Category

Investment Portfolio

What Data is Telling Us About Investors and Investing

By | Investment Portfolio, Investors, SH&J Blog, Tips | No Comments

We all make assumptions about investors, but what does the data actually say? Today we take a look at recent studies and publications to get more insight into the mind of investors.

Increase in Social Responsibility

Big investment firms and banks are embracing corporate social responsibility, both in their own organization and in their investing. Since the United Nations supported the Principles for Responsible Investment Initiative, there has been a growing network of international investors fighting to practice responsible investing. This new network represents $59 trillion in assets. (source)

Sharkey, Howes & Javer Blog | Financial Planners in Denver, CO | What Data is Telling Us

Ready for Retirement

Baby Boomers, who make up the largest population group in the United States, are transitioning into retirement. Experts anticipate that 20% of the population will be over age 65 by 2030, up from 12.4% in 2003. With high numbers moving into retirement, we are likely to see Boomers begin the process of turning their investments into income streams. (source)

Sharkey, Howes & Javer Blog | Financial Planners in Denver, CO | What Data is Telling Us

Increase in Female Investors

75% of women report not working with a financial advisor, although women control over $11.2 trillion of the United States’ wealth. As millennials begin investing, we are likely to see an increase in female investors. More women are starting their own businesses and becoming financially savvy, making them more likely to start investing earlier than previous generations. (source)

Low Financial Literacy

29% of United States households own only retirement accounts and 38% of households have no investment accounts. In a survey to understand the financial literacy of investors, it was found that households with only retirement accounts or with no accounts are significantly less knowledgeable than households with taxable accounts. Even among households with taxable accounts, only 60% are considered to have high financial literacy. (source)

Data about investing and investors is fascinating to us. What is equally fascinating is deciding how the data should or should not influence investment strategies. If you are struggling to develop an investment strategy, reach out today for a complimentary consultation. We would love to talk data and investments with you!

The Pros and Cons of Owning Stock Where You Work

By | Investment Portfolio, SH&J Blog, Stock Market, Tips | No Comments

Many companies offer stock options and stock bonuses to their employees, but is owning stock where you work a good idea? The short answer: it depends. Below are our thoughts on the pros and cons of owning stock where you work.

PROS

One ‘pro’ to owning stock in the company where you work is the added motivation you have for the company to succeed. As an ‘owner’ in the company, your success is tied to their success. This holds true for the employees you manage as well.

More than the incentive to work hard, owning stock in the company you work for can pay off quickly. Often companies offer their stock at discounted prices to employees. Buying stock at a discount can pay off if the company does well. In general, you may want to limit your company stock exposure to 10% of your net worth (or less) to maintain diversification.

Sharkey, Howes & Javer Blog | Financial Planners in Denver, CO | The Pros and Cons of Owning Stock Where You Work
Sharkey, Howes & Javer Blog | Financial Planners in Denver, CO | The Pros and Cons of Owning Stock Where You Work

CONS

Your paycheck is already tied to your employer and tying more of your investment portfolio to the company where you work could significantly increase your risk. While being motivated to help the company grow can positively benefit your investment, it doesn’t mean the company is destined to be successful. Their downfall can mean a big financial loss for you. Remember General Motors, Enron and Lehman Brothers?

THE BOTTOM LINE

Owning stock in the company you work for can be a beneficial part of your financial plan. Talking to your financial advisor before making a decision to invest where you work is a good idea. Call 303-639-5100 for a complimentary consultation.

Will Millennials Ever Retire?

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“60% of Millennials think it is harder to plan for retirement than to stick with a diet and exercise plan.”

Millennials and Retirement

One word sums up how Millennials tend to view planning for retirement:overwhelming. This is a very clear conclusion from this 2015 survey, which reveals attitudes about retirement in the U.S. You can easily guess why Millennials feel this way: soaring student debt, increased cost of living, stagnant wages for college graduates, and a lack of confidence in Social Security and the stock markets.

Diving into the data, it is not surprising that the millennial generation views traditional retirement as a mythical creature, out of reach and unattainable. “The majority of Millennials believe they will not be able to retire when they want to…with 28% believing they will never be able to fully retire.” So why bother planning for something that may not even be a possibility?

Here’s the reality: the concept of a “traditional retirement” is evolving and will continue to evolve. The advent of technology is increasing the amount of work completed remotely, while the drain of commuting to an office Monday-Friday 8am-5pm continues to decrease as technology advances. By the time Millennials begin turning age 65 in the year 2045, the logistics of working will likely have evolved into more flexible hours, a more flexible location, and “commuting” may be a word of the past. Therefore, the desire to fully retire may not be as strong of a pull as it was for their parents and grandparents.

Sharkey, Howes & Javer Blog | Financial Planners in Denver, CO | Will Millennials Ever Retire?
Sharkey, Howes & Javer Blog | Financial Planners in Denver, CO | Will Millennials Ever Retire?

Planning Steps

With this said, however, there will likely come a time where one no longer has earned income and must rely on an investment portfolio, along with other supplemental income sources. Therefore, making sacrifices to save for retirement will always be a key element, no matter which generation your birth year indicates. To create the opportunity to pull back from full or part time work someday in the future requires accumulating retirement savings over working years.

Meeting with a fee-only financial planner could be the first step in tackling an overwhelming goal, such as planning for retirement. For a complimentary consultation, call Sharkey, Howes & Javer today.


Source: “Will Millennials Ever Be Able to Retire?” research presented by the Insured Retirement Institute and The Center for Generational Kinetics