Patagonia Makes Headlines For Holiday Donation

By Kristin Peixotto

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The predicted $655 billion holiday shopping seasons kicked off with Black Friday last week, and consumers are protesting with anti-consumerism hashtags like “buy nothing day” and REI’s “opt outside.” Environmentally concerned company Patagonia, made world news as it committed to donating 100% of Black Friday sales to help the environment.

Give Us Some Credit

A college student’s guide to establishing credit and using credit cards as a financial tool

By Talia Smith

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During my last trip to the bank, my banker checked my account, looked up from her computer monitor with a grin and extended her arm for a fist bump. What did I do to deserve such a first bump? I had a killer credit score.

What is a credit score? 

Budgeting: It’s not as bad as you think

Sarah Russell

If you’re anything like me, budgeting hasn’t always come as second nature. I first ventured into the world of budgeting in high school, when I got my first job. Each month I knew I had a set amount of money for gas, and a set amount for random spending. Easy right? Alright, now let’s head into college. Freshman year, a breeze! With dorm points taking care of food, and not needing to pay for gas since I didn’t have a car, there wasn’t much to worry about. Fast forward to now, my senior year of college, living with a roommate off campus and broke as Mark Helfrich’s career. I knew that unless I wanted to start living a stereotypical college kids life by eating top ramen for every meal, I needed to get my finances in order. So, like the self-sufficient adult I am, I called my mom. Fifteen minutes of “yep, mhmmm, yes, ok, yeah I did, okay, yep, love you too”’s later I decided I needed to keep better track of what I was spending. After a bit of research, I discovered a website called mint.com that helps you keep track of your expenses.

Mint is a free (keyword: FREE) service that helps you stay on top of your spending habits. You can use Mint through it’s main website or you can access it through the app. Mint first connects you with all banking services you use. Through that, Mint collects information regarding what you spend your money on. It categorizes it into subjects such as alcohol and bars, food, clothing, utilities, etc. so you see exactly where your money is going.

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Besides seeing where your money is headed, Mint allows you to set goals and limits for yourself. You can set goals for how much money you wish to spend in each category per month. By creating a budget, you can track and monitor what you are spending. Setting goals and budgets for yourself can help you maintain a steady balance in your bank account each month.

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Tech giant Apple records 1st quarterly loss in 13 years

Apple holds a special place in the heart of the masses. Known for its simplicity and amazing innovation, Apple had experienced massive growth for well over a decade. Unfortunately, 1st quarter reporting results have halted the amazing growth that has made Apple the goliath of the tech industry. After the quarterly earnings report was released, their stock price fell 8%, now sitting at around $93 per share. To make matters worse for investors, Billionaire Carl Icahn instantly sold off all his shares of the company, which amounted to over $700 million worth of shares. Icahn claims to have a strong love for the company and its leadership under Tim Cook, but fears of Chinese government intervention with the company was enough to give up his stake. The strained relationship between Apple and China has led their government to shut down iTunes movies and ibooks in the country just this week.

“They went too far in the high end of China,” states Tom Giles of Bloomberg. Their focus on high end Chinese consumers left them vulnerable to competitors whom were willing to slash their phone prices. In the globally saturated market of smartphones, it is extremely difficult to continue growth at the rate at which Apple had for so long; especially when the iPhone drove the most revenue for the company (2/3).

It is time once again for Apple to innovate and deliver a product that consumers can get behind. They have made acquisitions in Virtual Reality and automobile industries, so it will be interesting to see where they direct their innovation. After all, this is what made Apple so great. It’s time they go back to their roots of radical ideas, bringing forth a product that can “Wow” the world. Their brand, its stakeholders, and their loyal customers desperately needs fresh and memorable innovation.

