Given that most Americans grow up with little or no idea of how to save, budget, or spend money, it might be a good idea to ask why.  It begins with the family but discussing money in this country is as uncomfortable as talking about sex.  That needs to change and it starts with our children.

"My kids were taught about personal finances as part of their school curriculum, but it went in one ear and out the other," said one hard-working client, who called asking for advice on how to teach his teenagers the value of money.

Although the majority of states now mandate some kind of classroom training in finance, most students fail to "get it." Children learn best when they apply what they've learned to their daily life, especially when it concerns their own money. If money is a taboo subject at home (and in most homes it is not), than managing one's money, no matter how little, simply becomes a hopeless task.

Yet kids are naturally curious about money. Last year, T Rowe Price, a global financial company, polled parents on the subject and learned that 37 percent of children asked their parents "how much things cost." Another 29 percent asked about an allowance, while 19 percent wanted to know where money comes from.

The majority of parents (77 percent) used their children's allowances as the main tool in family finance education. But there is a lot of controversy over whether kids should work for their allowances, just receive it as part of family environment, or get nothing at all.

Suze Orman, television's finance guru, believes that the word should not be part of the household vocabulary. Instead, children should be paid for chores. The more chores one does, the more one is paid, depending on the task and the child's age. This teaches a work ethic, she believes, while negating the allowance as their "due" simply because their best friend receives one.

On the other hand, an allowance for accomplishments above and beyond the expected daily chores (room cleaning, bed-making and other household chores) does help prepare the child for a future in the work place. Simply doling out an allowance to your kid, as many parents do, is no answer, since money never earned is money never valued.

The only way kids learn about savings, budgeting and spending money, in my opinion, is by practicing with money they have earned. But here is where the allowance concept falls down. Of roughly half the children who receive an allowance, in the survey, fully one-third spend it all and come back to their parents for more money. Eighty percent of the families polled in the study gave in to their children's demands. Is it any wonder that most Americans grow up to constantly live above their means? Even worse, only 1 percent of children save any money from their allowance, according to the American Institute of CPAs.

Most American families have never addressed sensitive issues like family debt or how much income their parents generated. When asked why that new bike won't be forthcoming, Mom and Dad simply say "no," or "we can't afford it." That is usually the end of the conversation. In my next column, I will discuss some methods you can use to further your children's (or grandchildren's) concept of money, while also teaching them how to budget and save and spend wisely; so stay tuned.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

New highs followed by some selling, then a little back and fill, before climbing to yet another new high. That's the environment we are in and it happens to be a great recipe for making money in the stock market.

The last few days are a great example of what I'm talking about. Last Friday, the Nasdaq finally breached the 5,000 level. Now there was nothing magical about that number. It's round and the media decided to use it as some sort of goal post for the technology index. As I predicted in recent columns, the Nasdaq scored that touchdown and then this week, promptly fell back 40-plus points. The other averages sold off in sympathy and here we sit in yet another trading range.

The media needs to manufacture a reason why markets move and sometimes those reasons can be full of contradictions. Friday's non-farm payroll data is a case in point. The employment gains surprised investors. The cold snap in the Northeast had many economists looking for weaker job growth. U.S. payrolls actually came in much higher at 295,000, versus a mean estimate of 235,000 jobs. One data point does not a trend make, but if you look at the three-month average of 288,000 job gains/month, the employment data is clearly rising.

That puts the unemployment rate at 5.5 percent, down from 5.7 percent, even though the month to month rise in wages is still fairly anemic. Nonetheless, those are good numbers and combined with the continued low price of energy, should convince most investors that this economy is doing just fine. Why, therefore, did the stock market sell off?

We are in one of those periods where traders have decided that good news is actually bad news. Stronger job growth, to them, means the Fed is going to raise rates sooner than later. Duh, hasn't the Fed already notified us that they plan to raise short-term rates sometime in mid-year? Whether that happens in June or September is immaterial, but traders insist on trading every data point as if it is meaningful. Don't you fall for it.

The point to focus on is that all of this trading to and fro is simply noise. Understand that we are now in a new trading range on the S&P 500 Index, somewhere between 2,085 and 2,115. And like previous trading ranges, this one represents a higher low and a higher high from the previous range. If you look back through the last 12 months, time and again, you could identify the same type of trading behavior. The moral of this story is that as long as the markets continue to exhibit this kind of behavior we are all in Fat City.

