Income inequality has suddenly become a hot topic. Think tanks worldwide are releasing studies on the issue. In this country, the president has made it a political issue in the mid-term elections. This week in Davos, the World Economic Forum will take up the gauntlet as well. It's about time.

Two years ago, readers may recall my four-part series on the growing inequality here at home and throughout the world. You were shocked to learn that America ranks last among all developed countries in income equality. As a nation, our income inequality is about equal to that of the Third World sandwiched between Uruguay and Cote d'Ivoire. States such as Massachusetts ranks about equal with Mexico, Connecticut with Venezuela, New York with Costa Rico and New Hampshire with Cambodia.

This week Oxfam, a non-profit confederation of 17 organizations in 90 countries, released a study that indicates that 85 of the richest people in the world own as much as the poorest 50 percent of humanity. Think of it, a double-decker busload of one percenters control $1.7 trillion, equivalent to the combined wealth of 3.5 billion people. Seventy percent of the world's population lives in a country where inequality has increased over the past 30 years.

In the United States, the gap between the have and have not's has grown at a faster pace than in any other developed country. The top 1 percent captured 95 percent of all the post-recession growth since 2009, while 90 percent of us became poorer, Oxfam's report mirrors several other studies including a University of California, Berkeley study, the Pew Research Center's findings and the IMF. The results are essentially the same.

At the tiny Swiss town of Davos, 2,500 participants from almost 100 countries will be flying in on their private jets and limousines. In years past, attendees were largely billionaire tycoons, business executives, the rich and famous, in essence a genteel gathering of the world's one percent. Supposedly, this year, they will be joined by some of the rabble. Representatives from international non-profit organizations, members of civil society and spiritual leaders, academia and the media have been invited.

This will allow for a larger cross-section of political, cultural and societal views but, excuse my cynicism; it is still essentially a rich man's club. As such, how serious will its members address income inequality when it is they who have profited the most from the trend? Granted, the fox may express its concern and sympathy over events in the hen house, but do we really think he will stop eating the hens?

In our own country, politicians on both sides of the aisle are honing their stump speeches. The Republicans will be preaching how free markets are the answer to income inequality while conveniently ignoring the failure of 30 years of "trickle down" economics. The Democrats will argue that the nation needs more social programs and even greater redistribution of income in order to level the playing field. Of course, they will dodge the fact that three decades of government-sponsored social initiatives have failed to even slow the growth rate of inequality in this nation. Could it have something to do with the fact that the average elected official in this country is a millionaire and thus part of the 1 percent?

Riddle me this reader, what happens to societies when inequality reaches a critical mass? The think tanks use words like "explosive," "serious damage" and "instability" in explaining the outcome. They are all code words for revolution, armed conflict and massive upheaval. Usually, a leader appears to lead the revolt, maybe a Robespierre or a Hitler or someone worse.

It surprises me why more people fail to see the connection between the growing income inequality and recent global uprisings in the Middle East, Asia and other places. I'm hoping this recent concern is more than a passing fad or a sop for the masses because the stakes are high, ladies and gentleman, and getting higher every day.

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.

Markets usually need something to move them. Good news or bad, the markets want an excuse to go up or down. Now that the government, the debt ceiling, the budget and the Fed are temporarily out of the picture, investors are finally focusing on something meaningful — earnings.

Actually, that is a good thing. It may indicate that the financial sector is at last returning to its historical roots after years of government bail-outs, monetary control and political drama. There was a time, some of you may remember, when earnings could make or break the markets. I don't think we are there yet, but company earnings this week have given the market cause to pause.

The sampling of company data thus far in this earnings season has been lackluster at best. Companies in the financial, health care, retail and several other sectors have disappointed. The Christmas season, for example, was evidently a disappointment for many traditional, non-internet retailers. Consumer shopping behavior is clearly changing as more and more people shop the web and shun the malls.

To tell you the truth, I am one of those who have abandoned the store for the ease, convenience and competitive prices offered through my computer. Just about all of my holiday shopping was done that way, including the gift certificate I purchased for my wife at a local clothing store.

