This Week In Your Wallet: Why Women Rule The Markets
I want to start out by thanking you for ordering AgeProof. You all are the reason we’re on the New York Times bestseller list, and I couldn’t be more grateful. If you’ve started digging into your copy, let me know your favorite part — or tip — on Twitter (I’m @JeanChatzky) or Facebook (Facebook.com/JeanChatzky). Start with the line I’m #AgeProof because I…. Include a picture if you feel so inclined! And if AgeProof is on your book club list? I’m happy to Skype in to a meeting to chat about it. Send me an email at Jean@JeanChatzky.com, and we can talk about setting it up.
On to this week’s headlines…
All eyes are on the markets this week because of three impending events around the world, reports The Wall Street Journal. Those would be Dutch elections, a potential move towards Brexit by the U.K. and — closest to home — the Federal Reserve’s expected rate increase. It’ll likely be a quarter of a percentage point and, like we talked about last week, the first of three rate hikes over the course of 2017. The Federal Reserve will be meeting tomorrow and Wednesday, and I’ll give you a full recap in next week’s newsletter. The most important thing to remember? Control what you can control. You have no control over rates, the markets or what’s going on in DC. But you can control your own personal economy by keeping your savings rate up, making sure you’re diversified appropriately (and that you’re rebalancing once or twice a year) and keeping your emotions in check. If all the news is making you jittery, the solution isn’t to act. It’s to walk away from the news.
Invest-hers
Girls (and women) rule — especially when it comes to the stock market. That’s according to new data from Fidelity Investments, which shows that last year, female investors outperformed males by 0.3 percent — as well as overall over the past decade. Why do we consistently perform better? Trends show that men can be overconfident, buying and selling stocks too often, which lessens their returns over time. Berkeley professor Terrance Odean, who specializes in investor trends, found that in the 1990s men bought and sold 45 percent more than women, reports CNN Money. Women tend to pick a fund, stick with it and not touch their money — which aligns with the advice of most experts.
Consumer Complaints
If you had to choose the biggest nuisance you faced this year as a consumer, what would it be? The Federal Trade Commission just released its new list of the top 10 consumer complaints, and at the very top were complaints about debt collectors, followed by imposter scams, where a scammer impersonates someone “trustworthy” in order to get your money. The other top complaint areas were identity theft; telephone and mobile services; banks and lenders; prizes, sweepstakes and lotteries; shop-at-home and catalog sales; auto-related complaints; credit bureaus, information furnishers and report users; and television and electronic media.
If you’re dealing with one of the top two, here are some important things to keep in mind. Ask the debt collector for their complete name as well as that of the company, phone number, mailing address and collector license number. Look out for a validation letter within five days of receiving the first call, and know the collector generally can’t call you before 8:00 a.m.or after 9:00 p.m. local time. As for imposter scams? Here are two things to remember to protect yourself. One, if the first question on a call from an unknown number is a yes or no one, like “Can you hear me?” hang up immediately. Some scammers can gain access to your information by recording you saying “yes.” Two — since IRS imposter scams are on the rise — know that the IRS will never call or email you. They’ll only reach out via snail mail.
Trick Yourself Into Making Healthy Money Decisions
Maybe you know what you want to do with a raise once you’ve got it — pay down high-interest debt, give your retirement savings a boost, bolster that emergency fund. But how do you make sure you actually follow through? Forbes has a few behavioral economics-based suggestions. To start? The first thing you should do after finding out the size of your raise — besides giving yourself a pat on the back — is decide, ahead of time, how you will use it. Why so early? Because when you get that first larger paycheck, you might be tempted to use the extra cash for instant gratification, like a shopping spree or extravagant dinner out. That’s because in the moment, people tend to be blinded by short-term benefits. But when the options we’re choosing between are in the future, we gravitate towards healthier long-term choices. That’s why it’s important to decide where the extra money is going ahead of time.
The next thing to do is automate that decision for where the money’s headed. Why? Because every decision we make takes energy. Even if you’ve already decided to do something productive with the new cash, day-to-day decisions could wear you down enough that you don’t have enough self-control to follow through. So sit down and take a few minutes to automate it — you’re protecting your financial future from your short-term brain.
Have a great week,
Jean