How long before the next move higher? I wish I knew. Sometimes trading ranges are short-lived, a week or two. At other times, they can last for months. After all, stocks go sideways better than 60 percent of the time, so patience is a real virtue when it comes to investing. Historically, March and April are up months in the stock market. Odds are this year will be no different. What you need to understand is that in this kind of stair-step market, you simply hunker down and wait for your rewards.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

The global market for smoothies is projected to hit $9 billion this year. Driven by a new health-consciousness among consumers, today's on-the-go convenience of gulping down your vitamins and minerals is appealing to more and more of us. Expect that trend to continue.

From a niche market in America in the '90s, the industry here at home has grown to over a $4 billion market today, which makes the United States the dominat domicile of all-things smoothie. The sector is forecasted to grow 10 percent a year for the next five years, according to Research and Markets Group, an analytical business group. Food chains, service restaurants, beverage companies and consumers, not to mention the dozens of smoothie franchises, have made the fruit and/or vegetable drink as ubiquitous in America as McDonalds or Starbucks.

For many consumers worried about obesity, eating right and living longer, the convenience of gulping down your daily FDA minimum requirements of fruits and vegetables can be a strong selling point. It sure beats the pants off swigging down gallons of unhealthy soda.

Most of us consider smoothies a healthy but a sweet snack consisting of fruit and possibly yogurt or other ingredients like peanut butter or soy milk. The most convenient (and cheapest) way to make the drink is by using frozen fruit. Frozen fruit sales in the U.S. now top $1 billion a year, which is up 67 percent from five years ago, according to Nielsen. Sixty percent of that fruit went into making smoothies, which is up from just 21 percent back in 2006.

The making of smoothies goes back to the 1930s, '40s and '50s with the invention and use of both blenders and refrigerators. Smoothies became associated with the health food industry in the '60s through people like Jack Lalanne, the renowned health and fitness guru, who was one of the earliest advocates of juicing and nutrition. Today, with the trend toward organic and natural foods, smoothies have come into their own.

My own experience with smoothies is now two years old. I started with my old blender making a combination of fruit and vegetables drinks, but soon found that my tried and true blender wasn't cutting it. In search of the same consistency and flavor as a store-bought smoothie, I moved on to a popular smoothie-maker, which cost me a bundle. Still not satisfied, I stepped up once again and bought an even more expensive brand with a powerful motor. If I am an example of a typical smoothie consumer, no wonder that blender sales in America have grown 103 percent since 2009.

Today my wife and I consume at least one a day, combining both fresh vegetables and fruit. I will admit that making them can be time consuming and depending upon the ingredients, expensive. As such, you can usually find me in the bruised fruit and vegetable corner of my local supermarket. I usually make enough to last us at least two days. It gets better.

My company, thanks to my constant urging, decided to buy an almost-industrial smoothie maker. I have become the official "Smoothie King" in the office. It helps that just about all of us here are health nuts, extremely busy and concerned with our weight. As such, we are typical Americans.

As more and more commercial players move into the business, competition is emulating the differentiation that has been so successful in the coffee market. Now, we are being tempted by "Super Smoothies," made with antioxidant-rich super fruits like goji berries or super foods such as chia and flax seeds. Tropical fruit and tea-flavored concoctions are now common at most juice bars and cafes. Pre-made and bottled smoothies are also popping up at many local supermarkets.

If you haven't dipped your taste buds into the smoothie world as of yet, I suggest you do. The health and weight benefits are substantial and they taste great to boot.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.
 

The major averages made all-time highs again this week, except the Nasdaq. It is just a matter of time before that tech-heavy index joins the party. But what happens after that?

The short answer is that we go higher, maybe not right away, but soon. January, you may recall, was a down month, which was similar to last year. This month saw a recovery followed by higher highs just like last year. If the trend versus last year continues, we should see further gains in March, possibly fueled by more demand from overseas investors.

Given that the United States is the only game in town for bond buyers, if off-shore investors want yield and safety, we should expect to see a continuation of demand for our bonds. That should keep interest rates low and stock prices up. If so, we should expect to see a broadening out of stock market participation, which is usually a bullish indicator.

I've noticed that while the S&P 500 Index, the Dow Industrial and Transport averages, the Russell 2000, the Nasdaq 100 and the Mid-cap  S&P 400 are all above the 2007 highs, one of the largest indexes around has lagged the party. I'm talking about the NYSE Composite Index of 2000 listed stocks, including REITs and ADRs (American Depositary Receipt) of foreign companies. This is a big index and about 25 percent of those stocks represent foreign companies.

