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Weekly Market Commentary


The 5 Basics of Financial Literacy

Financial literacy is an essential life skill that everyone should possess. It is the ability to understand and manage your finances effectively, which can help you make informed decisions about your money and achieve your financial goals. Unfortunately, many people lack basic financial literacy skills, which can lead to financial difficulties and stress. In this article, we will discuss the five basics of financial literacy that everyone should know. These basics include credit and debit, interest, the value of time, inflation, and identity theft and safety.

Credit & Debt

Understanding the ways credit and debt work for and against you are some of the first steps toward understanding personal finance. While it’s not useful to be scared of credit and debt and avoid it entirely, there are some things to look out for.

Debt is like any tool: when used correctly, it can be quite useful. When used incorrectly, debt can easily spiral out of control. Missing payments may negatively affect your credit score, and that can take years to recover from. Missed payments, for example, can stay on your credit report for seven years.

Credit Score
Your credit score is one of the factors lenders use to judge your trustworthiness and qualification for mortgages, auto loans, and other lending. Landlords and employers may also check your credit before renting to you or offering you a job.


Interest can work against you, but it can work for you, too. When you take out a loan with an interest rate, it’s working against you, but when you invest early and take advantage of compound interest, it’s working for you.

Compound Interest
When you’ve got an account that’s accruing interest, the interest earned gets added to the principal. Then, interest is earned on the new, larger principal, and the cycle repeats. That’s compound interest, baby!

The Value of Time

It's never too early to start saving. In fact, the earlier you start, the better your result. By getting started with retirement savings sooner rather than later, you can leverage the value of time to your advantage.

Cindy vs. Charlie
Consider the case of Cindy and Charlie, who will each invest a total of $100,000. Cindy starts right away, depositing $10,000 a year at a hypothetical 6% rate of return. After 10 years, Cindy stops making deposits. Charlie, on the other hand, waits 10 years before starting to invest. He also puts $10,000 a year away for 10 years, at the same hypothetical rate as Cindy. After 20 years, who has more money? Shockingly, Cindy's balance is nearly twice as big as Charlie's, thanks to the extra time her investment returns had to compound.


Inflation has the potential to eat away the purchasing power of your money. That means, with inflation, the dollar you earn today may not be worth a dollar in the future. Here some things to keep in mind when thinking about inflation.

Cash in a Mattress
Keeping all your cash under a mattress is not only unsafe, it literally costs you money. Assuming the rate of inflation is a hypothetical 2%, every dollar you squirrel away will shrink in value to just $.98 next year.

Rate of Return
Because inflation erodes the purchasing power of your money, any returns you earn on your accounts may not be the “real” rate of return. If your account earned a hypothetical 6% rate of return over the last year, but inflation was 1.5%, your real rate of return was 4.5%.

Identity Theft & Safety

In the modern world, identity theft is one of the biggest threats to financial and personal safety. A cracked password or misplaced Social Security number can have big consequences on your current and future finances.

Consider using a password manager
The common wisdom is to use a unique password for each site and service you use. A password manager can make this easier by generating and storing strong passwords until you need to use them.

Let's Team Up

In conclusion, financial literacy is a vital life skill that everyone should possess. Understanding the basics can help you make informed decisions about your money and achieve your financial goals. By mastering these basics, you can avoid debt, save for the future, and protect yourself from financial fraud. Remember, financial literacy is a lifelong journey, and there is always more to learn. Start by mastering these five basics, and you will be on your way to a more secure financial future. Our team is here to answer any questions you may have in your specific situation.

All three US large cap equity indices posted negative returns last week with the Dow Jones declining -2.23%. This was the worst weekly performance for the Dow in a year. The S&P 500 posted a -0.93% return and NASDAQ outperformed relative to the other two indexes with a -0.79% return. Mid-caps returned -1.61%, outperforming the Dow Jones, but trailed the S&P 500 and NASDAQ. Small caps posted a -2.86% return for the week and underperformed large and mid-caps. International equities posted a -1.35% return for the week and underperformed emerging markets, which posted a positive return of 0.28%. Emerging markets are now outperforming US small caps year-to-date. Major bond indices declined for the week as yields across the treasury curve rose. The US Agg posted a -1.06% return and lagged High Yield and Global bonds. High Yield, which is less sensitive to interest rates, outperformed with a -0.49% return.

4.8 Magnitude Earthquake Rattles NYC & New Jersey: A 4.8 magnitude earthquake, one of the strongest in state history, was recorded in New Jersey that shook residents in surrounding states and New York City on Friday morning. The temblor was reported about 5 miles north of Whitehouse Station, New Jersey, at about 10:23 a.m. Friday, according to the United States Geological Survey. The epicenter was about 45 miles from New York City, where residents reported shaking furniture and floors. People reported feeling the shaking as far north as Maine and as far south as Norfolk, Virginia, following the quake, according to the United States Geological Survey. A 4.0 magnitude aftershock slammed New Jersey at around 6 p.m. No major disruptions or damage have been reported in New Jersey or New York. USGS is still investigating the exact fault line at the center of Friday’s quake and said it occurred in a region with dozens of fault lines that were more active millions of years ago.

Yellen says US-China Relationship on ‘More Stable Footing’ but More Can Be Done: U.S. Treasury Secretary Janet Yellen met on Sunday in Beijing with Chinese Premier Li Qiang and sent a message of mutual cooperation despite the nations' differences. Yellen came to China top of mind with trade practices that put American companies and workers at an unfair competitive disadvantage. The meeting comes after the U.S. and China on Saturday agreed to hold "intensive exchanges" on more balanced economic growth, according to a U.S. statement. "While we have more to do, I believe that, over the past year, we have put our bilateral relationship on more stable footing," Yellen said.

Index performance does not reflect the deduction of any fees and expenses, and if deducted, performance would be reduced. Indexes are unmanaged and investors are not able to invest directly into any index. Past performance cannot guarantee future results.
Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect again loss. In general, the bond market is volatile; bond prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer term securities. Any fixed-income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. Vehicles that invest in lower-rated debt securities (commonly referred to as junk bonds or high-yield bonds) involve additional risks because of the lower credit quality of the securities in the portfolio. International investing involves special risks not present with U.S. investments due to factors such as increased volatility, currency fluctuation, and differences in auditing and other financial standards. These risks can be accentuated in emerging markets.

The statements provided herein are based solely on the opinions of the Osaic Research Team and are being provided for general information purposes only. Neither the information nor any opinion expressed constitutes an offer or a solicitation to buy or sell any securities or other financial instruments. Any opinions provided herein should not be relied upon for investment decisions and may differ from those of other departments or divisions of Osaic Wealth, Inc. or its affiliates.

Certain information may be based on information received from sources the Osaic Research Team considers reliable; however, the accuracy and completeness of such information cannot be guaranteed. Certain statements contained herein may constitute “projections,” “forecasts” and other “forward-looking statements” which do not reflect actual results and are based primarily upon applying retroactively a hypothetical set of assumptions to certain historical financial information. Any opinions, projections, forecasts and forward-looking statements presented herein reflect the judgment of the Osaic Research Team only as of the date of this document and are subject to change without notice. Osaic has no obligation to provide updates or changes to these opinions, projections, forecasts and forward-looking statements. Osaic is not soliciting or recommending any action based on any information in this document.

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