It is official. We made a new high this week and the markets appeared to be in "melt-up" mode. So why is everyone cautious?

After almost two months of consolidation, the equity markets broke out once again, spurred by the knowledge that if the economy falters, the Fed remains ready to reverse course.

Yet, by Friday afternoon, the bears were fighting hard to ruin the party.

It was no accident, in my opinion, that Fed Chairwoman Janet Yellen's testimony before a Senate panel on Thursday was followed by a record-breaking gain in the S&P 500 Index. But by Friday afternoon, the benchmark index was barely holding its gains. True, not all the indexes have reached new highs. Dow Theorists won't feel comfortable until both the industrials and the transports also break out and confirm the gains in the other indexes.

Yellen, in her testimony, said that the central bank was studying the economic data closely. She said, "a number of data releases have pointed to softer spending than many analysts had expected. Part of that softness may reflect adverse weather conditions, but at this point, it's difficult to discern exactly how much. In the weeks and months ahead, my colleagues and I will be attentive to signals that indicate whether the recovery is progressing in line with our earlier expectations."

This is a departure from her upbeat comments over the last few weeks when she appeared more positive over the future prospects of the economy. So why did the markets go up? I believe investors assume that if the economy were to slow further, the Fed would reverse its recent tapering and some argue that the Fed might even inject more stimulus into the economy.

Readers may recall that I have been expecting to see a spate of disappointing numbers in the weeks ahead as the country continues to suffer from the impact of the Polar Vortex. Today's GDP data, for example, indicated the economy in the fourth quarter dropped to 2.4 percent versus 4.1 percent reported in the third quarter. Lower exports and consumer spending were the main culprits in the sluggish number.

My own belief is that once the country thaws out from this winter's deep freeze, activity will once again spurt higher. However, between now and then, the stock market may get spooked by fears that the economy is rolling over.

As for events overseas, specifically in the Ukraine, the markets have been able to absorb events without too much difficulty. Naturally, when tensions rise between Mother Russia and the U.S., one must pay attention to events. Vladimir Putin seems bound and determined to escalate the situation further but hopefully cooler heads will prevail.

There has been so much talk this week on whether the market is "topping" out that I have my doubts. I would stick with the game plan and remain invested. The worst that could happen is that we have another mild pullback and we fall back into a trading range.

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.

Money holds a great deal of power over us. For many, it is a symbol of worth, competence, freedom, prestige, masculinity, control and security. No wonder most of us have such a hard time talking about ours.

The psychological taboo of discussing money in this country had been identified and recognized as far back as the early 1900s by Sigmund Freud, among others. He wrote that "money questions will be treated by cultured people in the same manner as sexual matters, with the same inconsistency, prudishness and hypocrisy."

Recently an article from USA Today on the subject caught my attention. It concerned the anxiety most people feel when approaching financial advisers. The article was spot on, in my opinion. As an investment adviser myself, rarely does a week go by without my sitting down with an individual or couple to discuss their finances. Sometimes I feel like a therapist.

For the most part, at the beginning of most of my meetings with new individuals or couples there are few smiles and an air of tension. By the end, however, the sun has come out and the atmosphere has radically changed.

"You are not at all what we expected," said one couple recently.

I asked them why.

They confessed that they had been feeling a great deal of anxiety over revealing their finances to a stranger. It was hard enough, they confessed, to talk about money between themselves, but they worried what would happen if they shared this highly personal information with me.

"Everything you share with us is strictly confidential," I explained and I meant it. "Our privacy code is so strict that I won't discuss your information with anyone, even your spouse, without your permission."

In this case, the discussion allowed both of them to share a burden they were keeping to themselves with someone competent to help them work out their finances. We were able to pinpoint the problem areas in their finances and suggest several remedies.

Another client admitted that he feared that I would immediately judge him for either not saving enough or not making enough money. It turned out that he had done a magnificent job at both and I told him so. The point of hiring someone like me is to figure out how to save more or make more with the money you do have. There is no room in this business for judgment of any kind.

Others worry that by coming to me they will reveal their lack of knowledge of investment, finance and/or money management. No one likes to appear stupid and for many, finance might as well be written in Sanskrit. I do not expect anyone that comes through my door to be familiar with the subject. Why do some people think that because they may be an expert at whatever they do for a living, they must also be a whiz at finance?

