It was a good year for the stock market. The S&P 500 Index was up in excess of 12.5 percent with the other averages putting in a good performance as well. Naturally, investors are hoping for another year of stellar returns. Is that a reasonable expectation?

At the beginning of each year, people like me are expected to gaze into crystal balls or swirl the tea leaves at the bottom of a cup and pontificate on what the New Year will be like for investors. Unfortunately, I have an "Eight Ball" but no crystal ball and I drink coffee not tea. Honestly, I have as much chance of calling the market over the next 12 months as you do. However, there are some things I do know to be true.

Working from the top down, I expect the U.S. economy to continue to grow, while unemployment declines further. As jobs gain, I also expect wage growth will finally begin to accelerate. Coupled with the declining price of oil, that spells higher consumer spending than most anticipate. And since consumers drive over 67 percent of GDP growth, I'm looking for a better than expected first half in the United States.

As for Europe, I am in the minority when looking at the prospects among the members of the European Union. Although Europe is teetering on the edge of recession, the European Central Bank does not appear to have the political backing to launch a U.S.-style quantitative easing program. ECB head, Mario Draghi, continues to promise more, but delivers less and less. Unless the ECB does implement a full QE, the prospects for the continent appear neutral to negative at best.

However, there are also risks ahead that could substantially change the playing field in Europe. The southern tier of European countries will hold elections this year. Populist movements, led by long-suffering voters in Greece, may repudiate the austerity programs that the northern, economically-stronger countries have demanded in exchange for bail-outs over the last few years. If that were to occur, all bets are off as far as investing in the European stock markets and the Euro currency as well. There are too many risks that depend on politics and not economics for my liking.

Over in Asia, readers are aware that I like China. I am betting that the government there will continue easing monetary policy and stimulating an economy struggling with a transition from an export-led to a consumer-led economy. Japan, on the other hand, is in the middle of a full-fledged quantitative easing program that will hopefully pay positive economic dividends in 2015.  

That leaves me liking the three largest economies in the world: China, the United States and Japan. In addition, I believe the U.S. dollar will continue to rise in 2015 while the Japanese yen and the Euro will continue to fall. There are specific exchange-traded funds and mutual funds that allow investors to invest in these areas. Let me know if you are interested.

Readers must be aware that what happens economically may not translate into gains for stock markets. Remember that most markets discount economic events six to nine months into the future. In which case, the U.S. stock market may have already discounted much of the growth I see, especially in the first half of the year. On the other hand, most investors are so U.S.-centric that they either do not believe or chose to ignore the prospects for China and Japan.

In my next column, I will get down to particulars in what I see are the risks and rewards for the stock markets in the year ahead.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

Sure, we love our kids. Of course we want them to get ahead, so when your son, daughter, or nephew asks for your signature right next to theirs on that private student loan application it is tempting. But before you sign on the dotted line consider this.

When you consent to being a student loan co-signer you are in for the life of the loan. If the student fails to make payments, you must. If they are late, you get the notices, too. Their financial problems will impact your credit score and could haunt you the next time you apply for a car loan, home mortgage, or simply a credit card.

I know that putting aside your emotions is difficult at best in the decision-making process. Yet, you must, because there is real money on the line as well as a multiyear financial commitment. Approach the decision as if the relative were a potential business partner. As such, you must be a fairly good judge of character. Does the person asking for the loan follow through on his or her commitments? Do they have a history of making good, financial decisions or are they the type that just can't seem to save money? How practical are they in life's decisions?

If the answers still indicate a green light, decide how and when they are going to be able to pay back the loan. If your son is insisting on getting an art degree with absolutely no prospects of employment, co-signing a loan with him could be financial suicide. Today, many college grads who have a degree in occupations that are already overemployed, obsolete or pay minimum wages cannot repay their student loans. Just because your relatives are "following their heart" in acquiring a degree is no reason to support that decision financially.

By all means be supportive but at the same time, the best assistance you can give is to explain the realities of the workplace. It is their option to listen and agree or disagree. Do this before the student wracks up thousands of dollars of debt that will follow him or her for the rest of their life and possibly yours.

If after all this, the decision is still a go, then urge the student to first explore a federal student loan, which does not require a co-signer, whereas 90 percent of private student loans do. Federal Stafford Loans for undergrads have a fixed rate of 4.66 percent, if the student loan is taken between July 1 and June 30, 2015. This would be both the student's and your best option.

But if you are still not convinced or the private loan is till the only option than consider also that the amount borrowed is not the amount you will end up repaying. Deferment, forbearance and interest will add a substantial sum to that debt. Remember too that student loans are not subject to bankruptcy laws. It is nearly impossible to have student loans discharged. And don't think you can remover yourself from the loan once the student receives it. Lenders have a whole host of hoops you need to jump through to even consider removing you from the loan.

To be fair, only 7 percent or so of students actually fail to make good on their loans. In most cases, the student pays on time things and things go smoothly. It is only when they miss payments and the bank come to you that your relationship begins to change with the co-signee. It is you who will be the "bad guy" every month in hounding the student to make their payments on time. What was once a warm and affectionate relationship can quickly evolve into something else. Don't let that happen to you.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

It was a good year for the stock market. The S&P 500 Index was up in excess of 12.5 percent with the other averages putting in a good performance as well. Naturally, investors are hoping for another year of stellar returns. Is that a reasonable expectation?

