennial business buyers.