4Q 2016 Outlook: Central banks remain key to market sentiment

4Q 2016 Outlook: Central banks remain key to market sentiment

WRA Asset Strategy Fund


Story Highlights

  • We believe global central banks are in real danger of losing the markets’ confidence.
  • In a continued low-growth, low-inflation environment, we believe the hunt for yield will go on.
  • A current Fund theme relates to opportunities in companies initiating their own cost-reduction efforts.

In our previous blog we laid down some top tips for financial basics and budgeting. Here we’re looking at debt and retirement savings.


Pay off small debt first

Studies have shown that paying off small debts first can give you the confidence you need to tackle the larger ones. One way to go about this is list your debts in order of their balances, then pay the smallest balance first, paying its monthly minimum and throwing any extra cash at it each month. At the same time, make minimum payments on the largest debts. Once the smallest is paid off, apply its minimum payment to the next smallest debt. And so on until all are paid off.

Don’t co-sign a loan

It may make you look like a super great human being to co-sign your friend’s or brother’s loan, but keep this truth in mind. If the borrower misses a payment, the lender can come after you for the money and your credit score may take a plunge. As for your relationship with the lender…

Fill out the FAFSA

Got a kid going to college? Even if you think you won’t qualify for financial aid, fill out the Free Application for Federal Student Aid, aka FAFSA. It’s your ticket to the Pell Grant, which doesn’t need to be paid back, as well as federal work-study jobs and, in some cases, scholarships offered by your child’s college.

Mortgage payments as 28% of income

It’s a rule of thumb that can keep you grounded when you walk into that must-have house when house hunting. According to Investopedia, the 28/36 debt rule states that a household should spend a max of 28% of its gross monthly income on house expenses (including mortgage, home insurance, property taxes and other house-related expenses) and no more than 36% on all debt (including your 28% house expenses, car, credit card and other debt).

Saving for Retirement

Start saving ASAP

If you have a full time job, don’t put off starting a retirement account. Even if you start by saving only $25 a month, over time your money will grow through the power of compound growth. Our retirement calculator can help you estimate how much you need.

Don’t cash out your retirement account early

You’ve worked hard to save for retirement, so resist the urge to cash it out for an emergency (see Start an emergency fund above). Doing so will hit you with a hefty fee for early withdrawal and a tax bill.

Give your retirement account a raise
In years that you receive a raise at work, pay it forward and increase your retirement contributions. It’s an easy way to help keep yourself on track for retirement.

Retirement savings first, then college savings
There’s a saying: Your kids can borrow for college, but you can’t borrow for retirement. Everyone wants the best for their kids, especially when it comes to planning for college. But remember, kids can get loans, scholarships, work-study jobs. There is no borrowing for retirement. So set up your retirement savings plan first, then begin saving for college.

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