06Jun

Banks are awash in money as consumers at record rates socked away the money they didn’t spend during the early stages of the COVID-19 shutdown.

Mass Mutual survey discovered one in five of us put away at least $1,000. An ambitious 10% say they’ve saved more than $5,000 since the start of the pandemic. So much money has poured into the nation’s banks that the FDIC’s Deposit Insurance Fund fell below the statutory minimum.

The Federal Deposit Insurance Corp. guarantees money on deposit at insured banks up to $250,000. The fund is financed by fees paid by insured banks, based on their deposits, size and other factors.

Typically, when the fund falls below the required 1.35% of insured deposits, it’s because of bank failures. But in this case, the amount Americans saved during the early weeks and months of the pandemic grew so fast the ratio of the $114.7 billion fund to total deposits fell to 1.3%.

The FDIC called the influx of savings “extraordinary.”

“An unprecedented inflow of more than $1 trillion in estimated insured deposits in the first half of 2020 resulted mainly from the COVID-19 pandemic, specifically monetary policy actions, direct government assistance to consumers and businesses, and an overall reduction in spending,” said the FDIC.

The Mass Mutual survey found 46% of Americans spending less than in the past. Many spent more on food deliveries and streaming services, but almost two-thirds spent less on vacations. A majority (53%) reduced spending on day trips. Weddings, summer wardrobes and beauty care were also areas where a high percentage said they’ve reduced their spending.

Most of those who cancelled their summer vacation saved the money in one manner or another. A third put it away hoping to take a vacation later this year. 30% put it into their regular savings account; 15% added it to their emergency fund.

Among the 34% of Americans who saved at least something, 55% said not taking a vacation or doing any traveling helped them save. Many also said not going out at night, eating at home and skimping on personal care and clothing were other ways they saved.

What do they expect to do with the money they saved? 40% plan to hang on to it as an emergency fund. One-in-five will use it for necessities, to pay down debt and to eventually travel.

And when the COVID pandemic is over, 26% said they’ve developed new spending and saving habits which they plan to keep.

Photo by Austin Distel on Unsplash

[bdp_post_carousel]

author avatar
Green Key

Here’s Where to Look For News

In the fast moving world of alternatives, one of the challenges is not just staying on top of the financial news, but trying to be ahead.

There’s no shortage of information. Fund managers employ highly-paid analysts using sophisticated computer programs and artificial intelligence to sift through the firehose of news and data to detect actionable patterns and trends.

But when professionals (and more than a few investors) look for news about what others are doing, how they’re performing, competitors, and trends and developments in the world of alternatives, they rely on the many online blogs and publications to stay up-to-date.

Especially for newcomers to field, knowing which are the best, which are the must reads, is not easy. Just identifying blogs specific to alternatives is time-consuming. Fortunately, a few sites have done the work.

From the various lists, we pulled five that appear among the top on each of the sites we consulted. We’re not saying these are the best or the top sources for information about alternatives or hedge funds – though each is newsy, current and well trafficked. Make that decision yourself.

  • CNBC – Provides breaking and other news of the sector. Though many posts are limited to paid subscribers, articles are exclusive and detailed.
  • HedgeWeek – Part of the Global Fund Media Ltd. network focusing on hedge funds. Oriented toward providing industry news with multiple daily updates. Other features: newsletter, special reports, webinars.
  • Opalesque – In-depth and detailed news and commentary on hedge funds and alternatives. Well-regarded and highly knowledgeable, sponsors roundtable discussions among fund managers and investors discussing issues and trends. Limited free subscriptions.
  • Preqin.com – Not a traditional blog, but a data and research provider covering the full range of the alternatives sector. Some of the research is free to registered subscribers. Especially useful are quarterly reports and Preqin Insights posts.
  • Hedgeco.net – Its primary value lies in its database of hedge funds which includes detailed, if not always completely current, information about thousands of funds and managers. The sites includes some news of funds and managers. Free subscriptions are available.

Some others to review:

  • The Hedge Fund Journal – An online magazine of the industry.
  • Risk.net – Not exclusively about alternatives, the site covers risk management, derivatives and regulation with a section devoted to hedge funds.
  • AllAboutAlpha – This is the blog of the Chartered Alternative Investment Analyst Association. Not a news site, the blog includes a broad range of issue-type articles, analysis and commentary by a variety of industry professionals.
  • ManagedFunds.org – The blog of the Managed Funds Association, a trade group.
  • Hedge Fund Law Blog  A service of the Cole-Frieman & Mallon law firm.

Photo by Markus Spiske on Unsplash

[bdp_post_carousel]

author avatar
Green Key

A Computer Knows FIFO and LIFO. Only You Can Do NIFO

Just when you thought you had inventory accounting under control, here comes NIFO.

Where LIFO and FIFO are at least sort of intuitive, standing for Last In First Out and First In First Out, NIFO stands for Nose In, Fingers Out.

Huh?

Don’t worry, no accountancy board has adopted NIFO as any sort of standard, and none will since it’s a leadership guide to remind managers to, as Accounting Today explains, “lean in and be helpful (nose in); be a mentor, not a micromanager (fingers out).”

Wondering just what this has to do with accounting?

“NIFO is about providing guidance so a client (or member of your team) can make their own decisions about how to solve a problem or get things done,” writes Kyle Walters, author of The Personal CFO and partner at L&H CPAs and Advisors.

Addressing accounting firm managers and executives, Walters says, “Your job as a leader is to lean in and help people work through a problem without sticking your fingers all over their business.” In other words, accountants should consider themselves a member of the board of advisors for their clients.

It’s the responsibility of an advisor, Walters says, “to provide perspective and to ask the management team insightful questions to help the organization solve its own problems. You are not supposed to interfere with day-to-day operations.”

Apply the same thinking to the members of your firm and your team, he adds.

“As a leader at your firm, NIFO means helping your team members become problem solvers. You’re helping them think through problems.

“Don’t just give them the answer the way a micromanager does; make them come up with the answer.”

“This mindset,” Walters insists, “is more important than ever in today’s work-from-home era when managers are rarely in the same office as the people they supervise.”

“LIFO and FIFO can be handled by computers these days. Your new job is NIFO.”

Photo by Volkan Olmez on Unsplash

[bdp_post_carousel]

author avatar
Green Key