Have you noticed that you are buying more products via the internet? Do you find yourself showroom shopping when you do make the trip to that department store or mall? It is happening to all of us and as it does, the traditional brick-and-mortar retailers are feeling the loss.

That doesn’t mean the demise of malls or department stores altogether, but over the next decade there will be fewer of them, especially in depressed areas of the country. The main culprit in this story is e-commerce or internet shopping. In the first quarter of this year, e-commerce accounted for $74.9 billion. That might sound like a lot of money but it still only accounts for 7 percent of overall consumer spending in this country.

Still, online shopping has taken market share every year since it began and is growing at roughly 8 percent per year. Its main attractions are convenience, lower prices and increasingly, free shipping. Clearly, without the overhead costs of physical storefronts, e-commerce companies such as Amazon can undercut traditional retailers at every turn. As more and more internet retailers develop huge logistics networks around the country, it will become both easier and cheaper to ship to their customers.

Wall Street analysts are quick to predict the demise of malls, shopping centers and department stores. They estimate that the brick-and-mortar crowd will need to close as many as 20 percent of their stores nationwide in the future. Weaker retailers (like Sears and J.C. Penny) will bear the brunt of shuttered shops.

Although traditional retailers are fighting back with their own e-commerce efforts, they find that when they close a storefront, what e-commerce traffic they had before the closing also declines. That generates a double whammy to their bottom lines. Despite that fact, most brick-and-mortar retailers are forging ahead in establishing their own e-commerce businesses.

In addition, they are establishing "loyalty programs," which reward the shopper by discounting merchandise. They are also issuing their own credit cards with various bonus schemes attached to how much you purchase on those cards. You may have also noticed that in certain stores there are more and more interactive or digital displays for comparison shopping on the spot. Other stores have developed entertainment for the kids while the parents shop as well as eateries and other efforts to enhance the experience of your shopping trip.

So don't play taps for traditional retailers just yet. There are also some things an online website just can't replicate. You can't, for example, touch and feel a product before buying it on the internet. That doesn’t stop someone like me from checking out the product and price in the store and then buying it on the internet anyway. That's called the "showroom effect." In my own case, however, if the store has a knowledgeable and professional staff, depending on the product, chances are that I will buy it in the store anyway.

Higher-end retail stores and malls will continue to thrive, in my opinion, as they meet the challenge of the internet. Just check out your neighborhood Apple emporium to get a taste of what the future brick-and-mortar stores will look and feel like. The experience will be worth the trip for many. And let’s not forget the social aspects of shopping, at least for those of the Baby Boomer generation. One elderly client I recently talked with admitted that he loves shopping and enjoys wandering the aisles checking out new and varied products.

I imagine that there are people of all ages that still "hang out at the mall" or just visit the brick-and-mortar storefronts for a day of shopping; but the younger you are, the less likely that you will want to spend time doing that.

In summary, there is still going to be room for both clicks and bricks kind of shopping in the future. At least until the likes of Amazon can somehow bring virtual reality shopping into our living rooms. Don't laugh; I wouldn't put it past them to be working on something like that right now.
 

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 vote is in and all you have to do is look at world markets to discover the verdict. The citizens of the United Kingdom voted to exit the European Union. Chaos reigned for today but tomorrow may be a different story, at least for U.S. investors.

Do not panic. Most of my readers are heavily invested in the U.S. equity and bond markets. As such, the fallout from Brexit will be short-lived here at home as investors come to the realization that, for now, the United States is the only game in town. As I look at Friday morning's damage to our markets, I am impressed at how well we are doing compared to Europe. Essentially, all we have done is give back a week's speculative gains on the back of Wall Street's totally incorrect view that Britain would remain in the EU.

Europe, however, is, and will be another story. As I mentioned before, the UK was the European Union's second largest economy (although it never agreed to use the Euro as its currency). Think about it. Your second most valuable player leaves the team. What are the odds your team continues to have a winning season? Clearly, the European economy is going to take a hit from this event. To make matters worse, it is just coming out of recession as we write this.

Then too, what will the exit of one of your MVPs mean to the rest of the team? In this case, nearly every member state of the EU has a political party or organization that is lobbying for a referendum to leave the EU. Here are some of the countries at risk with the percentage of voters wanting a chance to vote for their own exit: Italy (58 percent), France (55 percent), Sweden (43 percent), Belgium (42 percent), Poland (41 percent), Spain (40 percent) and even 40 percent of Germans, the EU's largest and most stable partner, want a chance to vote and possibly bolt the union.

But not all will come up roses for some U.S. companies. There will be repercussions that could hurt our largest multinational corporations as a result of Brexit. Many U.S. companies have invested in the UK partially because of their free-trade access to the rest of Europe. It would be like a Japanese company building an auto plant in Mexico in order to take advantage of our NAFTA agreements with Mexico. We might find that these companies will face a large decline in profitability on their UK assets. The US financial sector may also go through some rough times for the same reasons.

There is no question that this breakup will cause disruptions throughout Europe and reduce mutual trade and financial flows. Remember that an exit will take at least two years to implement. I have long said that markets can deal with the good and bad, but can't handle uncertainty. Imagine this upcoming period of extended uncertainty. It will most assuredly reduce corporate and investor confidence abroad.

