“Don't call it a comeback / I've been here for years.” – LL Cool J
The U.S. service sector expanded in July at its fastest pace in five months. The Institute for Supply Management (ISM) reported that its service index rose to 56 last month, exceeding economists' expectations for 53 and a significant improvement over June's 52.2. A reading above 50 indicates the sector is expanding.
Marsh recently published its 2013 Captive Benchmarking Report, analyzing 886 captives for benchmarking analysis, representing approximately 15% of all captives globally. One key finding is that more than half of the investments made by captive insurance companies consists of loans to their parent companies, a growing trend since the economic downturn of 2008 when captives were heavily invested in equities. The motivation behind intercompany investments with the parent entity or affiliates is to minimize the cost of capital employed in the captive and enhance the parent company's liquidity. Additionally, the parent company has greater control over the captive’s invested assets.
Since 2008, we have seen an epic fund flow out of domestic equity mutual funds (-$537 billion) into bond funds (+1.09 trillion). This trend has been consistent and unrelenting.
The U.S. Service Sector is not only the economy's most diverse sector, it is huge – employing 90% of the workforce. Service workers are the highest paid and best educated, and they are the lowest paid and least educated. The sector encompasses neurosurgeons, college professors, delivery-truck drivers and dishwashers.
The United States Census Bureau published an interesting study entitled “1940-2010: How Has America Changed?” Looking at the American workforce, we see that it has more than tripled in the last 70 years with a major industry shift from jobs in manufacturing and agriculture (41.9%) to service jobs. This mega trend is unlikely to reverse any time soon.
I am honored to be included in Katie Rass' (ThinkAdvisor) monthly feature of 15 Best Finance Tweets for the month of June.
By Jennifer Calonia
June 20, 2013
Everyone views smart financial practices differently, and what's an effective strategy for one parent doesn't necessarily work for another. While there's no official rulebook, consider these five ways parents can become better financial role models: