This Week in Your Wallet: My Take on the Market & Apple Joins the Phab Life, Should You?
The stock market has been in Energizer Bunny mode. You know what that means, it keeps going and going and… That’s what USA Today reported last week, as the Dow logged its 17th record close of the year (it logged number 18 on Friday; analysts called yesterday’s fall of 100-plus points “profit-taking”). If you think all this good news would breed some healthy skepticism, you’d be, well, you’d be wrong. The Investors Intelligence Sentiment Index measures bulls vs. bears in the field of folks who write stock market newsletters. At the beginning of September the number of bears (people who think stock prices will fall) was 13.3% — the lowest it had been since January of 1987. That, of course, was just months before the October 1987 crash.
As you know, I am anything but a fan of trying to time the markets. I not only believe – but practice – dollar cost averaging so that I am fairly sure to capture the investments in my portfolio when they’re dirt cheap (though I also buy when they’re expensive). And I didn’t sell when the markets tumbled the last time around. I kept buying and reaped the benefits as they came back. That hasn’t been the case for everyone. As the recently released 2013 Survey of Consumer Finances – which I covered in my column for Fortune.com – showed the percentage of Americans who own stocks continues to slide.Today just 48.8% of American families own stocks, compared with 53.3% in 2007.
That has me worried. If you’ve been too gun shy to wade back into the markets, it’s time to reevaluate that decision. Understand, that amassing a nest egg sizable enough to not only get you to retirement, but through retirement, requires a disciplined program of saving money over time. But it also requires growth. The small return you’re eking out from safer havens may not even be enough to keep you ahead of taxes and inflation. It’s time to put together a plan to get you back on track (and if you’re unsure how to do this yourself, it’s a good time to call a financial advisor for a consult.) As for the rest of you, if you’ve been enjoying the market’s ride (perhaps even a little too much) take a two-second time out to make sure that you haven’t put any of your short-term money at risk. Ask yourself: Do I need to use any of the money I’ve invested in stocks in the next 5 years? If so, pull those assets out and move them to safety.
And now for the rest of the week’s news…
Apple joins the ‘phab’ life
Unless you’ve been living under a rock, you know the iPhone 6 is out and with it comes bigger brother: The iPhone 6 Plus, which is Apple’s first “phablet” (tech lingo for smartphones with screens measuring at least 5.5 inches on the diagonal). Together they have people weighing (literally and figuratively) which of the new phones to get. Many others, though, have already made the call. Yesterday, Apple said it sold more than 10 million new phones over the weekend, which trumps last year’s opening weekend for the iPhone 5C and iPhone 5S by a cool million. And last year’s sales included Apple stores in China, whereas last weekend’s did not.
If you’re still not sure whether or not to join the crowd, there are plenty of reviews to help you decide. (Most seem to be bowing at the altar of Apple. They boil down to: The 6 plus is better for video watching, gaming, and computing, though looks a little silly held to your ear. If you still make calls or want to actually put it in your pocket, the 6 is the way to go.) With contracts, the iPhone 6 starts at $199 and the Plus starts at $299. Without contracts you’re looking at $649 and $749, respectively. (FYI CNNMoney investigated how much it costs to make an iPhone 6 and it comes out to $227.)
What to do with that bridesmaid dress
Yesterday we said farewell to summer and hello to fall, as it was the first day of the season. Although before you embrace sweater weather, do you need to make room in your closet first? We did at my house. Except this year, instead of our usual “keep” and “donate” piles, we added a third pile to the mix: sell. The online consignment business is booming. And as it turns out, it can be a great (and easy) way to make some extra cash. I wrote about three places to do that for DailyWorth.
Julie Wainwright, the founder and CEO of online luxury resale store The RealReal says that for sellers, the key to choosing a shopping platform is finding out how many customers the site gets per month. Hint: You want the largest audience possible. You should also know how long it generally takes to make a sale, how much of the sale you net and – really important – when and how you get paid.
FREE webinar tomorrow
Tomorrow I’m hosting a free webinar as part of Verizon’s Small Business Ready Webinar Series at 2:00pm Eastern. Personal finance for small business owners can be tricky. All too often they allow their businesses to become their retirement plans. That’s why we’re going over retirement options and Money Rules that can help. Not a small business owner? Totally fine — you don’t have to be to attend. The major money takeaways can apply to anyone. If you have specific questions for me during the webinar, tweet me @JeanChatzky. We’ll be monitoring my feed. You can register for the webinar here. I hope you’ll join me.
Have a great week,
Jean