So, how do I personally make prospective clients feel more at home with me? For one thing, I never "dress up" for my meetings. I left my three-piece suits, silk ties and wingtips behind when I left the canyons of Wall Street. It helps that I live and work in a rural community where few wear suits and ties. I dress like my client because it helps break the ice, puts me on an equal footing and dispels any image that I "come from money" just because I am a money manager. Besides, that's the kind of guy that I am, and any number of pin-stripes never helped me make money for my clients.

I also avoid "financial speak" at all costs. I talk like I write, in plain American, without pretensions or ten dollar words that no one understands. As for appearing stupid, I know you've heard it before, but in regard to your finances "there are no dumb questions except the ones you fail to ask." The moral of this tale is simple - seek financial advice at your earliest opportunity. In the majority of cases your anxiety will disappear almost immediately and the help that you may obtain will be good value for the money.

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.

Interest rates have been on a downward path for almost 30 years. In May of last year, thanks to the Fed's taper talk, that direction has reversed. This week it was revealed that some Fed officials are actually discussing when to hike interest rates.

The discussion took place late last month during the Federal Open Market Committee meeting presided over by the new Fed chairwoman, Janet Yellen. Like her predecessor, Ben Bernanke, Yellen appears in no hurry to raise short term interest rates and has told the markets as much. Most investors, guided by past Federal Reserve comments, are not expecting a hike in interest rates until the middle of next year at the earliest.

So why discuss it at all? Actually, for me, any discussion of raising rates is a fairly strong indicator that both employment and the economy are continuing to gain momentum and are expected to do so in the future. That needs to happen in order to justify the present levels of the stock market and any further advances equities may make.

I am sure that the same dissenting Fed members who, for years, have opposed further stimulus by the FOMC majority are behind this talk of hiking rates. These are the "inflation hawks" and if they had their way, the Fed's gradual tapering of stimulus would be accelerated from its present $10 billion a month decline to something more meaningful.

But moving the discussion from fewer stimuli to raising rates is a quantum leap in monetary policy.  I do not believe anyone at the Fed is seriously entertaining a hike in short term rates before the middle of next year.

In the meantime, over in the stock market a bit of profit-taking has kept the markets from achieving their objective. Recent highs are within sight. The S&P 500 Index actually came within 2.5 points of that target on Wednesday (and five points on Friday) before falling back. I would expect more of this kind of action before we reach and then break those highs.

Nevertheless, a new high will happen in the weeks ahead, but it does not mean that sunny skies lie ahead. There are storm clouds forming. Record highs will be met by more profit-taking, which will create more declines similar to the one we experienced in January. This year, as I have written in the past, will not be like 2013. There will be more volatility and more declines, although by the end of the year the markets will be higher than they are now.

So far, I see little to fret about. Investor sentiment has returned to a more reasonable level. The economic data, despite the weather effects, continues to show improvement.  The technical charts indicate we are still in a bull market so what is the worst that could happen here? At the worst, we may see another sell off and establish a new trading range once we hit a new high. We could meander up and down for a few months. That would not be unusual since stock markets go sideways over 60 percent of the time. If that is what the future holds, I’ll take it and be satisfied to simply buy and hold.  

In the meantime, over in the stock market a bit of profit-taking has kept the markets from achieving their objective. Recent highs are within sight. The S&P 500 Index actually came within 2.5 points of that target on Wednesday (and five points on Friday) before falling back. I would expect more of this kind of action before we reach and then break those highs.

Nevertheless, a new high will happen in the weeks ahead, but it does not mean that sunny skies lie ahead. There are storm clouds forming. Record highs will be met by more profit-taking, which will create more declines similar to the one we experienced in January. This year, as I have written in the past, will not be like 2013. There will be more volatility and more declines, although by the end of the year the markets will be higher than they are now.

So far, I see little to fret about. Investor sentiment has returned to a more reasonable level. The economic data, despite the weather effects, continues to show improvement.  The technical charts indicate we are still in a bull market so what is the worst that could happen here? At the worst, we may see another sell off and establish a new trading range once we hit a new high. We could meander up and down for a few months. That would not be unusual since stock markets go sideways over 60 percent of the time. If that is what the future holds, I'll take it and be satisfied to simply buy and hold.

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.

Buyouts and early retirement packages are increasingly becoming a part of the American landscape. Not a day goes by when some group of employees somewhere are offered financial incentives to retire early. If it happens to you, this is what you should consider.

Is this voluntary or a forced offer? If it is voluntary and you take it, you can't apply for unemployment benefits. Forced retirement is akin to a layoff, where you either accept the deal or else. Your chances of getting unemployment are higher under the latter circumstances.

