Money Matters in a Post-Election Trump World

So, last week I was nervous and optimistic. And, many of you left comments on your reaction to my pre-election thoughts. Thank you for your continued engagement and thoughts. This week, I am still nervous and optimistic, just in a different way as I’ve now had several days to process and reflect. I’ve previously written about my choice in Hillary for President. But, I voted for a candidate who did not win the election.  I’m going to take it as a given that you can surmise why I’m still nervous, but here's how I’ve summed up my optimism, though frankly somewhat tempered:

I’m pouring my emotion into the things I can control and that can have impact, including trying to equip you with wealth-building and investing strategies and tactics.  I want to close the divide among those who have been utilizing wealth-building strategies and those who want to empower themselves to get some too!

Whomever you voted for (or if you chose not to vote at all – which is a topic that would take me a whole book to write about), we are all saddled with the question – how do we as individuals, which ultimately make up this country, move forward together under President-elect Trump? I had to deal with this personal reality this past weekend when I had to tackle this very question with my family members who voted for Trump. Yes, it has been up close and personal and time will ultimately judge us all!

Interestingly enough, the conversation circled back to how this Trump Presidency will affect our wallets and what we could do as individuals to create more opportunity in our lives across the board. So, here’s a few of my own takeaways on what we should be looking out for.

A Trump Presidency on Our Money:

Stick to Your Investing Philosophy. As we saw in the hours leading up to the stock market open on the day of the election, the market will show you how it feels about a particular event. The market’s rise over the week in the wake of a Trump win totally surprised many people, including some of the smartest economists around the globe. We are reminded that we cannot time the market.  According to a really good NYT article, the market is surely telling us that companies should benefit from a Trump Presidency. Only time will tell. Amidst uncertainty, we need to stick to our guns with our investment philosophies.  If you don’t have an investment philosophy yet, what’s holding you back? Send me your thoughts.

Companies Still Move On. Last week, one of my favorite companies, Shake Shack,reported very good earnings, which positively reflected that consumers value their product and their innovation on BURGERs and MILKSHAKES. Companies will keep moving - Oh My!

Entrepreneurial Wealth Matters. I am hopeful that this election will spur more entrepreneurship activity and innovation, which tends to drive wealth over time. If we really want to close the income equality gap, which was a major focus of the overall Presidential election, we need to begin to shift our thinking toward executing (and supporting) entrepreneurial endeavors. We all know that business formation typically requires money, and so we should be asking ourselves – can we allocate some of our funds to start businesses ourselves or invest in others? (As you might guess, this is a sneak peak to 2017…oh yeah!)

I know it’s been emotional whiplash for all of us over the last year, so I hope that you take time to enjoy the people in your life – albeit a Hillary or Donald supporter – because it’s these people that drive us to work hard, invest, and build wealth.

Preview to Money and 2016 Presidential Debates

It’s been a difficult week with all of us suffering from the continued racial discord in our country. Amidst it all, the stock market marches onward, and it was a rocky week with the Fed’s commentary on the potential future upward trajectory of interest rates.  

So much is going on, right?

 

If you’re like me, you are getting fired up for the debates tonight. If we’re lucky, we will witness a sparring between Hillary and Donald on the issues. Unfortunately, most debates (and the associated gains or losses for the candidates) are based on how candidates look saying stuff, rather than what they say, as outlined extensively in The Atlantic’s recent “Who Will Win” article. I hope that we do not fall into this trap, especially because the significance of image in this is election seems even greater than in the past.

 

That said, I want to share several money issues I think you should be focused on during this election season.

 

 

 

Money Issues for Election 2016

 

According to a July Pew Study, voters cite that the 5 top issues of this are:

  • The economy
  • Terrorism
  • Foreign policy
  • Health care
  • Gun policy (Lord knows that we in Chicago need that last one)

 

Yes, what happens in the economy will affect your money, but I also want to see a discussion on pressing issues that will influence your pocketbook - child care and maternity/paternity leave, student loan debt, and social security.