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by Estuardo Perez

 

 

GoPro Off To A Rough Start In 2016

By the end of 2015, Mark Woodson, the young CEO of GoPro, was listed as the 5th highest
paid CEO among U.S. public companies. Woodson raked in $77 million dollars and even managed to splurge on an early Christmas gift for himself. According to Forbes, On December 22 of last year, Woodson ordered a custom, 180 foot yacht with a price tag of $40 million. Woodson’s lavish spending appears to have served as a toast for a successful end to the year, although GoPro’s stock had declined over 70% during the last 12 months.

Here we are three weeks later, and GoPro stock has hit its all-time low of $10.87, caused by the Hero 4 Session Camera’s failure to meet sales expectations. Their lack of product sales has negatively impacted GoPros staff as 105 positions will be terminated. This was the same company that had a growth of 50% over the previous two years! The future of GoPro is of much concern to investors.

Evidently, the Hero 4 was a flop which was not worth the price tag GoPro set forth. While their product line will extend into the drone market in 2016, it doesn’t sound like something Investors can rely on to make up for lost sales.

The Karma Drone by GoPro is scheduled to release by the Christmas holiday season. GoPro will have a rough time competing with the Chinese company, SZ DJI Technology Co. which already sells top quality drones. Not only will GoPro have to ferociously compete for the growing drone market, they would also strain its partnership with 3D Robotics Inc. another drone-making company which includes GoPro cameras with its final product.

While the idea of a drone is appealing, GoPro is in dire need of innovation that can further increase the profitability of its business. Investors will continue to flee as they see the value of GoPro plummet. Screen Shot 2016-01-14 at 4.39.38 PM.png

Forming the SOJC Club Alliance

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Bobby Whittingham

Last spring we created a stock market index to follow stocks that are interesting for students. IR Futures members “buy” a stock of their choice for $1. We track the stocks on a Google Finance portfolio and watch for industry news and corporate developments that impact the stocks. During the first meeting of the following term, whomever’s stock has the greatest percentage increase in value wins the fees we collected and more importantly, crowned top stock analyst.

This term IR Futures invited a handful of other SOJC student groups to go head-to-head with us on the stock index. We offered to teach them what we know about stock fundamentals to get the index off on the right foot. Esuardo and myself are creating a brief presentation and will meet with Duck TV, AHPR and PRSSA.

What the presentation will cover

Mainly, we want to raise awareness for IR Futures and get students interested in personal finance. In terms of discussing stock market basics, the simpler the better. We’ll explain how corporate news announcements and industry trends impact stock prices. The IR Futures Google Finance portfolio and Wall Street Survivor game make it easy to follow stocks and get access to relevant market analysis and industry news. We hope to help students understand the dynamics and demystify the markets. Knowledge is power and we all have a stake in the financial markets even if we don’t own any individual stocks.

After making our rounds to the SOJC clubs, we hope to have an expanded student index up and running by the first meeting of next term. Who knows…if all goes according to plan the game could expand to all SOJC clubs!

 

It’s Never Too Early To Dive Into The Stock Market

By Emma Scherzer

One year ago, with close to no knowledge of economics or money, I entered foreign territory when I decided to invest in the stock market. As it turns out, it was one of the best decisions I’ve made in my young life.

Lululemon was down on their luck in early 2014. After a public relations nightmare when the company’s founder Chip Wilson said in an interview, “some women’s bodies just actually don’t work” for Lululemon’s tight fitting pants, and a major product recall on see-through leggings occurred, many people ditched the stock in exchange for something more stable.

Contrarian, value investing is based on the principle that out of favor stocks have potential for the future. With a strong brand name like Lululemon, they weren’t expected to be down for long. The company’s down turn in 2014 presented a perfect opportunity for people to invest in Lululemon because the stock was more affordable. So I emptied out about half of my piggy bank that had accumulated from cashiering at a grocery store for two years, and poured it into the stock market. Fortunately for me, my dad is an investment advisor so he was able to guide me along the way.