In the financial sector, banks and brokers are struggling with the new curbs on proprietary trading as well as regulations that require them to amass more capital to offset the risks they are taking in their businesses. Bond trading, which had been a big profit center for financial institutions, also did poorly thanks to rising interest rates.

Granted, it is still early days in the earnings season. I am sure that there will be some absolute gems in upside earnings surprises. The trick is to identify those companies that shine and avoid those that won't. Wow! Could we really be at that point in the recovery where the fundamentals of individual companies have once again become important to their stock price?

As readers are aware, I believe the economy is accelerating and employment rising. All is well in the world right now.  Markets over the last few years have climbed a wall of worry but it appears that those worries have faded. We have yet to replace them with new ones or maybe the new worry is that there isn’t anything to worry about it?

So what are the negatives?

We are in the second year of a four-year presidential cycle. If one looks back through the post-World War II period, we find that these "second years" have been the absolute worst performance years in the stock market. To make matters worse, stock market returns have been even lower than normal when the president has been a Democrat.

Valuation also bears watching. Markets are not yet expensive, but could become so if enough companies fail to live up to expectations. What is now simply a pause in the market's advance could become a rout, if too many companies disappoint. But what continues to bother me the most is the sentiment indicators. There are just too many bulls out there for my taste. As a contrarian, I like the markets most when no one else does. However, none of the potential negatives tempt me to bail on stocks. Stay the course.

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.

"Net Neutrality" is the official name for an open Internet. It means that all Internet providers are to be treated the same regardless of whether you are a mom and pop company or a global behemoth. This week's federal appeals court ruling pulled the plug on that concept.

The judges ruled that the Federal Communication Commission's anti-discrimination rules were beyond the scope of its authority when it came to the Internet. Congress gave the FCC authority to regulate common carriers, such as telecommunication companies, years ago. The FCC has always ruled that telephone networks cannot discriminate against consumers.

However, back in the Bush administration, the FCC was pressured by phone and cable lobbyists to categorize Internet service providers differently. They are considered information services, which we now discover exempts them from common carrier rules. In hindsight, that was a big mistake.

For consumers the fallout could be huge. Fee-free services that we now take for granted may not work as well as before. Internet service providers could now charge fees for the privilege of "service in the fast lane" while the rest of us find we have been consigned to the tortoise lane.

If you're a company that really needs a large amount of bandwidth to provide your services to the consumer in a timely fashion, fees will be going up. Think of companies such as Netflix, Amazon Prime, YouTube, Facebook and others that may have to pay more to ISPs in order to ensure that their content remains accessible to their customers. We all know what that means — higher costs will be passed on to us in the form of higher charges for the same service.

Higher fees could also mean less innovation. Much of today's new ideas are Internet-related, simply because anyone with a good idea can try it out with little to no cost on the Internet. There will be fewer garage startups by Internet and Web-enabled entrepreneurs. Small companies will find it harder to launch new services or compete with existing players that have the resources to pay and keep new players out.

But this is not only about the cost of your next viewing of "House of Cards" or "Orange is the New Black." The Internet has become society's great equalizer. Anyone, regardless of background, income, or race can access the Web for any number of reasons from education to entertainment. As ISPs begin to resemble cable companies, those who can pay will receive a far different level of service from those that can’t.

Society in general will suffer as yet another great divide will be created. Those who can pay will have access and those who don't will see further stratification of society based on incomes and demographics. From the great equalizer, the Internet could become the great divider over time.

There is still hope, however. Net neutrality could still survive. There is nothing in the court's ruling that prevents the FCC from reversing their Bush-era decision. They could simply change the definition and treat the Internet providers as part of the telecommunications industry. Of course, that would put them at logger heads with a very powerful lobbying army and a number of politicians who are being paid to represent the interest of the ISPs.

That's where you come in. You could always call your elected official and express your opinion.

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.

Wall Street is awash with statistics on any given day. Some are useful while others simply add to the level of noise, but on occasion we do get some hints of where the markets are going by looking at past data.

Take the month of January for example, historically it has been a good month for stocks.

