Investors Should Worry About Revenue, Not Earnings

Investors Should Worry About Revenue, Not Earnings

Revenue matters. | Copyright John Moore, Getty Images

Following two consecutive quarters of earnings declines (for the first time since 2009), “earnings recession” and the drag it could have on markets have become talking points among financial pundits. Brad McMillan, the chief investment officer at Commonwealth Financial Network, challenged this idea, showing how companies are beating Wall Street expectations at a much higher rate than average. McMillan says this is often a boost despite a decline in earnings. The real worry is a “revenue recession,” as this is expected to be the third quarter in a row of revenue decline. “Slowing revenue growth, especially over several quarters, means continued slower earnings growth, which will be a headwind for the future,” McMillan said. “The divergence between revenue growth and earnings growth suggests future appreciation will be more difficult.”

No Magic Here

Abra Cadabra? | Digital Vision/Photodisc/Thinkstock

The National Association of Personal Financial Advisors would like you to know that it does more than just recommend investors capture a magical creature with the power to grant wishes. In response to The Onion’s recent piece poking fun at financial planners, NAPFA polled its members to determine the top eight pieces of advice for a 5, 10 and 20-year retirement time horizon. For investors 20 years away from retirement, NAPFA advisors' top recommendation is to fund an emergency savings account to cover three to six months of living expenses. Ten years away from retirement? NAPFA advisors say being tax efficient with your investments should be a top priority.

IRS Increases Long-Term-Care Premium Deductibility Limits

They've got good news.

The IRS had some good news for taxpayers recently when it announced increased long-term care premium deductibility limits for 2016, according to Elder Law Answers. Premiums for qualified LTC policies are tax deductible to the extent they, in addition to other unreimbursed medical expenses, exceed either 10 percent of the insured’s adjusted gross income (under 65) or 7.5 percent of AGI (65 and older); however, the government caps this number based on the age off the insured at the end of the taxable year. The recently-issued Revenue Procedure 2015-53 increases these limits across the board.

His Middle Name is Merrill

Enigmatic Seattle Seahawks running back Marshawn Lynch continues to surprise. The Skittles pitchman apparently knows a thing or two about money management, and he's been helping out his fellow teammates, Ballers-style. On a segment on ESPN's SportsCenter, rookie receiver/kick returner Tyler Lockett revealed to Kenny Mayne that Lynch has been giving him advice on how to set up his 401(k) and talks to him and other players about investments during practice. Watch out, The Rock, Beast Mode is coming for you!

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