Rick Ferri said in an article in the Wall Street Journal that the “solution is to have a realistic philosophy and a practical plan. A philosophy might be that the markets aren’t predictable and that it’s imprudent to try to beat them. A strategy based on this philosophy might be to hold the same fixed allocation in stocks, regardless of what the market does. This would have meant buying into the market during the financial crisis when prices were low and selling some after the market recovered. That’s a realistic philosophy and a practical plan.”

What I’ve learned over the past year is that in the short term the market is very irrational, in the long term it’s more rational. Putting money into the stock market is considered speculative investing, which is a financial transaction that has a significant risk of losing all or some of your money. There’s never a 100 percent guarantee that you’ll get a return on your investment, but you never know unless you try.

For students who are interested in getting involved in the stock market, anxiety is a common feeling. Charles Rotblut, vice president of the American Association of Individual Investors says that he tries to comfort nervous investors by, “suggesting the option of pulling out a calendar and circling a few days in over the next several months. On each of those days, invest part of whatever amount you are planning to allocate to stocks into the market. This will reduce the timing risk of jumping in with two feet on a single day, while avoiding making a decision based on what you think the market will do.”

The bottom line is it’s never too early to invest in your future. Investing a modest amount today can lead to bigger returns in the future. Taking a bit of time out of your day to learn about investing now can give you the competitive edge for financial stability in the future.

Sources:

http://www.wsj.com/articles/SB10001424127887323452204578289721356165706

http://www.wsj.com/articles/SB10001424052702303393804579311062582473556

All About Those Funds

by Emily Foster

According to financial expert Dave Ramsey, 75% of college students feel they are not ready to make smart financial decisions for themselves. In fact, if you were to ask a group of your friends, how many of them would truly understand how compound interest and mutual funds work? It’s time for us to start thinking about our financial futures. Like, today.

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This article from daveramsey.com compares the results of two friends who put money into investment funds–at different times in life and for different lengths of time. Ben started investing when he was 19 by putting $2,000 into his funds each year for a period of 8 years. Arthur didn’t start investing until he was 27 and invested a total of $78,000 over 39 years.

The friends viewed their funds when they turned 65 and, even though Arthur invested a larger amount of money, Ben earned $700,000, yes $700,000, more than Arthur. Moral of the story: start investing early. If you’re interested in putting aside even a small amount of money each year to be invested, talk to your banker or parents about setting up a mutual fund. I’m interested in starting my investment portfolio soon!

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And, since we are an investor relations group, what is the latest news on mutual funds?

Uber is a private taxi business and is now valued at $50 billion. And, according to Andrew Ross Sorkin of The New York Times, Uber is one of the key “unicorn” corporations that Main Street investors (or mutual fund investors) are investing in. “Unicorn” in this sense is a term used to define start-up technology companies worth $1 billion or more. The category includes other tech businesses that you may know-including Pinterest and SpaceX.

According to Sorkin, unicorns are scary. He refers to the dot-com collapse in 2000, a time when internet-based stocks grew rapidly only to decrease suddenly within a matter of just a few years. Basically, the unicorns we see today are considered to be the next internet-based stocks and are risky to invest in. But, for some reason, public investors and 401(k) contributors have been placing shares of private companies like Uber into their investment funds. While it’s a scary thought to have volatile shares within your mutual fund, they increase in value quickly and can pay off if, of course, they don’t collapse before you can withdraw your earnings. Despite the risk that unicorns seem to bring to the investment world, Main Street investors like T. Rowe Price and Fidelity assure their investors that the “mystical shares” take up only small portions of their entire funds.

The Dave Ramsey and The New York Times articles show that while investing has large monetary benefits, it can be very risky and takes a large amount of analyzing to make wise investment decisions. So, if you’re considering investing your money into stocks or a mutual fund, consider whether rapid growth or a safe financial ride matters most to you and stick to a smart money plan.

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Sources:

http://www.daveramsey.com/blog/how-teens-can-become-millionaires/

Preparing To Combat The Retirement Crisis

By: Kaitlyn Harbick

92 % of Americans surveyed by PBS NewsHour think there’s a retirement crisis.

