Now the best time to rein in your debt

DECEMBER/January tends to be the time of year when overspending occurs, with many playing catch-up over the next few months.

Unfortunately, many Australians are on the debt treadmill and the ‘buy now pay later’ regimen is not really helping. Many are spending next week’s pay cheque before they even receive it.

We tend to avoid looking at our financial situation during the festive/holiday season, but now the kids are out of your hair it’s time to think about getting on top of your financials. You can get off the debt treadmill by setting up a budget for the year ahead.

Right now we are in a very low-interest environment, except for the dreaded credit card. It can charge interest as much as 20 per cent or more. Given this, I would encourage you to start eliminating any short-term, high-interest debt you may have accumulated and then to start paying off any other debts you may have.

What were the best and worst performing sectors this week?

In stark contrast to last week, which was a sea of red across the market, most sectors have performed well this week.

Information technology and healthcare have been the best performers, and are both up more than 2 per cent so far. These were followed by consumer discretionary and industrials, which are both up more than 1 per cent.

As for the worst performing sectors, energy is down 3 per cent, utilities is down over 1 per cent and communication services is just in the red.

So what’s next for the Australian share market?

Last week, I indicated that the market had started to move down as I was expecting. Yet after falling heavily on Monday, it spent the next three days rising to erode the fall of the previous four days.

Right now, neither the bulls nor the bears are in control and, as such, it is best to sit on the sidelines and refrain from buying until a direction is confirmed.

What I am confident of is that the market is medium to longer term bullish, with the All Ordinaries Index likely to rise to around 7600 points or above this year.

Dale Gillham is chief analyst at Wealth Within and international best-selling author of How to Beat the Managed Funds by 20%.