Forecasting the 2019 Financial Market

Rusty-Tweed

As 2018 is coming to close, the state of the financial market is a hot topic. Many have made the prediction for another market crash. Reviewing the reports and trends from the 2018 quarters will help with forecasting the 2019 financial market. The Federal Reserve has an Open Market Committee who are responsible for setting targets for interest rates that have to be met in early November.

However, investors do not expect to see an increase until the mid-December conference. Therefore, investors have two things to consider:

Analyze the economic replicated data that the policymakers monitor and use the reports to create an idea of what the interest rates will increase to in the year 2019. The Fed has gathered that there will be approximately three rate increases for 2019, but several investors agree there will be only two rate increases. An important fact is the strength of the U.S. economy. Is the economy continuing to see any indications of solid economic growth or is the economy slowing down just as the people have suspected?

Increased Inflation

As for inflation, there are two different measurements to watch for such an indication of the federal rate increase to change. Without there being a drastic change from the recent 2% inflation trend then the market is headed toward an unpredictable short-term quarter.

Investors on Wall Street have been conducting surveys as well as strategists, financial advisors and retail investors with the hope that the U.S. stocks – ranging from short to long-term – will not prove to be unpredictable as the 2018 year has. Early November was the kick off for the earnings season. Investors have been conversing about how the impact of the large data variables, higher rates, increased raw material costs, lowered foreign currencies, tariffs and a decrease in demand from China. Investors are turning their heads toward 2019 predictions with this data instead of focusing on the third and fourth 2018 quarter earnings, which is not a bad idea.

Affected Gross Margins and Increased Interest Rates

Other factors for forecasting the 2019 market are the issues arising. This includes margin erosion. The margin erosion is closer to increased costs in wages and raw materials. Amazon has reported its $15 minimum wage will not interfere with the ending year quarter earnings, but there are flags indicating its effect on the 2019 financial market. Luckily, the higher costs with several companies are leaning toward increasing the prices for consumers instead. Stronger sales will create a strong margin in the market.

The increased consumer prices are another hopeful prediction for rising margins and increased revenues. In order to keep the revenue growth strong for 2019 is interest rates. If the interest rates remain higher on a permanent level, then revenue-driven earnings will rise. This may also result in the fall of valuation math. A crucial cause and effect for 2019. Tariff reports have investors on the outs with its effect. Many say tariffs are considered raw material all companies (only a select few). Those few companies have acknowledged their earnings may fall as a direct effect of tariffs.

David Zinsner commented that the expected gross margins will remain high in the first quarter of 2019. This statement was made by David in September of this year. The high margins will be linked to a healthy financial market. Now the end of the year quarters, effective September 24th, involving tariffs will have a 10 percent impact on the imports from China. The imports are estimated at $200 billion. Shifting the impact over the next three quarters is in the works.

The trade war with China has been scrutinized heavily by investors. This is a huge factor with the predictions for 2019’s financial market. The main concern is undermining the effect the trade war will have. Conservatives are hypothesizing a 25 percent tariff on imported goods from China. This would cause S&P 2019 earnings to slightly decrease from $170 to an estimated $159. This prediction suggests that 2019 fiscal earnings will be scientifically lower in comparison to 2018. As higher rates contribute to higher interest prices, the increased yields will be placed on many firms who have hefty debts.

How much of an impact does this cause in 2019? Several firms will be hit with the risks of stocks while others may see a rewarding rise with favorable stocks. This is why the prediction for increasing consumer prices is being pushed. Can the so-called market crash for 2019 come true? It is possible, but there is hope to retain a strong economy with increased stock prices

Building and Strengthening Your Financial Foundations For 2019

Rusty-Tweed

2019 is upon us, and there is a growing financial concern happening with so many Americans that need to be addressed. Individuals are finding making ends meet strenuous and the wages in America don’t seem to be changing as fast as the accumulation of debt among its citizens. People are making horrible purchasing decisions, and although investing has become a wider known topic, not many are pursuing investment opportunities. All of these behaviors seem to be stemming from a “Living for today” mentality, which is dragging down the financial success of those seeking it.

With all of these elements affecting the finances of today’s hardworking people, and with drastic increases in debts per household, what’s the solution?

It’s time for people to start striving towards financial freedom by utilizing financial education tools to begin building foundations for healthier wallets. Instead of going shopping this holiday season and spending unnecessary amounts of money consuming the newest products, how about you invest in your financial future instead, to ensure a successful start to next year.