This past evening, some members of our  Investor Relations club attended a lecture hosted by the University of Oregon School of Business called The Retirement Crisis. The lecture not only proved highly insightful in that a breadth of information regarding saving for retirement was offered, but it also served as a much needed reminder of the crucial importance of being prepared for our post-career lives.

Joshua Rauh, Stanford Graduate School of Business professor of finance, contrasted arguments for and against whether or not we are indeed plagued with the inevitable burden of living in a society in which a healthy retirement fund is not always a given. Rauh dove into the facts backing the current scare by explaining that one reason contributing to the crisis is that the longevity of life expectancy has increased 60 percent since 1955. Put in simpler terms, people are living longer, therefore needing more money saved up by the time they retire. The average retirement age for men is 64, whereas the average for women falls around 62. Although this average retirement age has not seen much of a shift in recent years, we are inevitably living longer.

Rauh explained how 53 percent of individuals are at risk of falling short of the 70 percent replacement rate of wage-indexed average earnings. The good news? The 401k system is indeed seeing improvement. However, Rauh argues that private sector IRA plans, such as payroll deduction IRA, SEP and Simple IRA Plans, are better options to seek out.

The next speaker in attendance was Ted Wheeler, Oregon State Treasurer. Adding to advice given by Rauh, Wheeler offered something that struck us all: People today are more afraid about running out of money for their retirement than they are of their own death.

So, what can we do about this as students? Get educated, absorb any information we can on the topic, and when the time comes to land our first full-time positions, seek out valuable and smart retirement plans that will make us the 8 percent not worried about the retirement crisis.

Photo courtesy of Forbes.com

Acorns: Change in Micro-Investment

By: Vania Ahmad

Have you ever considered investing your spare change?

Acorns is an app that allows users to automatically make investments by rounding up spare change from credit or debit card purchases. For example, if you buy a latte for $3.75, 25 cents will be withdrawn from your bank account or charged to your credit card. Once the roundups reach $5, the money is invested in a personalized portfolio. You also have the options to invest lump sums and set daily, weekly, or monthly recurring investments.

Account Home (1) Round-Ups (1) Deposit-Withdraw (1) Account History

There are five different options for Acorns portfolios with varying risk levels, which were developed using Nobel Prize winner Dr. Harry Markowitz’s Modern Portfolio Theory. All of the portfolios are diversified across six asset classes: large company stocks, small company stocks, emerging market stocks, government bonds, corporate bonds and real estate stocks. The “conservative” portfolio invests heavily in government bonds while the “aggressive” portfolio invests more in real estate stocks. There are also moderately conservative, moderate and moderately aggressive portfolios. After asking a few simple questions, Acorns recommends a portfolio for users based on their current financial situations and investment goals.

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Acorns charges a fee of $1 per month for accounts under $5,000, and accounts over $5,000 are charged a .25% annual fee. There are no fees or penalties for deposits and withdrawals, nor is there a minimum balance requirement. Accounts with a $0 balance are not charged any fees.

Apps such as Acorns encourage young people to start investing. Results from a Bankrate survey show that only 26% of adults under the age of 30 invest in stocks. When Bankrate asked “stock avoiders” why they don’t invest, the most popular response was that they don’t have enough money. Another reason why so few millennials invest is because they don’t know where to start. The idea of making investments can be intimidating, but apps like Acorns make investing more affordable and accessible. Users can invest a few dollars (or even a few cents) at a time. Instead of having to go through a broker and paying commission, they can make investments with a few swipes on their phones.

Acorns was founded in 2012 by Jeff and Walter Cruttenden, a father and son duo. According to CNN Money, the Acorns app has about 650,000 users, most of which are millennials. They have saved a combined $25 million since the app launched in August 2014.

It’s surprising how much spare change can add up to. What are you doing with yours?

Screenshots courtesy of Acorns media resources

Update 7/8/15: Acorns is now free for students! Students who sign up for an Acorns account with their .edu emails no longer have to pay monthly fees.