It's "data divergence" day once again. On one hand, home sales
prices in 20 US cities climbed in June from a year earlier, the
first gain in almost two years. On the other hand, consumer
confidence tumbled to its lowest level this year. The markets
greeted today's contradictory data with a ho-hum feel, as the
indices did a push-pull for much of the day.
Earnings results from the likes of PVH Corp (
) and Movado Group (
) pleased investors early on, and we also had buying going on in
shares of H.J. Heinz (
guided higher this morning
. Positive Wall Street analyst commentary boosted stocks like
Phillips 66 (
an analyst sell call
had shares of semiconductor equipment giant KLA-Tencor (
) ending in the red. The heavily-watched transports sector
continues to stagnate as higher oil prices are putting pressure on
the group, including stocks like FedEx (
) and United Parcel Service (
Avoiding the ATM (For Now)
I received an interesting text message from my teenage daughter
the other day. While at work, she mentioned she'd forgotten her
lunch money at home. She asked if she could go to the ATM machine
to withdraw money (she just recently opened her first bank account
and has never used an ATM before).
I know the inevitable day will come where she'll need to use an
ATM for an unexpected emergency, or simply when she is not carrying
enough money to cover an underestimated expense. Still, I'd like
her to avoid that process for as long as possible, so my solution
was to ask her manager for a same-day loan, which she would pay
back when my wife picked her up from work later in the day. She
followed my advice and the trip to the ATM was avoided.
You see, I want my daughter to think about her day a bit more
carefully. She should not be simply running out of the house
without considering what she might need that day, money-wise. This
process is part of establishing a daily budget for herself, even
when she goes back to school next week. Also, the ease at which you
can use credit cards or ATM machines tends to lead to one taking
out a bit more money than would otherwise be the case.
With college soon approaching, I want my daughter to be
cognizant of common money mistakes. Focusing her spending power on
monthly necessities and avoiding splurging on extras is a good
habit to get into. A bit of sacrifice early on will get you into a
good mindset to eventually looking to pay yourself as part of your
monthly expenses. Now that I have my personal finance hat on, let
me add some other points to consider affecting most families
For most people, the biggest aim should be to get any
high-interest payments off your plate before doing anything else.
So, if you're sitting with credit card debt, for example, I'd
attack that area first. Once you have that dragon slayed, I'd
consider building an emergency fund for 6-12 months of expenses in
case of any job losses, etc. Keep that money in a high-yielding
money market account (not that any accounts offer actual attractive
yields these days) so you can access it very quickly. Your next
priority should be saving for retirement and/or college - these two
options are equally important.
Again, the most important thing is to get your high-interest
debt off the table first and foremost. That process will help get
put money on offense, not on defense. From that point on, you can
begin to gain some serious ground when it comes to accumulating
assets that produce income.
Income, Income, Income
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income-producing investments the markets have to offer during time
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. Also, if we see the market putting in what looks like a decent
bottom, we will be prepared to scale up the list of stocks we like.
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