Despite a decline in both the manufacturing and non-manufacturing ISM (Institute for Supply Management) survey indices, 10 year Treasury yields increased to 1.67%. For the first time in a while, we are also starting to see German and Japanese 10 year bonds in positive rate territory. Here in the U.S., household debt remained low and a survey released by BLS (Bureau of Labor Statistics) indicates that 2015 spending increased, mainly due to increased personal insurance and retirement contributions. Listen in to hear more on these issues as well as how total household debt as a percentage of GDP in the U.S. compares to Canada.
July wrapped up with a nice rally in the U.S. markets, proving that summer can be a productive season in your investment portfolio. Today’s discussion brings our attention to U.S. GDP, the bond markets, and the emerging markets. Listen in to find out which two emerging market countries are projected to be the fastest growing in 2016!
During the summer months some of us like to cook outside – and slow cookers seem to be all the rage this year! The food may seem to take forever to cook, and we often can become impatient waiting for signs of progress.
We may have the same feeling when contemplating most of the world investment markets. Investors have finally decided that a diet of foreign bonds paying negative interest is unhealthy. While in the U.S. we are still w-a-i-t-i-n-g for the Federal Reserve to raise interest rates. The latest forecast is for a September rate increase. We can only hope! In the meantime the bond markets are suffering and definitely cooling. We saw big declines in bond values and returns for the second quarter, as hope for an interest rate increase in June evaporated.
Consumers in the U.S. enjoyed a little relief as energy costs declined – a useful prelude to the summer driving season instead of the usual increases in gas prices. Housing is recovering, employment is stabilizing and, although excruciatingly slow – we are indeed cooking here!
Our first economic discussion of the ‘official’ summer covered everything from the recent bond rally to household debt and the CBO’s forecast for Congress. Larry answers an interesting question on HELOCs and provides some commentary on education’s ‘last gas.’ A quick 15 minutes will bring you up to speed on the economy and provide some dinnertime discussion. Listen now!
Personal finance is important whether you are just starting out or have been in the game a while. Here at SH&J, we know how you manage your personal finances directly impacts the success of your complete financial plan. We’ve pulled together five tips anyone can use to help manage their own finances.
- Start Early
There’s no time like the present to start working on your personal finances. The sooner you start saving and investing your money, the better off you will likely be in the long run. Seek advice from a Certified Financial Planner™, read books and blogs on finances to gain knowledge, and find tools to help you stay on track. We also recommend talking to your kids about money from an early age to help set them on the right financial path.
- Know Where Your Money Goes
Have you ever come to the end of a month and wondered where your monthly paycheck really went? If so, you’re not the only one. Staying on top of your personal finances means paying attention to where your money goes. Find a system that works for you. Some prefer online tools for tracking expenses, while others need to carry a notebook and write everything down. Whatever the system, make sure you pay attention to how your money is being spent.
- Learn Self Control
At any age or stage of life, it can be difficult to say no to the vacation, night out on the town or those new shoes. But, the practice of self-control can lead to much greater monetary achievements. When you really want to purchase an item or experience, give it a couple of days before pulling the trigger. Consider whether what you want is really what you need, and how your decision will impact your long term goals. By learning to delay unnecessary purchases, you may free up more money to save and invest elsewhere.
- Simplify Your Life
It’s easy to get caught in the race to keep up with the Joneses – a bigger house, the newest car model, the latest fashion. Rather than trying to keep up, simplify. Warren Buffet, one of the world’s richest men, still resides in the home he bought in Omaha, Nebraska in 1957 for $31,500 (source). When it comes to finances, focusing on the big picture, while keeping your life as simple as possible, often leads to greater success.
- Take Control
Instead of being a passive bystander, take the reins of your personal finances. Build a team you can trust, from your banker to your financial planner to a trusted friend or family member, people who will hold you accountable. Stay in touch with your team, and pay close attention to the information they send you such as quarterly reports. Take an active interest in not only where your money goes, but also how it grows.
Personal finances can be tricky at times, but with the right tools and a commitment to seeing your goals come to fruition, you can find financial success. Take our tips and implement them into your personal finance strategy. If you need help creating a more in-depth financial plan, we’d love to talk. Reach out today.
Great relationships are formed by taking time to get to know each other. That’s exactly how we start our investment management process with you.
We want to:
- Learn about who you are
- Discover your goals
- Understand your risk tolerance
As Stephen says, “We know our clients are unique and canned plans just don’t fit.” So once we have gotten to know each other, we begin building a customized portfolio.
Our managed portfolios typically include:
- Mutual Funds
- ETFs
- Individual Stocks and Bonds
After we have built your portfolio, we continue to monitor your investments. We meet regularly to take a hard look at market trends and the global economy. We manage portfolios as a team in order to make the best possible decisions with our client’s investments.
As the years go by and circumstances change, we will continue to meet with you to update your goals and make changes to your portfolio. Our goal is to not only have you as a client, but also as a friend.
If you’d like to learn more about our investment management process or our other services, please give us a call at 303.639.5100.
Volatility is increasing in the U.S. markets making it more difficult to determine what direction your investments should take in 2015. When Oil slid from $100 to $50/barrel, the U.S. stock market rallied in anticipation that lower gasoline prices would allow consumers to spend this windfall somewhere more interesting than the pump, but that hasn’t happened yet. So far, all we’ve seen are layoffs in the oil patch and more price swings in the S&P 500. Europe is justifiably concerned about Greece and its willingness to resolve its debt crises. They keep talking and positioning as well as negotiating via the media with the Germans, but nothing significant has happened yet. So far this year, international markets have had some gains even slightly more than the U.S., but the structural problems outside the U.S. make us remain cautious. Over the past 6 years, the best place to invest your money has been the S&P 500. This index is likely a bit overvalued right now, and perhaps the international markets are a bit undervalued, but no one knows when the trend will change. It appears that the U.S. dollar will maintain the dominant currency for the foreseeable future making our exports more expensive. This does however, allow foreign companies to increase their sales to the U.S., likely making them more profitable. The U.S. has seen substantial job growth but minimal wage growth over the past year, which is encouraging news for corporate profits. We have yet to see consumer spending rebound to its pre great recession levels, but as more people get reemployed and old debts are repaid, the outlook for the U.S. appears to be the brightest around. How does this translate into your portfolio design? A large part of your portfolio will remain invested in the U.S. with some allocations hedged to the U.S. dollar in International stocks and bonds. Bond positions will remain primarily in U.S. corporations with some international exposure, but the U.S. looks like the place to be right now.
Sharkey, Howes & Javer is a Denver-based financial planning and investment management firm. For additional market updates and financial news, please follow our LinkedIn page. If you are interested in setting up a complimentary consultation with one of our Certified Financial Planners™, please call 303.639.5100 or visit shwj.com.