 

On the child care front, I am even more sensitive to this issue after listening to Dr. Anne-Marie Slaughter give a talk at the Chicago Foundation for Women. Regardless of whether you have your own kid or not, this issue touches us all. You remember Dr. Slaughter, right? She wrote the article “Why Women Still Can’t Have It All,” four years ago. Last week, she said something that shocked me:

 

“Child care costs more than rent in each of the 50 states.”

 

I fact checked it and found a few studies, one in particular showing that daycare fees for two children (an infant and a 4-year-old) exceeded annual median rent payments in every state in the U.S. last year. This is crazy, especially since this study doesn’t even account for the quality of child care, which will surely impact the price.

 

Regardless of who becomes the next President of the U.S., nothing that he or she will do will take shape for some time. In the meanwhile, we all still must grapple with what can each of us do to improve our situation today. So…..

 

Here’s Some Money Advice

With three months to go in this year, I want to challenge you to continue to make smart money decisions. I asked some of you to share successes of failures. Thank you for all the responses! Continue to send these my way.

 

I want to give a shout-out to Lynda M., who shared that she is working on an entrepreneurial venture and taking steps to build her product. If you remember nothing else, remember that wealth creation through entrepreneurship is a viable option. Congrats, Lynda for taking the big leap of faith to invest in you.

 

Have a wonderful week and I hope you continue to find joy in all our craziness.

 

 

3 Investing Takeaways Before I See Ya in September!

We have a few weeks left before it’s “back to school” and “back to work,” and thus I’m saying goodbye for the remaining weeks of summer. Yup, I work hard to play hard and it’s break time.

I told you that I’m all about an Olympian attitude, and it’s time to finish strong.

So, I figured I’d leave you with 3 takeaways before I head out: 

  1. Stock Trifecta – Last week, all three major indices reached new heights on the same day last week. And, by major, I mean the Dow Jones Industrial Average, the Nasdaq Composite, and the S&P 500 Index. Forget what these mean? No worries – check out my video on the stock market. 

    Why should you care? Because you should be thinking about how your portfolio has been doing and whether you should rebalance or taking profits somewhere. Remember, stocks don’t continue to go up forever. Most people, including myself, are horrible at timing the market and thus, staying disciplined on rebalancing is key. 

  2. Is Facebook Really Worth an Investment? Yes, Zuckerberg has been all over the news for his desire to put an Oculus on all 1.7 BILLION Facebook users. If you missed the Bloomberg article about it, check it out here. I spent some time with my mother’s investment club over the last month and they weighed the pros and cons of investing more money into this one (Don’t worry – I got permission to write about it). 

    Before you start pondering whether you want to invest in the individual stock, check out your current mutual funds or ETFs and see if you already own Facebook shares. Many people want to own the stock outright, but you might benefit from the diversification that comes with owning Facebook as part of a larger portfolio. 

  3. My Roboadvisor Account Disappointed. In last week’s post on the Rio Olympics, I told you that I would let you know the results of my 1-year use of the roboadvisor Betterment. I analyzed the results and it is clear that I underperformed the S&P 500 Index over the same time period even though I held 90% stocks and 10% bonds. 

    When I dug deeper, a big reason that I didn’t keep up is that my portfolio had some international stock exposure (shall I remind you of Brexit???). More alarming is that account FEEs ate up some of my returns. Because I only invested $50 per month, I had to pay $3 per month in fees. While that doesn’t seem like a lot, it’s 6% ($3 divided by $50) of my monthly investment – Yikes! I have yet to get a hold of Betterment’s customer service, but when I do, we will walk through the details.

My recommendation? If you’re going to use Betterment, auto-deposit at least $100 per month so that the annual fee is 0.35% on assets.

Well, it’s been real this summer. I hope you get your break on and enjoy time with family and friends. And, if you have a good money book that you want to recommend to me, please don’t hesitate to leave a comment below. I’m going to need lots to reading material on long my trip to Japan in a few weeks.

