By Julia Anderson
Smart Money is a show that I co-host with Pat Boyle at TVCTV public television in Beaverton, Oregon. Here are links to the latest episodes:
Values-based investing with Mike Penfield with Key Private Bank in Portland, Ore.
Once known as socially responsible investing, values-based investing means that you let your values be part of your investment strategy. If you’re concerned about climate change or don’t want to own any tobacco stocks or private jails there are funds that keep your money out of those investments. If you support non-genetically modified food businesses, you can go in that direction. But do you sacrifice investment returns when your values guide your strategy? Penfield says, no.
Resources for Women Investors Who Want to be More Confident Investors
Women are good at paying the bills, good at saving, managing household budgets. An area where women say they are less confident is with investing. Putting money in a bank savings account does not cut it. Women need to embrace investing as part of their money life. There’s no big mystery to investing. Here are resources that show the way:
Oregon state Treasurer Tobias Reads shares an update on OregonSaves after a year of operation. The program is allowing people who do not have an opportunity to invest in a tax-deferred retirement plan to take control of their financial future. It’s a 5 percent automatic payroll withholding tax-deferred program. In two years, savers have collectively saved $22 million. The money is managed through a state-sponsored program.
Bottom line: Saving even a little bit is important. About 3500 employers are registered with the program.
Tech Resources for Seniors
Tech guru, Bill Sikkens, tells viewers how seniors can use online services and get tech help with online issues. OHSU offers classes designed to help seniors with tech issues. How to build confidence, get online, what to be afraid. How to use Facetime and other video calling services. There’s a whole industry around telemedicine on an ipad. Prescription refills. Medical consultation. Look for colleges, senior centers, churches that offer classes in online technology. Costs should be minimal (less than $100).
Hoarding: What families need to know and how to help
Clutter that renders living spaces uninhabitable. To a hoarder, everything they own is important. Companies specialize in cleaning out hoarder homes. There’s usually an underlying psychological issue. It’s not a single fixed thing and requires counseling. It’s a complicated. Books: “Dirty Secret: A Daughter Comes Clean about Her mother’s Hoarding, by Jessie Sholl; “Und issue for families, many give up.
Bookerstanding Hoarding,” by Jo Cook, “Overcoming Hoarding,” by Colin Jones.
By JULIA ANDERSON
A friend asked me last week if I thought there would be a recession and when would it happen.
The answer to the first question is easy …yes, there will be a recession. Like the ebb and flow of tides, recessions come and go. The last one in 2007-2009 was a doozy. Housing values cratered, stock markets fell and as Warren Buffett says, we found out “who was swimming naked.”
Those who had jumped into the house bubble were burned. It took years for values to recover. Those who panicked and sold stock holdings lived to regret their decision because they’ve missed the bull market rebound.
People without cash emergency funds were hurt, especially if they lost a job.
But look at the recovery --- 10 years later, housing values are back, markets are at record highs and consumers are confidently spending. Record high employment and low interest rates continue to juice the economy.
Recessions are a natural part of the economic cycle. Let’s hope our next one will be mild compared to the financial crisis of ten years ago.
Should we worry about a recession coming soon? Worry is the wrong word.
Let’s just be prepared for one when it happens. There are signs that our beloved bull market is getting tired. Manufacturing activity is slowing, housing prices are flattening as supply begins to catch up with demand, and home-building is slipping. Wage growth has improved but still lags rising costs, especially for housing. First-time homebuyers are priced out in many of our major cities.
Farm income is in the tank. Boeing’s 737 Max problems are a national economic negative and banks continue to struggle to generate robust profit. There’s a lot to weigh about the economy -- pro and con.
To answer my friend’s second question about timing, I told her I did not think we would see anything like a real recession until after the 2020 Presidential election. History backs me up. The S&P 500 Index of the 500 largest publicly traded American-based companies has only had three negative years out of the past 21 election years since 1928. (Just for the record, I don’t believe in betting on cycles or trying to jump in and out of markets).
Meanwhile, market and money managers (Federal Reserve Bank) try to stay out of the political fray, to hold an even keel. No dramatic ups or downs, so no, a recession is likely at least 18-months to two years away.
Of course, there’s always the unexpected: The trade dispute with China could continue, North Korea could do something stupid, the United Kingdom is being rocked by Brexit. The Russians, the Syrians, Iran. There could be trouble on many fronts. But has the world been much different in the past 50 years? I don’t think so even though some of my friends think the world is ending.
U.S. markets and monetary system have survived. The entire American free-enterprise economy is not going to go out of business overnight. So, I told her to stay positive. A recent Bloomberg News analysts’ survey has the spread is the widest in years between those who are pessimistic about the economy and those who are positive. That confirms my view: hang in there but be prepared for what hopefully will be a mild recession.
Years from retirement? Stay the course.
For those who are working and managing their tax-deferred investments but are years away from retirement --- Stay the course, remain invested in stocks, let markets drop in a recession whenever it arrives. Don’t panic, don’t jump, don’t sell. This is a buying opportunity to reinvest your quarterly stock dividend earnings at a cheaper price. Your dividends buy more stock, they in turn buy more stock.
Already in retirement and managing your nest egg, now?
If you already are living on income from your investments, create a cash fund to draw from during a recession. That’s so that you don’t have to sell your investment principal at a discount to buy groceries if share values decline.