It is a time when new money supposedly floods into the stock market, pushing the averages up. That gets investors excited. They begin to anticipate a big up year. Some say that if the Dow Jones Industrial Average is higher after the first five days in January, then the month will be positive. Others argue that if the month finishes on an up note so will the year.

The S&P 500 Index has been up 13 of the last 20 Januarys, so statistically the odds are in our favor but not by that much. What may add weight to those probabilities is the market's performance in 2013. The S&P 500 Index was up 30 percent last year (not counting dividends).

Whenever that has occurred in the past (75 percent of the time since 1928), the next year's January gained on average 2.4 percent. There have been four years since 1995 that the S&P 500 closed with over 20 percent gains and all four years saw average gains of 2.5 percent.

As for the market's predicted performance in 2014, there is more good news ahead thanks to the gains of last year. Since 1950, there have been 17 instances when the S&P 500 was up more than 20 percent in a year. The same index finished positive the following year 14 times (82 percent probability). There have been four years since 1995 that the S&P 500 closed with over 20 percent gains and in all four years the average gain was 2.5 percent.

There is little to worry about on the domestic or on the global front right now.

Washington politicians are playing nice for now. This year's elections will short circuit any tendencies by the tea party to create another crisis in the first quarter. The economic numbers in the U.S., Europe and Japan are encouraging. Those are the three markets that investors should be focused on. Europe is lagging our own recovery by a year or two. Japan represents enormous upside in the years ahead and we here at home have entered a secular bull market.

So far the jury is out on January. Thursday was a down day and Friday we recouped some of those losses. I am betting that next week sees some further upside. However, somewhere out there a pullback is lurking. I expected it to happen in December but at its worst, the market was down less than 2 percent.

Interest rates continue to rise with the 10-year U.S. Treasury now over 3 percent. I believe rates are heading much higher. Part of the reason that the stock market continues to gain is that bond holders are finally getting religion. They are selling bonds and buying back into equities.

It is too hard to call the movements of the market in the short term but history seems to indicate that we should expect to see a few more days, if not weeks, of gains before this rally comes to a close. In any case, my advice remains the same for readers — stay invested.

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.

As most of us resolve to lose weight, quit smoking or in some other way change our lives this year, don't forget to re-evaluate where you stand financially. There are some simple steps you can take that will reshape your fortunes for years to come.

Most people don't know where they stand financially. Many can't tell you how much they spend or make, what their tax bracket is or how much they have saved. My advice is to create a budget as well as a statement of net worth.

It is not that complicated. Just track your spending for a month, separating essential from non-essential expenses. Next keep track of whatever income comes in. Subtract one from the other and you now have a cash flow. Now you can figure out what you spend and what you make a year simply by multiplying by 12 months.

Now comes the important part. If you spend more than you earn, as most of us do, you will at least know how much debt you are accumulating each year. There is no way anyone can get out from under a heavy debt burden unless they know how much debt they have in the first place. A first step in reducing that debt would be to cut back on those non-essential spending items.

On the other hand, some of us may find that we earn more than we spend each month but somehow the money just disappears. Usually, it is found among those same non-essential items that you don’t need but buy anyway. This is money that you should be saving toward retirement. You should be saving 10-15 percent of your pre-tax income each year, starting in your 20s, and add 10 percent more for every decade you don't.

Personal net worth is also a good thing to know. Once again, sit down and add up everything you own and how much it is worth. Next, figure out what you owe: mortgages, car payments, medical bills, school loans, etc. Subtract one from the other and you now have your net worth.

Armed with this new budget and net worth information, you can now create some goals and objectives. Are you spending too much? If so, create a spending reduction goal each month through the end of the year. Establish a debt-reduction goal for the year and make sure you are on track each month to achieve it.

If you can save, establish a goal for how much you will put away this year, and keep to it. At first it may only be an emergency fund, which in a pinch; would cover 3-6 months of expenses. After that, you might want to think about saving toward retirement through one of the many tax-deferred savings plans available.

These are simple steps that cost nothing but time and effort. The trick is to stick with the process. So often, New Year's resolutions last about as long as it takes to write them down. This year don't let that happen to you.

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.