Corporate Profits

Let’s talk about profits and specifically corporate profits. You know we often hear if you’re watching some of the financial shows or News stations and they talk about earning seasons and companies are reporting their earnings and all of this. And maybe you’re sitting there and what is that? Or why is that important to me? You know as consumers, you and I, we don’t really want corporate profits. We want to get a deal, right? We want to walk in and we buy this stuff. The best deal we can and get it at a low price. And we don’t care if those businesses make money or not off from our transaction, because we’re getting a deal, right? But as an investor, we want corporate profits. You know we’re investor in these businesses. If you’re buying stock or anything like that, we want these companies to have profits because we want our investments to grow, right? Let’s scale it down real simple. Let’s say you own a small business. Let’s pick anything, an ice cream shop, right? You buy goods, you buy materials to serve up your ice cream cone. Well you have to make a profit on that, right? So you want a bigger profit so you can put more money in your pocket. Maybe you want to hire staff. Maybe you want to expand, stuff like that. You need profits to have a successful business to do this. Just like when we’re investing, we want these corporations to be profitable. Now what can a corporation do with profits? Well they can reinvest it back into the business, right? They can hire more people, build new locations, expand research and development, all that sort of stuff. They can buy inventories. They can increase their goods, right? Or they can maybe pay dividends and they can give it back to shareholders and investors. So again, we want to see profits from these businesses so we can do that. Now oftentimes you hear them then talk about forecasting or looking ahead. So they’re then taking what they know they’ve done in the past, what they’re looking at maybe from a cycle or marketing that they have going on and looking ahead to see maybe what their forward looking profits are going to be. And so that may lead investors to invest or want to sell their investments because maybe that company isn’t going to be so profitable. So again, why are we talking about this today? Well if you have a 401K, an IRA or any investment, you want to see the companies that you are invested in as profitable in there. Oftentimes, people say well, I don’t even know what I’m invested in. That’s a problem. You should know. You should be educated and understand what you have and why it’s in there and how is that meeting your goals? So for you out there and if you are an investor, you’re coming into retirement or already early retired, we’d love to sit down and talk to you. Why not give the yourself a chance to meet with us with our free, no obligation visit and we can walk through these things. We can walk through your individual investments and talk about how they relate to you. And talk about these underlying things. Are they doing well or are they not? And if they’re not, what adjustments can you make to your portfolio to make sure you’re better aligned so you can plan to retire well.