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Market Brief-October 2017

Each month, our Heritage Investment team publishes a market brief to provide an overview of the major factors influencing the US economy, including a summary of key sectors and the current positives & challenges.

Click Market Brief October 2017 for updates.

Here are some key highlights

POSITIVES:

  • Although, the income and spending trend has been downward over the past 3 years,consumer spending and personal income are still growing and inflation is low, which makes our dollar go further.
  • The PMI Manufacturing report (reflective of activity in private sector economy) continues to report moderate growth. September figure of 53.1 compared to 53.0 in August, shows little change. Hurricane effects can be seen in delivery delays which has slowed the most since Feb 2016.
  • ISM Manufacturing index has strengthened to an index of 60.8 in September, which is a 13-year best, signifying that there has been growth in the manufacturing sector. Hurricanes increased input prices but did not slow down production.
  • European equities (except for Spain, due to the Catalan referendum) have been up in the last week of September, partially due to weakening of the EURO. Gains ranged from 0.2% to 1.9%.

CHALLENGES:

  • September payrolls are likely to slow down. Forecasters predict only a 95,000 rise for September non farm payrolls (compared to 156,000 increase in Aug). The risk is that Harvey and Irma could further impact the results.
  • Jobless claims in Texas rose early in September, while claims in Florida began to rise mid September. We are yet to see the effects on Puerto Rico.
  •  House sales in the south

The 50/20/30 Rule of Budgeting

by Whitney Hufnagel, Heritage Trust

Life is all about making decisions. From the time you wake up each morning to the time you go to sleep each evening, you will have likely made hundreds of decisions. Most daily decisions seem small and routine, and every now and then a major life decision is sprinkled in the mix. Most of us can probably agree that it is easy to see how major life decisions can have a large impact on our financial situation, but how many of us realize the compounding effect these seemingly small daily decisions can have on our ability to reach our financial goals?

Our daily decisions, whether good or bad, help form habits. The habits we create have the ability to carry us successfully towards or destructively away from our goals. Creating a budget is just one tool that can help foster and maintain healthy financial habits. Budgets allow us to make sure we are spending our dollars wisely and in a manner that is appropriate for our unique situations and interests. Often times, people don’t attempt to budget or give up on budgeting because it can be time consuming, confusing, boring, unrealistic, or feel too restrictive; however, used in the right way, a budget can be very powerful and aid in daily decision making.

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The article below discusses a simple 50-20-30 rule to budgeting that may make budgeting easier for a novice and quicker for a pro. Simply put, 50% of your income should go towards living and essentials, 20% should be allocated towards financial goals, and 30% should be allocated towards those things you want but don’t need. As the article mentions you can adjust the percentages in a way that fits your unique situation. However, try not to reduce the 20% allocation toward financial goals. If anything, increase that allocation.

Please remember, this is a rule of thumb and does not ensure financial success. It is simply a tool that can help you determine whether your decisions and habits are financially healthy, help you identify areas of improvement, and help you maintain a level of awareness to make sure you are spending your dollars in an enriching way for your unique lifestyle. If you would like to discuss budgeting or financial planning in more detail, please contact us to see how we can help you.

New to Budgeting? Why You Should Try the 50/20/30 Rule – Forbes.com

If you’re new to budgeting, figuring out how to manage your money each month can feel overwhelming. Not only do you need to organize, but you also have to make difficult decisions about how to spend your cash. Relying on the experiences of others can help only so much, because your income and expenses are unique. Someone may be able to spend $2,000 per month on rent in Arlington, VA, but that kind of spending may not work for you.

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