Enjoy Labor Day, and I’ll be back in mid-Setpember!

How the Upcoming Election is Going to Effect Your Money

Last week, I was full of emotion as I listened to our President and First Lady at the Democratic National Convention. In my political conversations with family and friends, we often talk about whether or not we’ll be any happier with a new President in office. Trust me, you don’t want to read our family emails – they are fierce!

Regardless of what side of the aisle you sit on, I think their speeches were as patriotic as one can get. And, I had to wipe my eyes during President Obama’s call for us to do our part.

Well, my part involves continuing to spread the gospel on all things leading to greater economic prosperity – wealth-building! 

So, as we enter less than 100 days to before our elections, I’ve been asked a very salient question – what impact will the election have on my portfolio and the stocks that I own?

My response – let’s see what the data says. From this Kiplinger’s article, here are a few things to keep in mind and some of them might surprise you:

1.  “Since 1833, the Dow Jones Industrial Average has returned an average of 10.4% in the year before a presidential election, and nearly 6%, on average, in the election year. By contrast, the first and second years of a president’s term see average gains of 2.5% and 4.2%, respectively.” – The data speaks truth on what we can potentially expect.

2. “When it comes to your portfolio, it doesn’t matter much which party wins the White House” – we shouldn’t focus on who wins.

3. “The stock market has an uncanny ability to predict who will call the White House home for the next four years. If the stock market is up in the three months leading up to the election, put your money on the incumbent party. Losses over those three months tend to usher in a new party.” – Oh wow!

What to Do?

I want to encourage you, before you start trying to figure out how the election is going to help/hurt your portfolio, to ask yourself: have I taken care of the essentials?

  1. Looked at your 401k/403b plan and made any necessary rebalancing decisions
  2. Revisited your 2016 plan and figured out whether you’re on track
  3. Checked in with your partner/significant other on what might have changed in the last 6 months.

In case you missed it:

Fear is the number one thing keeping people from investing in the stock market. The only way to get over that fear is to face it. In the “So You Think You Know the Stock Market" episode of Charisse Says that was featured on the Make It Better website, I break down exactly how the stock market works in a fun digestible way. I hope the knowledge you will gain from the video will help you face your fears and start investing.

Think you don’t have enough money to start investing? Check out the Words & Money podcast hosted by Tess Wicks that I was a guest on. During the podcast I explain that you can start investing even if you have less than $1,000 to spend.

What do you have to say? Leave a comment below.

3 Takeaways From What's Happened in the Bond Market

It's already mid-July and I hope life is treating you well. Well, there's plenty of news to distract me from the daily grind and my investing goals. I would suspect that you might be in the same boat. The thing I have to remind myself is that no one else is going to be responsible for my money situation except me. I need to continuously focus to make sure I keep my eye on the prize and understand the forces moving around me. What's happening in the bond market is one of the major forces that is happening around me.

Bonds are NOT SEXY (although any bond traders might disagree) and we don't talk about them as much as we talk about stocks, but they are important.

I mean, when's the last time you had a conversation about them?

I'm changing that today.

3 Takeaways From What's Happened in the Bond Market

  1. Long-term bond rates are at historic lows. I mean, over the last 227 years of rate history, they are at their lowest point.  When rates are low, bond prices are high, which means that investors are piling into bonds for safety --- flight response.
  2. The bond market is telling us that economic growth looks anemic Long-term rates help tell us about the future economy. When rates are low, it means that growth expectations are low.
  3. Relatedly, interest rates are expected to remain low for the foreseeable future. Prior to Brexit, investors were expecting interest rates to rise. But, the current interest rates tell us that this is not the case. So, it will be cheaper to get car loans, home loans, and any other financing that is priced off of rates. Pay attention!

What's next?

Digest this and leave a comment below with your thoughts on what’s happening with the bond market, and let me know if you questions. Next week, I’ll go over how you make money from bonds --- really, how do they actually work? If there are any other answers you want with respect to bonds leave a comment below. I would love to hear from you!

