I read 3 articles today on Yahoo that dealt with financial news.
The first was an article about Bank of America Merrill Lynch and Morgan Stanley and the likelihood of a global recession on the horizon. Essentially, it was a doom and gloom article for the economy and did list several indicators that can point to an eventual 2nd recession. However, when asked for an odds ratio, both companies gave the odds at about 1/3 on whether or not we will have a recession. Of course, let's not forget that it took Ben Barnanke, the Chairman of the Federal Reserve, a year AFTER the last recession started before they could clearly state that the US had been in a recession for a year.
The second article was about the recent downturns in the stock market and how different financial planners from across the country were advising their clients to sell off some of their funds and move the money into cash or Treasury funds. I found it pretty entertaining that someone had mentioned that they could not afford to lose (as an investor) 4-5% in a $5,000,000 retirement account (That's $200,000 - $250,000). Over a 2 week period, that could be considered a typical swing depending on how aggressive the investment strategy is. However, the question is: if someone isn't willing to take that kind of short term loss, why were they invested in the stock market that heavily at the time?
The third article was about personal finance, and was part of the financially fit series on yahoo, which I would highly recommend to anyone that is looking to increase their financial knowledge or needs help staying in the black. This particular article was about where the average consumer unit (a statistic created by the US Bureau of Labor Statistics) and it shows for the average consumer unit what percentage of their income goes into 7 major categories and gives you the opportunity to measure what you spend against the averages just to see how you stack up to the average. My goal is to someday be spending well above those averages dollar-wise, but be well below those averages percentage-wise.
The best piece of advice I can give anyone is to increase your financial knowledge. It's not something we're really given in school. Most of us don't even get it in college. It's something you have to go out and search for. If you're looking for a place to start, let me know and I'd be glad to share where I got started.
Good luck to everyone!