Trade agreements will need to be renegotiated among the EU and with the rest of the world. In the case of Great Britain, where trade accounts for over 50 percent of this island nation's GDP, everything will have to be renegotiated. That will take time and a lot of it.

Optimists point out that there are countries in Europe that have done well without inclusion in the EU. Switzerland is always most pundits' prime example. The problem here is that the Swiss economy is only a fraction of the size of Great Britain, so it is like comparing apples to oranges.

Currencies will also be a problem. Volatility will reign supreme in currency markets as traders and corporations try to hedge this new element of risk in the world. The U.S. dollar may strengthen. It certainly has today, and, if so, that too may cause problems for our export-oriented companies. One thing is sure; volatility is here to stay for the foreseeable future.

Hopefully, you took my advice over the last few weeks and reviewed your own risk tolerance because the heat is certainly rising in the kitchen. The U.S. is the best game in town and as such you are in the right place at the right time.

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.

Whether you are adopting a pet or buying that pure blood breed, the first thing you should consider is pet insurance. Skipping this step could cost you several times the purchase price of your new pet each year. Better be safe than sorry.

Pet insurance is like any other insurance, human or otherwise. The cost of coverage is based on your pet's age, health profile, breed and however much insurance you want to purchase.

You will pay a yearly premium, have a deductible, co-pays and a maximum cap on how much your insurance covers per year.

The best time to take out insurance is before your pet develops health problems. Learn from my mistakes. In my case, Titus our seven-year-old, chocolate Lab, developed arthritis in his right shoulder two years ago. It is a common and chronic health problem among Labs (as is arthritis of the hips), and has cost us several times his purchase price over the years. Even though I could still buy insurance for him, it would make little difference since the policy would not cover pre-existing conditions such as his arthritis.

If you plan to adopt an animal, my advice is to get a clean bill of health from the shelter, adoption agency or veterinarian prior to bringing it home. Otherwise, you may be stuck with an existing condition that will drain your bank account for as long as you own the pet. A common mistake would-be pet owners like myself make is ignoring the emotional attachment that develops between man and beast.

I am a dollars and cents kind of guy and convinced myself that once Titus' health bills passed a certain plateau, it would be time to put him down from an economic point of view. That plateau has come and gone many, many times and Titus is still very much part of the "family."

He will be with us no matter the cost until he dies. So much for my cold calculated strategy, I just wish I was smart enough to buy insurance seven years ago when it made sense. Learn from my mistakes.

You need to decide how much insurance is right for you. Skin problems are the largest source of health claims for dogs with minor issues averaging $210 a visit while benign skin masses were higher at $347 per visit, according to a 2015 analysis of pet insurance claims.

Diabetes ($862/visit) and urinary tract infections ($441/visit) led the list for health claims for cat owners.

Like every insurance policy, there is a ton of fine print that you must wade through. Your job is to identify and understand what is excluded from coverage. Be sure you identify any waiting periods before the particular insurance policy kicks in. For example, some dogs develop ligament injuries quickly, but you may find that those kinds of injuries have much longer waiting

periods than other health issues.

Every policy has "extras" and most of them concern wellness issues — annual checkups, vaccinations, even teeth brushing. Carefully compare what those services would cost on their own outside of insurance before buying them.

Finally, make sure you comparison shop before settling on one plan. Every insurance company charges different rates for coverage. Some offer discounts if you cover more than one pet, for example. Deductibles may be lower on one plan, but check what kind of reimbursements you will be receiving. Some companies reimburse a certain percentage of what your vet charges you, but others only give you back what they deem to be "usual and customary" for the cost of a particular treatment.

Bottom line: pet insurance can save you a lot of money, if it is purchased properly and at the right time. It should be your number one agenda right out of the gate after acquiring your pet.

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.

Despite all the algorithmic programs, high-powered computers, enormous capital and worldwide connections, what happens in the investment world sometimes comes down to a coin toss. The British vote next Thursday to stay or exit the European Community is shaping up to be one of those binary events.

Have you noticed that there are more and more of these kinds of events in the world?

Remember the U.S. government shutdown, the Greek Referendum, the TARP vote, the German bailout votes for Greece, the vote on Spanish austerity? These are just some of the either/or occasions that sent global markets up or down in double-digit moves.

If you listen to some of the big brokers, they are predicting as much as a 15 percent decline for the U.K. stock market (the FTSE 100) if a Brexit occurs. But if they stay, you could see as much as a 14 percent rise in the same index and an even larger rebound in the European markets. On the bright side of this contest, look at it this way: for once you have the same chance to be right (or wrong) on the outcome as the big guys.

By the way, remember my prediction that volatility was going to rise this summer? In less than two weeks the VIX, which is an index that measures volatility in the markets, has risen by 40 percent! Hang on to your seats, readers, because we still have until next Thursday before this soap opera plays out. However, while the world ignores everything else but the Brexit outcome,

I'm on to other things.