Trust Yourself Before you Brexit

In case you missed it, the markets were just horrible today. Don’t look  – most of the stocks are in the red. Unless you were hiding under a rock (hey – no judgment, I get under a rock sometimes too), I’m sure that you now know that on June 23rd, British voters approved a referendum to leave (or exit) the European Union (EU), hence Brexit. We touched on this very briefly last week. Here’s what’s important to me when I think about the effect on the stock market:

  • European banks crash – really bad for European markets, and the impact is surely tied to global markets and thus US downward spiral
  • The British pound (currency that is) fell to its lowest level in decades – currency markets heavily affected (and now it will be cheaper to go to London)
  • Prime Minister, David Cameron, who supported the UK remaining in the EU, announced he will step down in October of 2016 – political instability leads to market fears
  • The US Federal Reserve will probably not raise interest rates any time soon – stock market gets very jittery

Notice the common theme? Markets are crashing around us. It will take time for the markets to figure this one out.

All of the chatter can make you feel as if the best place for your money is in a savings account.

Trust me, flocking to safety is a direct result of fear. Flocking to safety can sound appealing in the short-term, but over the long-term, sticking to an investment philosophy that can withstand market turbulence is key.

Now, “short-term” and “long-term” mean different things to different people, so I’ll let you decide what’s best for you. One of the best pieces of advice I got is when I was working at JPMorgan and picking stocks for a living, came from my portfolio manager (thanks, Jonathan), and he said to me – “Charisse, in times of market uncertainty, sometimes you got to wait it out and sometimes you got to seize opportunity.” His words ring true today.

So, before you BREX yourself from the market (or exit), check in with your financial advisor, revisit your investment philosophy, and develop a plan to wait or act.

Top 10 Charisse Sayings Over the Past Year

I promised you I’d get you my top 10 rules to live by, which I’ve accumulated over the past year. In honor of the one-year anniversary, I want to share these with you. After all, I do care about you.  

  1. Be the CEO of your money – Your true badass self
  2. Don’t be afraid of the stock market – it has historically returned almost 7% per year annually
  3. Make someone else hold you accountable, your Money COO
  4. Always date your financial advisor
  5. Allocate less than 20% of your gross income to debt repayments
  6. Take advantage of dollar-for-dollar matching when offered by your employer.
  7. You can invest outside of your 401k on your own – brokerage account and/orroboadvisor is a good option
  8. You cannot time the market - Don’t try
  9. Get a Roth IRA if you can swing it
  10. Diversify your portfolio and get low-fee products to help boost your returns over time

Happy week! Keep that head up.

The 1 Year Mark

Today marks the 1-year anniversary of the Charisse Says platform. Woot Woot! I could not have made it thus far without your continued interest in reading my newsletters, watching the Charisse Says show, leaving comments on my blog, and feedback to always make the platform better. More importantly, I am confident that in these last 365 days, you took one action to improve your money situation, albeit investing boldly or taking action in some other way. Our 1-year anniversary couldn’t have come at a better time – right on the heels of Father’s Day. Shout out to all the Dads out there and I hope your loved ones treated you kindly. My father, Frank Conanan, is one-of-a-kind and I would be remiss if I didn’t share one piece of money advice he gave me. He said “Charisse, never let your head get too big from financial success that you forget about where you came from.”

I know, wise right? [Thanks, Daddy!]

Over the years, my father’s wisdom has meant a few things to me:

  1. When you have financial successes, remember what it is was like without it
  2. Continue to diligently evaluate your financial opportunities
  3. Others around you might not be in the same boat, so share what you have with them

I hope this advice is as helpful to you as it’s been to me. Onward!

Celebrating the 1-Year

In order to celebrate the one-year in true Charisse fashion, I am going to send my Top 10 Investing Philosophies from the past year next week. Yes, a wrap-up of all things I’ve tried to share over the past year all in one place. If you’re learned anything from me, please let me know what you’re favorite investing tip has been.

