This Week In Your Wallet: What You Should Know About Record-High Markets
Welcome back to reality after Memorial Day weekend. The last couple of work days before a long weekend are usually filled with anticipation, whether you’re heading out via car or plane or looking forward to catching up on much-needed sleep. This time around, it seems like the markets felt it, too.
The S&P 500 and Nasdaq closed at record highs on Thursday and Friday, with information technology and the broader tech sector leading the way. Shares of Amazon, Netflix, Alphabet and Facebook climbed, reports CNBC.
What’s up with the quick recovery from the mid-May Comey slide? “There’s no clear and present danger on the horizon,” Jimmy Chang, chief investment strategist at Rockefeller & Co in New York, told Reuters. “The lack of fear, the complacency is supporting the market.” That said, there are warning signs. MarketWatch reported that the “nearly uninterrupted rise of stocks” parallels a constant increase in investors using borrowed money for investments. In April, total margin debt reached a record $549.2 billion.
So what does this mean for you as an investor? Take it as a reminder that although the markets historically rise long-term, in the short-term anything is possible. (Unexpected losses often cause more knee-jerk reactions than anticipated losses, reports CNBC.) Make sure that the funds you have invested for the long-term can truly stay there long enough to ride out any volatility, and move those that can’t out of the waves. And if you haven’t looked at your portfolio in a while? Chances are pretty good that you’re now overweighted in stocks. Take today’s newsletter as a not-so-gentle reminder to rebalance or — if you never quite get around to it — consider a target-date fund to keep yourself on track.
Climbing Credit
What else is at a record high? The credit scores of U.S. consumers, according to The Wall Street Journal. In April, the average credit score nationwide reached 700 — the highest since at least 2005, according to Fair Isaac Corp. The rise is partly due to the fact that a significant amount of foreclosures and bankruptcies are falling off credit reports — according to a Barclays PLC report, the personal bankruptcies of more than six million U.S. adults will disappear over the next five years,
If your score is climbing, pat yourself on the back. If it hasn’t budged, never fear — there’s a few things you can do to bring it up. First thing’s first: No matter how much you’re paying off, make on-time payments every time — this generally makes up 35 percent of your credit score. Set up automatic payments with your card company to avoid missing one. Pay down credit card debt so that you’re never using more than 30 percent of your existing credit limits (on each card and on all your cards combined). And keep an eye on your credit reports from all three credit reporting agencies, which you can check free once per year at AnnualCreditReport.com. If any negative information doesn’t belong to you, dispute it ASAP.
Free Money TODAY
And while I’m feeling acronym-happy: ICYMI, on my TODAY series last week, I went over how to find “free money” by reducing or eliminating credit card fees, bank fees and travel fees — plus finding unclaimed funds. I know it can be a pain to pick up the phone and wait on hold, but when it comes to credit card companies, it’s usually worth it. Eight out of 10 people who called their card company and ask to avoid or reduce annual fees, raise their credit limit or get late fees waived were successful, according to a CreditCards.com survey. Start by asking nicely, and if it doesn’t look good, ask for a supervisor — eventually, you might be put in touch with the retention department, which has extra power to give you something to keep you as a customer.
When it comes to the $40 billion that has been left behind in the form of “unclaimed funds” — typically forgotten-about savings or checking accounts, stocks, refunds, insurance payments, store credits and the like — two sites can help you get your hands on them. Start with MissingMoney.com, a free service informed by most state unclaimed property programs, and then check Unclaimed.org, where you can search by state. You can find my full segment and notes here.
Have a great week,
Jean