Understanding your Finances

The first step to building a solid financial foundation is understanding the current state of your finances. Are you drowning in debt? Do you have spontaneous spending habits that wreak havoc on your bank account? The health status of your funds is critical to know to remedy them and begin to build a growing financial portfolio properly.

Here are a few steps you can take to begin assessing the state of your current finances:

Monitor Money-in

What are your current streams of income and how well are they serving you? What type of monies do you receive on a regular basis that contributes to the balance of your bank account? These are essential questions to ask yourself when assessing the state of your finances. Income sources don’t necessarily have to be “jobs,” in today’s economy you can make money also providing shared services.

Do your income sources require you to spend money to make money? If so, it’s time to budget to see how much money you’re actually receiving regularly by calculating the possible expenses needed to complete your tasks. For example, if you provide ride-share services to help make ends meet, how much do you spend on gas in contrast to how much you actually earn?

Do you sell a product or service? What are the expenses that are needed to be spent regularly to produce your product or conduct your service? These are questions to consider when becoming familiar with your financial status. You may be surprised at the actual amount you earn compared to the idea you had of how much you make.

Monitor Money-out

Spending habits, bills, debt, personal care, and so many other things affect your balance on a daily, monthly, and yearly basis. These expenses have to be calculated before their time of payment so that you can adequately understand your financial state. Many individuals have expenses that are hidden and also expenses that can be controlled or eliminated altogether, freeing up monies for other uses.

Expenses can also stem from streams of income. To get to work and back home again, you have to spend on gas. When at work you may become hungry and have to purchase lunch. On the way home from work you may stop to buy groceries. Expenses arise throughout the day and being aware of them can keep them from completely ruining your bank account balance.

Monitor the money that you spend on a daily basis. Many banking apps have features which allow their users to control spending habits and expenses while providing solutions for freeing up cash from unnecessary expenses.

Create a Budget

Creating a budget can relieve the anxiety of financial uncertainty. A budget is a financial plan created by analyzing one’s finances and creating practical step-by-step instructions for achieving a financial goal. Budgets can be designed to accomplish many financial goals such as paying off debt, saving for your bucket list, or just creating more financial stability in your life.

Here are some steps for starting an effective budget:

Determine your income

To begin your budget, you must first determine how much you make on a weekly, monthly, and yearly basis. These will be the numbers you will be working to adjust each month higher than the last. Income can be determined as actual income or possible income. Actual income is the correct amount you make each month including extra funds or any monies which are added to your account.

Calculate all of your expenses

After you calculate your income, it’s time to calculate your expenses and subtract that number from your actual income. The amount of your expenses can be derived from your financial files, bank statements, receipts, and bills. It can be hard to accurately calculate the amount you spend each month without a banking app which can track your spending and bill pay. When calculating your expenses, for a more efficient budget add an extra 10 to 15 percent to the amount determined to be your expenses.

Calculate savings and investments

The number calculated from subtracting your expenses from your income should be your savings, although many consider this money to be expendable. Savings can be used to strengthen your financial foundation, and when applied to investments your savings can also grow your finances. Instead of spending this money, put it to work and create passive income by applying your savings to investment opportunities. Investment opportunities can provide a better use for your savings than the money just acquiring interest from sitting in a bank.

Set goals

Create financial goals for your budget, what is your financial mission? What are your intentions for your money within the next five years? This is the question you are asking yourself when setting your financial goals. Building a financial foundation and growing it to economic freedom should be your primary goal, while other goals will stem from this primary objective.

Record progress

Create a financial journal which records all of your monthly financial transactions to see your budget progress. By documenting your economic development, you will become inspired to create and achieve more financial goals.

Assess financial progress

As you record your progress, frequently correct financial habits that are affecting the achievement of your financial objective. Assessing progress might be to adjust your restaurant spending by cooking instead of going out to eat as frequently. Make sure to record all changes in habits which affect your budget.

Adjust budget and goals

When financial goals are accomplished; you should always adjust your budget to serve your financial growth better. Improving your budget frequently will ensure healthy financial progression and strengthen your financial foundation.

 

By applying some of these financial strategies, you can begin creating an effective financial plan that will help you to establish a secure and firm financial foundation for wealth building or just financial freedom in 2019.