5 January 2019 FT — Articles to Read

5 January 2019


Question: According to MSN: Money, what are ten (10) money mistakes everyone makes at the beginning of the year?


Powell seeks to soothe markets after year’s shaky beginning – Pg. 1

–          Federal Reserve chair Jay Powell offered an upbeat assessment of US economic prospects following a strong jobs report yesterday, easing fears of a 2019 downturn that had spooked global investors in recent weeks

–          …Mr Powell said the Fed would take a “patient” approach to monetary policy tightening, contributing to a rally which sent the S&P 500 up 3% by afternoon…

–          As markets soured in recent weeks, Mr Trump lashed out at Mr Powell over the Fed’s plans to increase interest rates.  But Mr Powell brusquely asserted his independence.  Asked if he would quit if asked to by Mr Trump, he replied, “No” (Prof Note: Central Bank independence is critical and, I fear, lost in today’s global market)


US shutdown exposes Democratic faultlines – Pg. 2

–          (Prof Note: I will provide a rare opinion of this silliness.  Our elected officials are elected to benefit constituents.  While I am not naïve and can understand a “greater good” argument, i.e. short suffrage for a greater good, the willingness of Congress to shutdown for the holidays and go home disgusts me.  You stay there, while the public suffers, and you work it out.  One does not leave for the holidays.  Being a member of Congress is not a job that one leaves at 5:00pm but it is an honour earned and bestowed.  It must be treated as such!  90% of a job is showing up on time (and staying there).)


Beijing to cut bank reserves by $117bn in latest move to lift economy – Pg. 3

–          China’s central bank will inject $117bn into the banking system by cutting the share of deposits that commercial banks must hold in reserve, …

–          Global markets fell this week on China slowdown worries,…

–          The People’s Bank of China said yesterday on its website it would cut the required reserve ratio (RRR) by 1%, with the cut divided into two stages of 0.5%, each effective on January 15 and January 25


Answer: (1) Not having a plan in place (Prof Note: I spent no less than a full day over the holidays putting together the 2019 plan); (2) Not reassessing an automatic savings strategy (Prof Note: I spent no less than a day regarding investment strategies, cash flow needs, etc.); (3) Ignoring retirement account contributions; (4) Putting off taxes (Prof Note: I pay taxes quarterly so am unclear why someone would put this off but understand how it can be done); (5) Not adjusting tax withholding (Prof Note: Be diligent and ensure you have cash as soon as possible); (6) Not checking life insurance beneficiaries (Prof Note: this should be part of your wealth management plan.  Beneficiaries need review for EVERY major life change); (7) Staying disorganized for yet another year (Prof Note: I truly believe that organization is correlated to happiness.  Also, create that home inventory…finally); (8) Not paying off debt (Prof Note: There is good debt and bad debt…be certain you are paying off the correct kind); (9) Not reviewing investments (Prof Note: GUILTY!  I need to be better about this but also focus largely, at this point in life, on blue clips and passive investment in indices); (10) Biting off more than you can chew (Prof Note: This thought is omnipresent with me.  What can I afford?  What do I want to afford?  What developments do I want to embark?  What responsibilities can I accept and comfortably carry?)