At the beginning of each year, people like me are expected to gaze into crystal balls or swirl the tea leaves at the bottom of a cup and pontificate on what the New Year will be like for investors. Unfortunately, I have an "Eight Ball" but no crystal ball and I drink coffee not tea. Honestly, I have as much chance of calling the market over the next 12 months as you do. However, there are some things I do know to be true.

Working from the top down, I expect the U.S. economy to continue to grow, while unemployment declines further. As jobs gain, I also expect wage growth will finally begin to accelerate. Coupled with the declining price of oil, that spells higher consumer spending than most anticipate. And since consumers drive over 67 percent of GDP growth, I’m looking for a better than expected first half in the United States.

As for Europe, I am in the minority when looking at the prospects among the members of the European Union. Although Europe is teetering on the edge of recession, the European Central Bank does not appear to have the political backing to launch a U.S.-style quantitative easing program. ECB head, Mario Draghi, continues to promise more, but delivers less and less.  Unless the ECB does implement a full QE, the prospects for the continent appear neutral to negative at best.

However, there are also risks ahead that could substantially change the playing field in Europe. The southern tier of European countries will hold elections this year. Populist movements, led by long-suffering voters in Greece, may repudiate the austerity programs that the northern, economically-stronger countries have demanded in exchange for bail-outs over the last few years. If that were to occur, all bets are off as far as investing in the European stock markets and the Euro currency as well. There are therefore too many risks that depend on politics and not economics for my liking.

Over in Asia, readers are aware that I like China. I am betting that the government there will continue easing monetary policy and stimulating an economy struggling with a transition from an export-led to a consumer-led economy. Japan, on the other hand, is in the middle of a full-fledged quantitative easing program that will hopefully pay positive economic dividends in 2015.  

That leaves me liking the three largest economies in the world: China, the United States and Japan. In addition, I believe the U.S. dollar will continue to rise in 2015 while the Japanese yen and the Euro will continue to fall. There are specific exchange-traded and mutual funds that allow investors to invest in these areas. Let me know if you are interested.

Readers must be aware that what happens economically may not translate into gains for stock markets. Remember, that most markets discount economic events six to nine months into the future. In which case, the U.S. stock market may have already discounted mush of the growth I see, especially in the first half of the year. On the other hand, most investors are so U.S.-centric that they either do not believe or ignore the prospects for China and Japan.

In my next column, I will get down to particles in what I see are the risks and rewards for the stock markets in the year ahead.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

This week a parliamentary vote to elect a president failed in Greece. National elections have now been called for late January. The outcome could trigger a revolt against an austerity program that has brought years of suffering and pain to the population.

Today, the unemployment rate is about 25 percent in Greece. Its citizens have been living with higher taxes, less goods and services, declining government spending, fewer pension benefits and longer work hours for many years. This unhappy saga was the result of a decadeslong binge of government spending, huge deficits and even higher debt. Detractors and creditors alike say the Greeks have only themselves to blame.

The global financial crisis triggered the end of the party. Since then, the Greek economy has suffered through three distinct recessions. As the economy slid, the viability of the country’s sovereign debt, which was held by the largest banks and financial companies throughout Europe, came into question. European leaders were terrified that the country would declare bankruptcy, renege on that debt and drag down the entire EU financial system with it.

A two-part debt bailout program was put together throughout 2010-2012. Various Eurozone countries, the European Central Bank and the International Monetary Fund (called the Troika) cobbled together a multi-billion dollar package that saved Greece (and the Euro) from economic disaster. In exchange, a severe austerity program, at the Troika's insistence, was forced on Greece and its citizens. Since then the prescribed medicine has improved the outlook for the economy and unemployment. In the meantime, Greek government debt has been quietly shifted from the hands of the banks, (which took losses of 53.5 percent of face value) to those of various governments. At the same time, private investors have been happy to grab up the forced sale of Greek government assets at distressed prices and the financial markets were rejoicing that Greece might actually return to a balanced budget by next year. So where is the fly in this ointment?

What may make bankers happy may not go down well with voters. Unfortunately, a country is made up of people who need to eat, to work, to aspire to the simple basics of life. Greek voters have seen precious few of those good things in life over the past seven years. Prime Minister Antonis Samaras, who has been implementing the austerity program, recently rejected demands by the Troika to raise taxes and cut incomes again in order to insure a balanced budget. As a result, additional bail-out money has been withheld.

Syriza, a left-wing coalition party of disgruntled Greeks, has been gaining ground and now leads the ruling Samaras' New Democracy Party in national polls. If they win in January's elections, they promise to throw out the austerity policies ordered by the Troika altogether. And Greece is not alone in rejecting the demands of outsiders. Populist movements in Spain and Italy are also attracting an increasing number of voters. They are demanding the end to similar measures in their own countries.

I am not surprised. My experiences during the debt crisis during the 1980s in Latin America convinced me that the Troika's austerity measures raised the risk of increasing social unrest in the Southern nations of Europe. Similar measures levied by the IMF in South America ushered in what is now called "the lost decade." Austerity there did little to improve economic conditions but fostered countless coups and social revolutions, untold poverty and misery.

Today, while the European Union is struggling to avoid falling back into recession, these populous uprisings are at best inconvenient and possibly the harbinger of something that could be infinitely worst. The ECB's plans in January to usher in a U.S.-style program of quantitative easing, I suspect, has been stopped in its tracks, until events in Greece are clarified. If things come undone in Greece, there is a real possibility that the Greeks could bolt the EU for good. And if they exit and survive, what would stop others from doing the same?

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.