SoFi Blog

Data this week confirmed that the slowdown in the US economic growth seen in August was a temporary one. Market-derived probabilities of a Fed rate hike by December continued to rise along with a stronger dollar and higher 10-year Treasury yields. Oil continued to climb as U.S. oil inventories fell and the prospects for an OPEC agreement remained intact. The rising price of oil caused emerging markets (many of which export oil) to outperform.

The final week of the quarter was an exciting one. Continued troubles with European banks led to volatile stock markets (more on this next week). Oil prices were sent sharply higher after a productive meeting among member countries of the Organization of Petroleum Exporting Countries (OPEC). Inflation data out of the United States continues to move towards the Fed’s target, but came in at expected levels leading to little change in the 10-year Treasury yield.

You’ve worked hard and have made strides in your career. Despite racking up some debt, including perhaps student loans, you’re climbing and may be even seen as a mover and a shaker. And time will come —if it hasn’t already— when the coveted word “senior” or “partner” will be added to your title and bring with it a sweet raise. Before you know it—boom!— you’ll be in the money.

For young professionals today, there’s been a “good news, bad news” financial scenario developing for a while now.

Good news first: The unemployment rate for college grads, ages 22-27, is finally on the decline. Recent data from the New York Fed outlines a 7.1 percent unemployment rate in March 2011 and a 4.9 percent in 2015.

The bad news? Despite the fact that there are more jobs available for younger workers, widespread wage stagnation and decline has made it hard for 20- and 30-somethings to play financial catch up. Add to that a record volume of student loan debt, and you’ve got an entire generation suffering from a generational “wealth gap.”

Investing is a funny business.  Whether you invest on your own or you use an advisor, if you own stocks or bonds, you’ve probably had to answer a few questions about your investment style.  Questions, such as “Which portfolio would you choose?” and “How much do you know about investing?” These questions are intended to measure your risk, and, correspondingly, put you in the best portfolio for the amount of risk you are willing to take.

While well intended, this approach is a ridiculous way to drive investment decisions, particularly given the technology available today.