This week's FOMC meeting and Chairwoman Janet Yellen's press conference afterward really surprised me. Although the Fed always couches their words in financial speak, technical jargon and just plain poor English, in essence, the message I received was that further interest rate hikes are off the table at least for the foreseeable future.

Two weeks ago I predicted a June rate hike was a non-starter, but I still expected a hike sometime later, maybe July or September. While mumbling about global risks (Brexit) as a reason to delay any action, Yellen admitted that some of the economic forces that are holding back the economy and a rise in interest rates "may be long-lasting and secular."

Slower productivity growth, as well as the retiring Baby Boomers in this country and in other aging societies, who will spend less, and save more will drag down growth. Yellen said that these are "factors that are not going to be rapidly disappearing but will be part of the new normal."

These are arguments that former Treasury Secretary Larry Summers, who was in the running for Janet Yellen's job, have been arguing for some time. He believes industrial nations are caught in a swamp of secular stagnation where economic growth will be at best moderate.

If Summers, and now Yellen, are right in their assumptions (and both are a lot smarter than I), this change in outlook should have some predictable outcomes. For example, the U.S. dollar should trade in a range, or even fall at least until that time when a rise in U.S. interest rates is a real possibility. St. Louis Fed President Jim Bullard, a leading "hawk" on the Fed's board, said in a white paper today that low GDP growth (2 percent) and an even lower Fed funds rate will likely remain in place at least until to 2018.

It would seem to me, given past investor behavior, that this kind of environment will force more and more retiring Baby Boomers into the stock market in search of better yields and price appreciation. It augurs well for higher stock markets worldwide, since they will be the investment of last resort in an environment of secular stagnation.

However, the downside is that investors will need to temper their expectations of what they can expect from stocks. Single-digit returns will be the best we can get unless one wants to wander further afield to regions, countries and asset classes that may offer higher returns as well as risk. More on that later, but for now, if the UK does exit the EU, investors can expect a continuing high degree of turbulence within the markets.

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.

At this time next week the results of a United Kingdom referendum on whether or not to leave the European Union will be announced to the world.

The polls are too close to call and the odds are changing every day. For the past several days equity markets worldwide have been selling off in fear that the Brits will vote yes to a Brexit. Why so much angst over one country leaving the EU?

The obvious concern is that if one nation decides to leave, how many other nations will follow suit? And if they do, the chances that Europe's currency, the Euro, survives would be dicey at best. That's a big deal since it is the second-largest trading currency in the world after the U.S. dollar.

As the days grind on, the predictions of doom and gloom have escalated. As they do, investors have run for the hills. Even our Federal Reserve Bank has decided to postpone any interest rate hikes for the foreseeable future as a result of the uncertainty this event has generated.

The departure by Britain, the second-largest nation in the community after Germany, would deal an economic blow to one of the three largest regions on the globe. The EU can ill-afford that kind of downside since it has been struggling for years to climb back from the abyss created by the financial crisis of eight years ago. Despite herculean efforts by the European Central Bank to jump-start the region's economy, so far, the results have been mediocre at best.

Struggling countries such as Greece, Spain and Portugal, for example, have already expressed disappointment (and even outrage) at the treatment they have received by EU authorities. And more and more of Europe's citizens have grumbled about the viability of continuing in the EU.

The International Monetary Fund has warned that if the UK decides to exit, it could cause severe implications for their economy and that of the EU's other member countries. Other nations, including the U.S., have warned that an exit would create an entire basket of problems from defense to trade and immigration.

Clearly, there are pros and cons of exiting the EU for Britain. There is a perception among the English that the rewards for giving up some of their sovereignty to Brussels, the seat of EU power, have been found wanting. While the EU spews out mountains of new regulations, rules and guidelines per year, say the Exiters, the United Kingdom's representation on any vote is less than 10 percent of the total.

Most Brits have no idea how and what laws are concocted in Brussels, but they feel that more and more of this legislation favors the largest multinational organizations, while hamstringing their small and mid-size companies. The country's Chambers of Commerce state that the total cost of this EU regulation is about 7.6 billion pounds/year.

Immigration is also a big issue that concerns Britain. The massive exodus to Europe's shores over the last two years by refugees from the on-going strife in the Middle East has burdened the resources of almost all members of the EU. The UK and Germany, thanks to the strength of their economies, are prime targets for these new refugees looking to start a new life.

The results have been a huge increase in immigration with the UK now hosting 2.3 million workers from outside the EU.

Since the UK is an island nation where over 50 percent of goods and services produced and consumed are dependent on trade, leaving the tariff-free benefits of the EU could be a substantial negative. It could also create a substantial hit to jobs as well as investment in the country. Pro-EU campaigners warn that Britain could lose as many as 3 million jobs, which are linked to trade with the EU. Given that London is considered the financial center of the EU, there is also a great deal of concern that finance and investment will revert back to mainland Europe on any exit from the EU.

Like our own presidential elections, separating fact from fiction in the Brexit campaign is difficult at best. Clearly, there is a lot at stake for Europe and by implication, the rest of the world's financial markets. My own opinion is that the impact, at least on the UK, will be at best short-term in nature. If they decide to exit, however, Europe's future may be a different and on-going story.

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.