The Past Week

If you missed out on any of the big financial news this past week, here’s a few pieces that have might have implications for you:

  1. Brexit – The Brits are pushing in favor of leaving the EU. And, stocks are all over the place on the news. Pay attention? Yes, but this won’t effect your individual holdings much.
  2. Marisa Mayer in Trouble – Yup, the Yahoo CEO was caught out there making side deals. Are you a Yahoo investor, or does your 401k hold a competitor to Yahoo? Pay attention.
  3. Warriors Lose – I am a Warriors fan and it pained me to see them fall to the Cavs. I now must ask myself, will Nike or Under Armour benefit? Remember when we talked about the effect that Steph Curry has on Under Armour’s stock price.

Feel Free to Join Me

This Saturday, June 25th, I will be speaking on the topic of making your money work for you through investing at Conversation Magazine's The Investments Brunch in Chicago. If you’re in town, I’d love for you to join me.

My Heart Is Heavy

Yes, it is true – my heart is still heavy as I reflect on yesterday’s Orlando massacre. Outrage? Yes. Sadness? Yes. Helpless? Yes. Silent? No.

As someone who frequented many clubs during my late teens (shhh….don’t tell my Mom) and during my 20s in NYC, I think –“that could have been me.” I hope and pray that you and your family have been spared any personal association.

Like you, I feel like I’ve had too many “heavy heart” days over the last couple of years. 

On one hand, these moments make it hard to think about investing and money.  On the other hand, these moments compel us to support causes financially, protect ourselves from unforeseen events by getting insurance, and/or make us want to leave a financially legacy for those coming after us.

Wherever you find yourself on the spectrum, go with what feels right for you.  Leave a comment on my blog and let me know where you stand, if you feel so move.

With that, we’ll pick back up next week!

Hugs,

Charisse

5 Steps to Turn Your Financial Pain into Power

As we continue to mourn the loss of Muhammad Ali, one of the most prolific athletes and fearless leaders of our time, I am reminded of his charm and wisdom – so infectious. This quote of his sticks out:

“Only a man who knows what it is like to be defeated can reach down to the bottom of his soul and come up with the extra ounce of power it takes to win when the match is even.”

Powerful, right?

Well, we can all take a page from Ali’s approach of turning defeat (and the pain that accompanies it) into power.

This is especially relevant when it comes to your money. Everyone goes through financial pain, and it is no joke. I experienced this most recently when one of my stocks, GoPro (Ticker: GPRO), went into the toilet. I said it – the stock is down 30% since the beginning of the year. PAINFUL as I see the red ink signaling that I have lost money! (Remember – I haven’t sold the stock yet so it still is a paper loss.)

So, what is one to do when pain comes your way as it has come mine?

5 Steps to Turn Financial Pain Into Power 

  1. Acknowledge the financial pain to yourself.  As easy as it is to curl into a ball, resist this temptation. One way to do this is to focus on what’s going right in your portfolio and recognize that it’s not all bad. Whether your pain comes from a bad stock or loss of income, acceptance is first.
  2. Share your financial pain with others who care. Notice I said those who care.Your trusted friends and family need to know what’s keeping you down. I trust you!
  3. Revisit your financial goal. You must ask yourself why you invested in a position and whether those reasons still hold up.
  4. Make a decision to mitigate your financial pain. If the financial goals are still valid, hold tight and assess whether you should invest more, wait it out more, or cut your losses.
  5. Move on, in POWER. Take your mistakes into consideration and make the next financial decision with the full comfort that you know a little more than you did before.

Other Helpful Resources to Motivate You This Week

I spent a lot of time this week digesting powerful video content in taking action and beingmy badass self. One that stood out is a song called “God’s Intentional” by Travis Greene.  Regardless of where you fall on the spectrum of faith, I think you’ll get a kick out of the words – it’s one of my new favorites!

Go Get ‘Em