$MART WOMEN $MART MONEY

Transcription

1 $MART WOMEN $MART MONEY Presented by: Suzie Jones, CFP Copyright 2017

2 There s your age and then there s your. Financial Stage

3 20-35 Yr Old Laying the Foundation: More Out Than In gaining a sense of independence Graduate from college 1st job 1st rent/mortgage payment 1st car 1st car payment 1st credit card 1 st budget Begin saving Begin 401(k) contributions Begin investing

4 35-55 Yr Old Building the Nest Egg: Building Assets the Begin Nest E: to Grow feeling a sense of momentum n Saving for children s college Begin paying for children s college Larger house Cars, boats e.g., more toys Save and Pay for wedding(s) Begin to reduce debt Income increasing Maximize workplace benefits Ability to invest increases Assets begin to become significant

5 55-65 Yr Old Ready To Let Assets Take Care of You acknowledge a sense of reality Highest income earning years Pay off mortgage/pay off debt Estate planning/gift planning Focus on healthcare expenses Focus on sources of income other than salary Wealth management needs Budgeting becomes crucial Financial independence Retirement Focus on: Do I have enough?

6 The statistics prove it 50% of women are the primary breadwinners in their households Women own 40% of the businesses in the US By 2020, women are expected to control $22 trillion in personal wealth

7 THE REAL COST OF THAT LATTE! $5.00 a day for one yr = almost $2,000 Over 30 yrs = $60,000

8 LET S ADD A BLUEBERRY MUFFIN! $10.00 a day for one yr = $3,650 Over 30 yrs = almost $110,000!

9 PAY CASH FOR A $25,000 CAR??? MONTH 31 HOW LONG WILL IT TAKE? SAVE $10.00 A DAY FOR JUST 6.8 yrs!

10 4 STEPS TO FINANCIAL FREEDOM 1 ST FUND AN EMERGENCY FUND WITH A MINIMUM OF $1,000 3 rd SAVE 3-6 MONTH S EXPENSES 4 TH INVEST! 2 ND PAY OFF CREDIT CARD DEBT

11 HOW MUCH INVESTMENT RISK CAN YOU TOLERATE? LET S FIND OUT!

12 Before you can begin learning about the market, you must first educate yourself about you. Let s Determine Your Risk Personality

13 Risk Quiz 1. Approximately how many years until you retire? a. Within 2 years 0 b. 2 to 4 years 1 c. 4 to 7 years 2 d. Over 7 years 5 2. At retirement, what percentage of your income do you expect to come from your savings and investment portfolio? a. Less than 25% 0 b. 20% - 35% 1 c. 36%-50% 3 d. More than 50% 4 3. I would be inclined to decrease my investment in the stock market if my investments performed poorly. a. Agee 0 b. Somewhat Agree 3 c. Disagree 7 4. In order to prevent losses, I prefer investments that have little chance of losing value. I am willing to accept the lower return associated with safe investments. a. Agree 1 b. Somewhat Agree 5 c. Disagree 10

14 Risk Quiz 5. Which answer best describes your attitude about coping with inflation: a. I ll be satisfied if my investments keep pace with inflation. 1 b. I would accept some risk with my investments to moderately outpace inflation. 4 c. I would accept significant risk with my investments to significantly outpace inflation On a $10,000 investment, which investment performance are you most comfortable? Best Case: $ 800 gain (+8%) 0 Worst Case: $ 200 loss (-2%) Best Case: $2600 gain (+26%) 4 Worst Case: $ 800 loss (-8%) Best Case: $4,800 gain (+48%) 7 Worst Case: $2,400 loss (-24%) 7. If your stock investments went down 15% over 3-month period, how would you react? $10,000 becomes $7500! a. I would move ALL my money OUT of the stock market. 0 b. I would move SOME of my money OUT of the stock market 4 c. I would NOT CHANGE the amount I have in the stock market. 8 d. I would move money INTO the stock market. 10 Add up your points:

