Retailers Reflect a Changing Economy

By Jon Herring

What is good for individuals and for the economy in general is not necessarily good for retailers. For example, it is a good thing when people stop using their home equity as an ATM machine. And it's a good thing when they increase savings and pay down debt. But these improvements in consumer balance sheets can be a drain on the balance sheets of retailers.

Like it or not, consumer spending accounts for more than two-thirds of U.S. economic activity. And that makes retail earnings an important barometer for the economy. So what are retail earnings telling us... and how can you profit?

The biggest lesson we can take from retail earnings is that our economy is not only slowing (that is obvious), it is also changing. We are moving from an economy based on "what I want" to an economy based on "what I need."

That is why retailers that sell necessities (like Wal-Mart) will continue to show strength, whereas retailers that focus on luxuries and rely on discretionary spending (think Coach, Tiffany, and Saks) will show weakness.

Two companies that exemplify the shift in consumer buying trends are deep-discount retailers Family Dollar (FDO) and Dollar Tree (DLTR). Market research firm Nielsen recently reported that high-income shoppers (from households making more than $100,000 a year) increased their spending at dollar stores by 18 percent in the second half of 2008 as compared to 2007. Not surprisingly, both of these companies are near their all-time highs, while the rest of the market founders.

And speaking of relative strength, one of my favorite retailers in this market is AutoZone (AZO). When the economy tumbles and money is tight, people are more inclined to fix their old car, rather than buy a new one. Need evidence? AZO is also within spitting distance of its all-time high. Few companies have shown this level of resilience, and in a down market that is what you should be looking for.

Personally, I am choosing real estate, not to buy and hold, but rather to flip and collect profits immediately, no placing bets on stocks. Home Seller Assist provides complete A-Z training and 100% funding to buy using no credit or cash plus we have live training each Wed evening!

Larry Potter
Home of 20-day loan closings

How to Not Only Survive but Prosper in 2009

Prosperity in the midst of the worsening economic recession might sound like a pipe dream.
But the reality is that those who'll prosper will be those with a definite plan in mind and a lot of courage.

Most Americans are focused on survival right now.
They're circling the wagons in an attempt to protect themselves.

But some lone guns are out in the hostile economic wilderness searching for gold mines of opportunity.

Prosperity Road won't be easy to travel at first. There's bound to be plenty of cactus and wild weather to hamper the journey.

But in the end, those gold mines will be worth the effort.

So how will you find your gold mine?

By mapping out where you want to go and how to get there.

If you want to go from survival mode to Prosperity Road, click here.

Tips For Investing in Commercial Real Estate

by Rachel Spohn

Investing in commercial real estate can be a daunting, and if done incorrectly, very expensive process. The good news is you don't need years of training to be successful at it. First-time buyers who take the time to do their homework find real estate investing to be financially and personally rewarding. This article gives newbies the practical advice they need before jumping in.

First, here are a few differences between residential and commercial real estate (CRE) investments that you should know before buying anything. Commercial properties

• are valued differently. CRE income is directly related to its usable square footage, which isn't always the case with residential properties.
• often see greater cash flow. On an initial investment basis, the yield is often higher per square foot than in residential. A leased or rented multi-unit commercial property generates more income than a single-family dwelling.
• have longer leases. A longer lease length helps stabilize cash flow.
• help diversify risk. What this means is if, for example, you own an apartment building and you lose one of your ten tenants, only one-tenth of the income for that property is lost. In a single-family house a lost tenant means the entire rent is lost.
• are valued differently by the bank; find one that works with commercial real estate, and know that it will want a higher down payment than with residential investments, usually 30 percent or more.

One important similarity to keep in mind between these two types of property investment is that commercial real estate does go into foreclosure. Banks apply the same methods here as in residential properties.

Now that you're a little more familiar with the ins and outs of commercial real estate, the next step is to do some research. The worst possible thing to do is to jump right into before getting all the facts. It is important to educate yourself as much as possible to keep from making a financial blunder. Read as many books on the subject as you can. Learn the market for your geographic area.

If you have a specific property in mind, find out everything you can about that as well. Find out what the vacancy rates were with the previous owners. Talk to current storefront managers and find out what they like--and don't like--about doing business there. Don't be afraid to get out there and find the answers to such key questions as, Are current store owners planning to renew their leases? How are they doing financially? Have they been behind on rent before? What did they like about former management? Is the site properly zoned? Are any residential properties being built in the area? Is the population's median income at least at the national average, and are people maintaining their income levels? Be sure to ask to see the sellers' cash flow statements, too.

And if you want to flip commercial properties, check out the Home Seller Assist program and their 3% funding program.

Armed with this information, you will be better able to make a financially sound decision on your investment. Commercial real estate is a challenging but potentially very lucrative field, you just have to play the game right and educate yourself as much as possible.

Bacchus Development (http://bacchusdev.com) offers some of the most sought after commercial real estate for sale in Orange County. Rachel Spohn is a freelance writer.

Article Source: http://EzineArticles.com/?expert=Rachel_Spohn

Real Estate Tip from a team member...

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Newsworthy

John F Kennedy said that a rising tide lifted all boats. That may no longer be the case. Most Americans are worse off now than they were in 2001 at the start of the last stage of economic expansion. And the median, as opposed to average, household income is only marginally higher than it was a generation ago. Is the American Dream fading?

Barbara Ehrenreich, author of the mini-classic Nickel and Dimed (2001), has brought out a collection of her most biting journalism and certainly thinks so. In language only she could deploy, Ehrenreich explains why the debate about whether the US is heading into recession is irrelevant to the large swathes of America that for years have endured flat or declining incomes.

For people living in the "real economy" as opposed to those who measure success by macroeconomic numbers, recession has never been far away. "With all this talk of how to stimulate it, you'd think that the economy is a giant sex organ," she writes. "If we have learnt anything in the last few years it is that the economy is no longer an effective measure of human well-being . . . If there is a real economy, then what in hell is the economy?" To pose the question differently, who nowadays best symbolizes the American economy?

Government Intervention Has a Ripple Effect

By Rick Pendergraft

Over the last month, the intertwined relationships of the markets have been wacky, to say the least. On July 15, the SEC announced its protection plan for Fannie Mae (FNM), Freddie Mac (FRE), and 17 banks and brokerage firms. This move totally disrupted the natural ebb and flow of the market.

Financial stocks bottomed (for now) on that date - which makes sense. But the next part doesn't make sense. Oil peaked on July 15. What does the U.S. government bailing out financial institutions have to do with the oil market?

When the government stepped in to protect those financial stocks, the dollar rallied. Oil is traded in dollars. And much of the rise in oil over the last year can be attributed to the falling dollar. So the rally in the dollar that started on July 15 caused oil prices to drop.

All this being said, it looks like the dollar has too much resistance to get through in the near term. Plus, at this point, oil has too much support at $110 to blast right through that level. Look for a pullback in the dollar and a rally in oil over the coming months.

You shouldn't get overly excited about this manufactured rally in financial stocks, or about the decline in oil. The downward trend for financial stocks is still in place, as is the upward trend for oil. The government may have reversed things for the short-term, but this could be a major opportunity for you to short financial stocks and buy energy stocks.

One thing it has helped is the Home Seller Assist program created by John Alexander as explained at www.fastsellerloans.com, this no bank qualifying program is helping many who could not otherwise buy a house, check it out today.