Draw out of your cash fund to get through the market downturn. Keep the rest of your portfolio in the market, continue reinvesting at a discount. How much cash should you have on hand? How about 12 and 18 months, worth? More if our government goes back to the Democrats and taxes go higher.
It’s been so long since we’ve had a recession, we might be a little out of practice. The next one hopefully will not be as bad as the one we remember so well.
"Better to trust the man who is frequently in error than the one who is never in doubt."
-- Eric Sevareid, New York Times commentator and reporter, (1912-1992)
By JULIA ANDERSON
Let’s say you are leaving your full-time job and taking your 401(k) nest egg with you. Are you going to manage it yourself or will you turn to an investment professional?
If you think you need professional advice, here are questions to ask a financial planner/adviser before giving them your life savings. Treat this process like a research project. Take your time. Don’t be uncomfortable asking the uncomfortable questions. It’s your money, your future and your retirement.
Nine questions to ask when choosing or re-evaluating a financial adviser
- How do you get paid? A commission on product sales, fee per transaction, or both? Ask for details.
- Can you manage my assets for a 1 percent or less management fee?
- What’s your background and experience?
- What’s the strength of the company you work for or with?
- What do your clients say about you? Ask for references.
- What are your checks and balances regarding risk vs. earnings reward?
- Will you put your investment proposals in writing?
- What are the potential pitfalls of the investment products you are offering?
- What do other professionals say about you?
Ask yourself what your gut-level comfort is with this adviser. Do you come away feeling good about what you’ve learned, where you’re headed when you meet with him/her?
Don’t hire or continue to use a financial adviser just because they are nice. Do the math at least a couple of times a year. How are your investments doing in comparison to the performance of the S&P 500 (the 500 largest publicly traded U.S.-based companies)?
If the S&P is up by 15 percent year-over-year but your holdings are up only 7 percent in the same time frame then you need to be asking some tough questions. You might do better on your own or by switching advisers.
Studies show that women, while good at budgeting, bill paying and saving, may be less confident when it comes to investing and managing long-term savings. Get in the game, learn the basics. Make sure you are getting the best performance from your investments --- with or without an advisor.
By JULIA ANDERSON
Because of planned and unplanned travel, I have been away from sixtyandsingle.com. The unplanned trip took me to Thailand for a month earlier in the year because of my younger son’s life-threatening bacterial infection.
It was an emergency mission that ended well with him making a good recovery after three weeks in a Thai hospital hooked to an IV-line pumping antibiotics into his body. We were there to support him emotionally, and financially. It's what parents do when kids are in trouble.
It could easily have ended badly. One in three people who contract these fast-moving bacterial infections die. Because he was young and the bacteria seemed most interested in his outer skin layers rather than muscle, he survived. Once out of the hospital, we stayed with him for another two weeks to make sure his recovery continued. From all this, we learned a great deal about Thailand and appreciate why its beaches, charming people and great cuisine attract travelers from around the globe. Thai restaurants in the states are great, but second best to the fabulous dishes we enjoyed while in-country.
Did anyone say, coconut milkshake?!
Interestingly, Thailand has an excellent health care system, especially if you have the money to pay for it at the higher end. A hospital stay for our son that would have cost a quarter of a million dollars or more in the states, came in at about $20,000. We see why people travel to Thailand for medical and dental procedures. They get excellent health care services at a big discount and have a vacation while at it.
Within a month of returning from Thailand, we launched our long-planned Great Motorcycle Adventure with Ken leaving for a solo ride ocean-to-ocean West to East on his BMW K 1600 GTL touring motorcycle. He made the trip in less than three weeks using a southern route (California, southern Colorado, Oklahoma, Arkansas and Tennessee to North Carolina) with stops along the way to stay with friends and family. A nephew lives in Charlotte, N.C., which made it easy for me to fly east to join Ken there.
After putting his toe in Atlantic, he and I began our journey west. Sitting on the bike behind Ken works great for me. I describe the experience as similar to downhill skiing and riding a horse. As a passenger, you must concentrate on the road ahead, lean into curves. That’s while getting the thrill of speed, of wind in your face and being outdoors.
As the passenger, I could enjoy the countryside in ways that don’t happen in a car – winding leafy country roads in Virginia and Tennessee, gorgeous farmland and attractive small towns in Kentucky, Missouri and Kansas and the wide-open country of the Rockies in Colorado, Wyoming and Idaho.
It was a thrilling trip made better by finding the graveyard head stones of my great-great Crabtree grandparents on my mother’s side in Virginia, findng the birthplace in Tennessee of my great-grandmother Orlena Kyle Anderson on my dad’s side and her husband’s headstone (my great-grandfather Moses Anderson) in the Wills Cemetery outside Peculiar, Mo. (near Kansas City)
As one of my Facebook friends remarked about my trip posts, “You have family and friends (living and dead) all over the country.”
I am a lucky woman. My son is on his feet back in the states and working. Our motorcycle ride was a thrilling life-time experience that came off without bad weather or mishap. I am thankful that I have my health and enough resources to pull it all off. Onward!!
I meet women all the time who face job and money transitions and who want to do them right. It’s about building confidence and taking charge of the future. This is your money. No one cares more than you do!
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