15 IF YOU SCORED YOU MAY BE CONSERVATIVE: Little fluctuation in your balance Preserve your investment Receive some income Not willing to risk big swings LOW TOLERANCE FOR INVESTMENT RISK YOU MAY BE MODERATE: Tolerate moderate balance fluctuation Money to grow with some income Tolerate more risk Protection from market ups and downs MODERATE TOLERANCE FOR INVESTMENT RISK YOU MAY BE AGGRESSIVE: Seek aggressive growth Can definitely tolerate wide swings in the market value of your account Want the highest potential for growth HIGHER TOLERANCE FOR UPS AND DOWNS OF THE MARKET

16 So You ve Picked Your Roller Coaster! NOW WHAT!

17 3 PRIMARY INVESTMENT OPTIONS CASH BONDS STOCKS

18 WHAT S YOUR PIE? Years to Retirement Less than 4 Years 4-10 Years More than 10 Years Your Risk Driven Asset Allocation: Green = Cash% Blue = Bond% Red = Stock% Aggressive points Conservative 0-20 points Moderate points

19 FOUR GOALS TODAY 1 LEARN ABOUT YOUR INVESTMENT RISK TOLERANCE 2 - UNDERSTAND YOUR PERSONAL ASSET ALLOCATION YOUR PIE 3 LEARN ABOUT EACH SLICE OF THE PIE 4 KNOW WHEN AND HOW TO REBALANCE YOUR PIE

20 CASH BONDS STOCKS o CASH IS KING o RETURN OF YOUR $ - NOT A RETURN ON YOUR $ o RISKIER THAN CASH o PAYS INTEREST o SUPPLEMENTS INCOME o RISKIEST OF ALL o GOAL IS GROWTH o CAN PAY DIVIDENDS

21 BONDS YOU ARE THE BANK! YOU ARE THE LENDER! YOU ARE IN CONTROL!

22 BONDS MONTH 31 BOND INVESTORS LEND MONEY TO: THE GOVERNMENT AN ESTABLISHED COMPANY A START UP COMPANY FOR A CERTAIN AMOUNT OF TIME TO RECEIVE INTEREST QUARTERLY

23 HOW BONDS WORK 5-YEAR $20,000 BOND THAT PAYS 5% INTEREST PAYS $1,000 A YEAR FOR 5 YRS OR $250 A QUARTER

24 BONDS: 3 LEVELS OF RISK / QUALITY RISK Gov t Low Corporate Medium Junk/High Yield High RETURN 1%-2% 3%-4% 6%-9%

25 A LITTLE MORE ON BONDS LENGTH OF TIME SHORT TERM = YEAR OR LESS MEDIUM TERM = 1-10 YEARS LONG TERM = YEARS Q UA LITY GOV'T CORP HI YIELD LENGTH O F TIME SHO RT M ED LO NG

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27 BULL AND BEAR MARKET Bull Market - UP - optimism, investor confidence, and expectations that strong results will continue Bear Market DOWN - conditions in which prices of securities are falling or expected to fall over an extended period of time

28 WE ALL LOVE THE BULL!

29 STOCK MARKET: 3 LEVELS OF RISK LARGE Large Cap MEDIUM Mid Cap SMALL Small Cap CAPITALIZATION

30 A LITTLE MORE ON STOCKS Rebalancing INVESTMENT STYLE Value Stock Fairly Priced On Sale Growth Stock Potential to Grow Has Momentum Blend Stock Combination of Value and Growth MARKET CAPITALIZATION LA RGE MEDIUM SMA LL VA LUE BLEND GROWTH

31 STOCK AND BOND DIVERSIFICATION STOCKS INVESTMENT STYLE VA LUE BLEND GROWTH BONDS LENGTH O F TIME SHO RT M ED LO NG MARKET CAPITALIZATION SMA LL MEDIUM LA RGE Q UA LITY HI YIELD CORP GOV'T YOU OWN YOU LOAN

32 GO IT ALONE?

33 Mutual Funds KODAK IBM FORD Mutual objective i.e.; invest in large companies. GM DELL GE Contains many stocks, bonds and has cash. EXXON ABC SONY J&J AIG ENRON Provides diversification. Managed by a professional investment manager.