Clearly, the largest single benefit of a retirement incentive is the upfront financial reward. These incentives are typically tied to the number of years of employment and can be either a lump sum or some form of annuity. The simplest rule of thumb is if you were planning to retire anyway in a year or two and the company offers you a two-year severance package that's free money and you should take it.

If, on the other hand, you were planning to work for another four or five years, you must weigh the benefits carefully. For many workers, the most important factor is whether or not the company offers health benefits. A study by Fidelity Investments found that a 65-year-old couple retiring today without employer-provided health benefits needs at least $200,000 to finance out-of-pocket medical costs. ObamaCare may reduce that number somewhat, but it will still be significant, especially when you consider things like Medicare premiums, co-payments and Medigap expenses.

Sometimes the first offer is not the final offer. If your company really needs these cutbacks, you may be able to negotiate better terms. You might be able to improve any health benefits, or include help in a job search or additional training. For some, early pension payments might be possible.

But what if you just love your job; can't imagine what you would do without it and can't afford to retire? Much will depend on whether the offer is a prelude to larger layoffs in the future or is purely voluntary.

There are risks in not taking an early retirement or incentive buyout package that readers should understand. If you have been singled out by your company, there could be a target on your back. If your company is in some financial difficulty and looking to cut back even further, your days could be numbered regardless of your decision. In which case, the first offer you receive is as good as it gets. The next wave of layoffs may find you unemployed with no incentive package at all.

This could also be a great opportunity, if handled right. You might be tired of working there and this could be your ticket to a new and better job. If so, start looking right away. The economy is picking up and job opportunities are better than they have been for several years. If you find a job quickly, this buy out could be just like a big bonus and an opportunity to invest it towards your retirement. Your new job does not even have to pay as much, thanks to your severance package.

For others, it could be the starting point for that business you always wanted to create. You may be old enough and with enough experience to become a small-business owner, even if you are the only employee. You might even offer to consult for your old company at a price. The point is that an offer is better than no offer at all. Treat this as a challenge and an opportunity, rather than the end of the world.

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.

What a difference one week makes. All the concerns that were ostensibly responsible for the stock market's 7 percent decline in January have already been forgotten. It appears investors are bound and determined to push the markets back to the highs.

The markets were up four out of five days this week. Clearly, by Friday, the averages seem to be running on fumes so a bit of a pullback would not come as a surprise. Several technical indicators are screaming overbought conditions. Yet, short sellers beware. It is going to remain very difficult to make any money betting against this market.

The question you may be asking is what happens once we regain the highs. Do we forge ahead or will there be a period in which the markets trade in a range? The likely scenario is a range bound market for a few months as the fundamentals catch up to the price level of these equity indexes.

This earnings season did nothing to heighten expectations that companies will be able to continue beating estimates. Less than half of all companies reporting so far have beat estimates. Most came in on the money, while a minority failed to live up to expectations. That would make this quarter's numbers a net neutral.

Naturally, just about every company that has disappointed has blamed the weather for their results. Even though this winter's brutal storms have definitely impacted American businesses' bottom lines, I suspect it is an all-too convenient scape-goat but it may give us hints to what is ahead.

Most economic data reflects what has happened in the past, so I suspect that we will see some disappointing numbers over the next month or two. There will be the usual debate among pundits on whether that weakness reflects a one-off, weather-related slow-down or something more threatening such as a slowdown in underlying economic growth. It could furnish an excuse for the markets to slow down or even mark time until the future is a little less snow packed.

I say hogwash to those fears (if they occur). The economy is growing and will continue to grow throughout the year. If there is any weakness in the stock market because of a perceived slowdown, that, in my opinion, would be another opportunity to buy the dip and nothing more.  

In the meantime, you may have noticed that the politicians in Washington are playing nice. Color me cynical, but this week's passage of the debt ceiling is all about mid-term elections and nothing more.

 Republicans and Democrats are desperately trying to repackage their ineptitude before November. Both sides are hoping that if they drop their penchant for confrontational politics now, the voter will actually believe they are turning over a new leaf and should be given a ninth or tenth chance to perform the duties they were elected to perform. It is all smoke and mirrors and you deserve what you get if you fall for it.

The S&P 500 Index is only 12 points away from its former high. If you were thinking of putting new money to work this week, I would hold off and see what happens. We could very well drop back to 1,800 or a little lower so keep your powder dry for 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.