It appears to me that the NYSE Composite is getting ready to play catch-up with the other averages. Although I am not sure, one reason this index may be lagging is due to the underperformance of the foreign components of the index. However, thanks to central bank quantitative easing in both Europe and Asia, a number of foreign stock markets are starting to participate in the U.S. rally.

In fact, so far this year some foreign markets, such as Japan and parts of Europe, have outperformed our own stock market. This could continue as the impact of monetary stimulus begins to take hold within their economies. That could set us up here at home for even further stock market gains in a virtuous circle.

Does that mean that it will be smooth sailing from now on? Not likely. Although I am confident that the Nasdaq will break its old Dot.com high of 2000, investors should then expect a bout of profit-taking. If we look at the short-term conditions of the market, I would say that almost all the averages are over bought and are due for a pullback, but that's exactly what we long-term investors want to see.

Two steps forward and one step back is a concept that my longtime readers are familiar with. In bull markets, like most of life, there are good times, followed by a little disappointment, and then more good times. That is the kind of stair-step market that I believe we are enjoying right now. There will be plenty of reasons for why the markets are too high and should be sold — slow growth, lower earnings, fear of higher interest rates, etc. — but these will be sorted out and stocks will climb higher after some profit-taking.

In my mind, the party isn't over until the fat lady sings and nobody I see is even overweight. For those of you who want a bit more beta in your portfolio, you might want to add some overseas investments, but remember risk and reward. You will be betting that despite poorer economic fundamentals, overseas markets will play catchup with our own stock market. If you are wrong, what gains you might make here could be lowered or even erased by losses overseas. As always, it is your choice.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

The Department of Labor is trying again. This week, a proposed new rule, backed by the president, would force all financial advisers to adopt a "fiduciary responsibility" toward their clients when overseeing retirement plans. If passed, it could substantially reduce the fees and expenses we pay for that advice.

So exactly what is this fiduciary responsibility that President Obama is championing? The rule would require all advisers to put their client's interests above all other considerations when making investment recommendations on accounts covered under the Employee Retirement Income Security Act. That means the bulk of middle class savings represented by all types of IRAs, 401 (k)s, 403 (B)s, pensions, et al. would finally be protected from the present practices of gouging Americans through investing them in high-priced, low-return investment vehicles.

"But I thought that was already the law," said a New York client, on hearing the news.

Actually it is not. Unless you work with a registered investment adviser, most financial advisers on Wall Street are simply required to suggest products that are "suitable" to investors. In practical terms, all that means is that a broker can't put your uninformed, 92-year-old granny into a foreign penny stock that fluctuates 10 percent or so on a daily basis. Anything else is fair game and the industry has taken advantage of that suitability rule to rake in billions over the years from you and me.

It is estimated that over the course of 25 years of saving for retirement, the average investor will pay one-third of his or her assets in fees and expenses. The White House Council of Economic Advisors estimates that these conflicts of interest cost the investor 1 percent, or about $17 billion, per year.

These legal (but less than moral) practices of the financial community have been a pet peeve of mine for years. In my columns, I have repeatedly written about these pitfalls and how my readers could avoid them. Back in 2010, when the Department of Labor suggested this rule, Wall Street, the GOP and the SEC successfully shot down the proposal arguing that a tougher fiduciary standard would prove so costly that small investors would not be able to afford investment advice at all.  I say, why pay for investment advice that only enriches the broker that gives it to you in the first place?

I'm not saying that everyone in the financial sector who is not a fiduciary is a bad guy, because they are not. It is the system that is at fault. The early '80s saw the end of an era of fixed commissions for Wall Street brokers. Since then the way brokers managed to earn a living was to acquire as many clients as possible, while making as much money as one legally could through fees, commissions and revenue-sharing kickbacks from other vendors like mutual funds, insurance companies and annuities.

The fiduciary rule would change that model substantially and it would be expensive to implement and oversee. One's compliance department, like my own, would need to oversee that rule and ensure that client's interests were always placed above the company and individual's interests.  It is certainly doable. My company has a fiduciary responsibility to our clients and enjoys a good bottom line while fulfilling the letter and the spirit of that rule.

Wall Street, in my opinion, could fulfill a fiduciary obligation and still make money — just not as much. The quality of personnel that interface with clients would have to improve and many lucrative relationships with their existing vendors would have to change as brokers pursued the best investments possible at the lowest costs. I, for one, believe this rule is long, long overdue. It's about time the government and the White House put their money where their mouth is when it comes to the little guy.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.