34 MUTUAL FUNDS BOND FUNDS HIGH QUALITY MEDIUM QUALITY LOW QUALITY SPREAD YOUR RISK STOCK FUNDS LARGE CAP MID CAP SMALL CAP

35 IT WAS THERE THE WHOLE TIME! FIDELITY T. ROWE PRICE VANGUARD LARGE CAP GROWTH FUND MID CAP VALUE FUND HIGH YIELD BOND FUND

36 HOW DO YOU COMPARE THE MUTUAL FUND S RETURN TO ITS BROTHERS AND SISTERS OR PEER GROUP KNOW IF A MUTUAL FUND HAS GOOD PERFORMANCE? PEER GROUP = ALL MUTUAL FUNDS WITH A SIMILAR INVESTMENT OBJECTIVE: LARGE CAP SMALL CAP CORPORATE BONDS

37 COMPARE PERFORMANCE AGAINST AN APPROPRIATE INDEX LARGE CAP INDEX = S&P 500 INDEX MID CAP INDEX = S&P 400 INDEX SMALL CAP INDEX = RUSSELL 2000 INDEX BOND INDEX = S&P 500 BOND INDEX

38 WHAT S AN INDEX? An imaginary portfolio of securities. You can t actually invest in an index. Not managed. Has no emotion. Way to measure the performance of a stock, mutual fund or investment manager.

39 INDEX RETURNS

40 DON T LET EMOTION GET THE BEST OF YOU! TIME IN THE MARKET VS MARKET TIMING HYPOTHETICAL GROWTH OF $10,000 INVESTED IN THE S&P500 FROM (25 YEARS) For hypothetical purposes only.

41 DO YOU KNOW WHAT YOU RE PAYING? FRONT-END LOAD FEE PAID WHEN PURCHASED MUTUAL FUND FEES 12b1 FEE QUARTERLY FEE PAID TO BROKER FOREVER. REDUCES RETURN ON FUND. NO-LOAD NO FEE TO PURCHASE IF BUY THROUGH A BROKER, THEY MAY CHARGE A SMALL TRADING COMMISSION. INTERNAL EXPENSE QUARTERLY FEE PAID TO MF COMPANY. REDUCES RETURN ON FUND.

42 HOW DO YOU ADJUST FOR MARKET SWINGS?

43 REBALANCE BACK TO YOUR ROLLERCOASTER ORIGINAL ALLOCATION MARKET MOVEMENT IMPACT Stocks 60% Bonds 35% Stocks 70% Bonds 25% Cash 5% Cash 5% REBALANCE BACK TO ORIGINAL ALLOCATION

44 ANNUAL REBALANCING RESCUES PROFITS SELL HIGH / BUY LOW BENEFITS REMOVES EMOTION AVOIDS MARKET TIMING

45 MAKE A DATE TO REBALANCE MONTH 31 SIT DOWN WITH YOURSELF / PARTNER / ADVISOR 1. HAS YOUR RISK TOLERANCE CHANGED? 2. NEED TO RETAKE THE QUIZ? 3. REBALANCE ONCE A YEAR DISCIPLINED INVESTING UNEMOTIONAL

46 BASIC TO ADVANCED

47 ALTERNATIVES

48 THREE QUESTIONS HOW ARE MY ACCOUNTS INVESTED NOW? DO MY INVESTMENTS FIT ME? HOW MUCH RISK AM I ACTUALLY TAKING?

49 WHAT NEXT? 1. Gather Investment Statements 2. Determine Your Current Asset Allocation 3. Decide If You Need to Rebalance

50 FIRST THINGS FIRST 1 ST FUND AN EMERGENCY FUND WITH A MINIMUM OF $1,000 3 rd SAVE 3-6 MONTH S EXPENSES 4 TH INVEST! 2 ND PAY OFF CREDIT CARD DEBT

51 I haven t been everywhere or done everything, but it s on my list. - Susan Sontag

52 ENJOY THE RIDE ON THE ROLLERCOASTER YOU PICK! Training Resources Consulting, LLC Copyright 2017

53 THANK YOU! Website: