StrongHer Money

I’m curious, what’s my tolerance for risk?

What is ESG investing?

I haven’t invested before, the market is down from its highs, should I get invested now even if I’m scared?

It’s always hard to overcome your emotions when you are making investment decisions. It’s our savings, and so we pretty easily feel the thrill of gain and the sting of loss on a personal level. Those extra couple of dollars might mean a nicer car or a trip, while losses pretty immediately translate emotionally into lost opportunities and safety down the line. The problem is that investing with an emotional backdrop typically leads to poor investment choices. We call it fear and greed. When everyone is fearful and the market sells off, history would suggest it is a good buying opportunity. Similarly, when everyone is greedy and the market is racing ahead, it may be a good idea to be a little more cautious. In general, the best way to take your emotions out of it is to be systematic in your approach. Save the same amount, every month. Pick a portfolio that doesn’t take more risk than you can handle in a down market. Stick to the plan and ride through cycles, both on the highs and the lows. Be patient – your savings and retirement journey will be measured in decades, not months or weeks. If you keep those tenants in mind, you should wind up where you need to be over time.

When the market is at an all-time high should I wait to invest?

The short answer is no. There is nothing that says a market that is at an all-time high won’t go higher. The reality is that nobody can accurately and consistently predict what the market will do. What we do know is that investing is critical to reaching long-term goals, especially for women. The earlier we start investing, the better chance we have at successfully reaching our financial goals. A plan that allows for systematic investing (same day of every month, for example) can help take the emotion out of investment timing and keep the focus on your goals instead.

What is the market?

When people say ‘The Market” they are often referring to the performance of the S&P 500 stock market index. This index is based on the market capitalization (the overall value) of the 500 largest U.S. Companies. The Dow Jones Industrial Average, often called the Dow, is an index based on the 30 largest U.S. companies.

Whats is the difference between mutual funds and ETFs?

ETF stands for Exchange Traded Fund. It is an investment fund that trades like a common stock. ETF’s are also known as index funds, as its value is based on the changes in value of the whole market it represents, not individual securities. A mutual fund is an investment strategy that allows you to pool your money together with other investors to purchase a portfolio of stocks, bonds, or other securities.

What is ESG investing?

ESG stands for Environmental, Social, and Governance – factors used to determine how socially responsible or socially conscious a company is. If investing in socially responsible companies is important to you, get in touch with us to see how our ESG Portfolios may be a solution to helping you reach your financial goals.

What are stocks, bonds, and commodities?

Your investments!

Stocks — Ownership interest in a company

Bonds — Debt issued by a company or the government. The bonds are secured against the assets of the issuer with a guaranteed rate of return.

Commodities — Physical goods such as corn, gold, coffee, and oil that are sold in global markets are called commodities.

What is investment risk?

Investment risk is the possibility that prices will change in financial markets which results in financial losses. The two main types of investment risk include market risk (systematic) and specific risk (unsystematic). Specific risk is associated with individual company-specific risks, like management, labor quality or environmental issues. Specific is considered avoidable by proper diversification of investments. Market risk, however, is associated with changes in the overall market or segments of the market and cannot be mitigated by diversification.

What is risk tolerance?

Risk tolerance is the extent to which an investor can withstand variability in returns on investments. For example, an investor with low-risk tolerance prefers less variability in their investments and may prefer more conservative options with less fluctuation. This could also be referred to as loss aversion, where avoiding losses is preferable over acquiring gains.