Brexit Fallout: After voting to leave the EU by a slim margin, concerns of the UK’s future rocked financial markets all around the world.
More than $3 trillion of equity market value was wiped out during 6/24-6/27. This was the biggest two-day loss ever for the S&P Global Index.
Our closing comments to our clients on Friday 6/24 were as follows:
“In a few years, we may find ourselves looking back and wondering what all the fuss was about, just as we now do with the last European crisis in 2011. For most investors, the biggest risk is how you deal with short-term noise.”
Those few “years” may have been better stated in weeks. Since that time:
S&P 500 is up 9.24%
VIX (Volatility Index) is down over 50%
K. central bank cut its benchmark interest rate to lowest level in history.
The fallout seems to be leaving many to question what the future of the UK economy will look like. Many economists are expecting the British to go into a recession, the first since 2009. While others founds that British millennials (ages 15 to 35) will be the first generation to earn less than their predecessors.
Greek Debt: Taking a backseat to Brexit activity, a deal was able to be reached with Greece’s creditors to ease the threat of a possible bankruptcy.
India’s Growth: Consumer spending has been a key catalyst in India’s economy growing at the fastest pace in the past 4 years (7.6%)
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There are plenty of items Indiana residents need to keep in mind when figuring out their budget, but what might get missed is the true cost of pet ownership. Especially for a dog, lifetime ownership costs can vary greatly based on a number of factors, including the size, breed (and typical health concerns associated with that particular breed) overall health and where the pet lives — big city vs. small town.
One thing is for sure: no matter what size or type, Americans love their pets. And the money spent on them shows it. The American Pet Products Association concluded that total U.S. pet industry expenditures were $60.28 billion for 2015, and 2016 figures are estimated to be $62.75 billion. Kiplinger recently published an article that estimates that in the first year alone, you will spend between $700 and $2,000 on your new furry friend, and that is not taking into account any special extras like dog walking, pet insurance or grooming.
So assuming you have a pretty healthy dog or cat and you stay on the conservative side of things, here is a quick estimated breakdown of the average first year costs (according to the ASPCA) of pet ownership for one medium-sized dog or cat:
Bulk food or fancy food? Cat or dog sitting? These could all affect costs, and with so many variables to consider, it might be a good idea to get that pet insurance, especially if you have a breed that is prone to health issues. “Owners will likely incur at least one $2,000 – $4,000 bill for emergency care at some point during their pet’s lifetime”, says Dr. Louise Murray, vice-president of the ASPCA’s Bergh Memorial Animal Hospital, in New York City.
And that brings us to one final word of caution: Don’t mistake your own emergency fund as a go-to source for dipping into if you want to pay for pet expenses. Money you are saving for your own emergencies should be used for that not pet emergencies, so make sure you set some money aside for the non-human member of your family.
More questions about budgeting or more complex financial strategies? We can help. Visit Midwest Wealth Management at www.midwest-wealth.com, or call us at 877-243-4132.
Weliver, David. The Annual Cost of Pet Ownership: Can You Afford A Furry Friend? Money Under 30. 1, Sept. 2014.
Lilly, Amanda. 9 Costs Every Dog Owner Should Budget for. Kiplinger. Sept. 2011.
On Friday, June 24th the morning after Britain voted to leave the European Union (EU) – the markets were preparing to open up to with big losses and investors were gearing in for high volatility. The real outcome of the events was unknown in regards to the long-term effects it would have on any one market, sector or specific company. The only thing that was certain was the number of opinions for investors on what they should be doing: Buy right away? Sell while you can? Ride it out? With news stations and investment commentaries calling for the next big market crash or short-term volatility, what was an investor’s best game plan?
For investors using the robo-advisor Betterment platform, the option was simple – do nothing. And although it was completely within Betterment’s rights to use its own discretion in coming to this decision, (given the type of arrangement they have with their clients who aren’t looking to buy or sell instantaneously), it still caught many of their clients completely off guard —especially the ones that wanted to buy on Friday. It sends a bad message when your clients are desperate to adjust their positions and the system refuses to cooperate. Being told they could not do something with their own money was not well received.
To make matters worse, there were other digital advisers who thought it best not to touch their platforms at all. SigFig, among others, left their platform untouched. "Just because markets may be up or down doesn't mean we should suspend trading," said Mike Sha, chief executive of SigFig. He said trading halts should be made when trades are not being executed properly, which was not the case on Friday, despite prices being down.
These types of events are learning experiences because they help educate investors on how to determine what they really want out of any type of adviser, robo or not. It also brings clarity to what actions advisors can take, or in this case, prevent investors from taking, especially if they advisor determines that it is in the investors’ best interest. It has also brought up the question of why a company — who prides itself on not trying to time the market — is telling clients this is not a good day to buy or sell.
It is important to understand how your adviser is able to act under what kind of conditions. And in times of extreme uncertainty, what kinds of actions they are going to take on your behalf.
For more information on investing and other financial tips, visit Midwest Wealth Management at www.midwest-wealth.com, or call us at 877-243-4132.