Posts Tagged ‘investing’

Should You Save for College or Retirement First?

November 15, 2014 Comments off

college savingsIf you’re like most people who have children, you’re probably doing all you can to save for their college education. Due to the current cost of a college eduction along with the fact that the cost is escalating at a pace much higher than inflation, and likely higher than the growth of your income, it can seem like a daunting task.

While you’re working hard and saving for college, there’s still the nagging question in the back of your mind, “Am I saving enough for retirement, too?” Some folks are lucky and have an income level that makes it possible to save adequate amounts to ensure both a top-notch education for your kids, and the retirement lifestyle you’ve always dreamed of.  If you don’t fit into this lucky group you’re probably wondering which side you’ll have to sacrifice.

As parents, our natural instincts are to provide for our children first, and ourselves later.  After all, if there was only enough food in your house and you had to decide who went hungry, you know it would be you…and you wouldn’t even think about it for a second.

However, in this particular case, it makes better financial sense to over-ride this natural inclination, and think of yourself first. From a purely financial perspective, if you have to choose between saving for college and saving for retirement, you should save for retirement. There are a couple of reasons for this, but the most important one is you can finance a college education, you can’t finance a retirement.

The other aspects of this to consider are the fact that you will need a considerable amount more money for retirement than college, therefore starting to save earlier will be important for hitting your goal. Finally, you will gain more current tax advantages by saving for retirement than you will saving for college.

It goes against your parental instincts, but if you HAVE to make a choice, choose to save for retirement.


Stock Market Update for 12/20/2012

December 20, 2012 Comments off

Stocks Seeing Modest Weakness In Early Trading

After coming under pressure over the course of the previous session, stocks are seeing some further downside in early trading on Thursday. The major averages have dipped into negative territory, although selling pressure remains subdued.

The major averages are currently posting modest losses, near their lows for the young session. The Dow is down 16.65 points or 0.1 percent at 13,235.32, the Nasdaq is down 8.70 points or 0.3 percent at 3,035.66 and the S&P 500 is down 1.63 points or 0.1 percent at 1,434.18.

stock market updateThe modest weakness on Wall Street comes as traders continue to keep a close eye on developments in Washington, with uncertainty about the fiscal cliff creeping back into the markets following recent comments by President Barack Obama and House Speaker John Boehner.

Boehner has indicated that he will bring his “Plan B” legislation to the floor of the House for a vote despite a veto threat from the White House.

The “Plan B” legislation would extend the Bush-era tax cuts for people making up to $1 million, but Democrats claim it would raise taxes on millions of working families.

Boehner has argued that the president would be responsible for the largest tax increase in American history if he can’t persuade Senate Democrats to approve the legislation.

As a result of the focus on the budget negotiations, traders have largely shrugged off the latest batch of U.S. economic data, including a report from the Commerce Department showing stronger than expected third quarter GDP growth.

The Commerce Department’s final estimate showed that GDP increased at an annual rate of 3.1 percent in the third quarter compared to the previous estimate of 2.7 percent growth. Economists had expected a more modest upward revision to 2.8 percent.

A separate report from the Labor Department said initial jobless claims moved back to the upside in the week ended December 15th after unexpectedly falling to a two-month low in the previous week

Gold stocks have shown a notable move to the downside in early trading, dragging the NYSE Arca Gold Bugs Index down by 1.1 percent. The weakness among gold stocks comes amid a sharp drop by the price of the precious metal, with gold for February delivery falling $18.30 to $1,649.40 an ounce.

Semiconductor and networking stocks are also seeing some early weakness, while most of the major sectors are showing only modest moves.

Holiday Season, Year End and the US Fiscal Cliff are all in full Bloom

December 3, 2012 Comments off

With Black Friday behind us, and Cyber Monday over and long forgotten, traders look at the first trading day of December. Holiday season, year end and the US fiscal cliff are all in full bloom. Market attention will focus on US lawmakers. Over the week, Fox News interviews with political leaders all came to the same conclusion and that was there is a big difference between Democrats and Republicans with little headway as the days to the financial time bomb tick down. Markets and economists, business leaders and traders are all sure that policy makers will reach a last minute agreement as they always do. It seems that these guys thrive on political drama and as long as they can remain in the headlines and push their own agenda they will hold out to the last minute.

stock trading newsIn normal times, this week’s slew of US economic data could serve as a jumping off point for a rally in the stock market. December is historically a strong month for markets. The S&P 500 has risen sixteen times in the past twenty years during the month. But the market hasn’t been operating under normal circumstances since November 7 when a day after the US election, investors’ focus shifted squarely to the looming “fiscal cliff.” Investors are increasingly nervous about the ability of lawmakers to undo the $600 billion in tax increases and spending cuts that are set to begin in January; those changes, if they go into effect, could send the US economy into a recession. A string of economic indicators next week, which includes a key reading of the manufacturing sector on Monday, culminates with the November jobs report on Friday. Greece’s debt-buyback operation may extend to holders of almost 4 billion ($5.2 billion) of government bonds who opted not to participate in the country’s debt restructuring earlier this year, the biggest in history. The key focus this coming week will be the FOMC and the possibility of more QE3. No one is sure what Mr. Bernanke has in store for us. The dollar index, which tracks the greenback against six major currencies, traded at 80.15 on Friday and remains weak in early Asian trading as the US financial problems weigh on the dollar this morning.

The surprise ending of last week, seemed to be ignored by traders. The European Stability Mechanism (ESM) and European Financial Stability Facility (EFSF) were downgraded by Moody’s Investors Service, which cited a high correlation in credit risk present among the entities’ largest financial supporters. The ESM was cut to Aa1 from Aaa, while the EFSF provisional rating was lowered to (P) Aa1 from (P) Aaa. The EFSF has about€161.8 bn (USD210.1 bn) of bonds outstanding. The euro continued to climb on Monday morning to trade at 1.3038 adding 52pips, the euro has been unable to sustain the 1.30 level. The Euro edged higher, on ECB President Mario Draghi’s comments that the euro zone recovery would come in the second half of 2013.

Positive data releases from China showed economic expansion, which will help buoy traders’ sentiment today. The AUD and the NZD have shown little response to the positive news, with retail sales tumbling in Australia and both the RNZ and the RBA making rate decision this week.