Investing

Congrats on your special day! As you begin your journey together, you should talk about money. Here are 5 things every newlyweds should know from Wise Bread: “Confidence is not the same as skill. You probably have different comfort levels with risk. Your best first investment may have nothing to do with the stock market. You have some control. The future arrives faster than you can imagine.” (wisebread.com)

A study by Michel J. Dugas, Patrick Gosselin, and Robert Ladouceur observers about uncertainty and worry: “Considering that daily life is fraught with uncertain situations, individuals who are intolerant of uncertainty may perceive several ‘unacceptable and disturbing’ events in the course of a single day.” If you’re watching CNBC or Fox Business, you will hear all the news about the market downturn. That fear can induces investors to make hasty decisions based on the feeling of uncertainty even though it’s a bad idea. To accept the uncertainty in our our financial life, Carl Richards on The New York Times says: “We can build a portfolio that matches our goals. We can own lots of different kinds of investments, with the knowledge that most of the time, they won’t all fall sharply at once. We can keep the costs of those investments down. But after we’ve nailed down all those things, there’s still going to be uncertainty in the air. The sooner we can accept that the better. That’s life. That’s reality.” (nytimes.com)

Stephen T. Diltz, senior financial advisor, said: “Financial issues consistently are among the top reasons why marriages fail; complex emotions are tied to money. Whatever a couple’s biases, hopes and expectations are about money, they should commit to the responsibility of open and regular dialogue at the time they combine their finances.” US News & World Report offers 10 tips from financial experts to achieve marital and financial bliss. Newlyweds should get fresh by openning new accounts. Couple should also start joint account to make saving and spending more transparent. If you’re re-married with childred, you need to plan for separate assets.  And prenup can be a good thing. (usnews.com)

The folks at Money Ning always recommend individual investor to buy low cost index funds. Here’s their view: “Low cost index funds on the other hand are much less volatile. No one will become rich overnight, but it is a much more dependable way to investing in equities. It gives us comfort that our portfolio wouldn’t get crushed if something horrible happens to any particular company (e.g. Enron), and will help us better see the long term benefits of investing in the stock market.” (moneyning.com)

While the United States is an economic superpower, we’re only ranked around the middle of developed countries when it comes to financial literacy for young people. Schools are not doing a good job educating our children about personal finance. Instead, parents must teach their children the basic financial knowledge to succeed in life. Here are three financial lessons from the Motley Fool for you to teach your children how to become financially literate: “How to open a bank account and balance a checkbook, how to wisely and effectively manage credit, and how to use compounding to your advantage.” (fool.com)

Joni Lindquist wrote for Financial Planning Association of Greater Kansas City: “It occurred to me that building a Super Bowl team has some similarities to building your own personal financial plan. The obvious one is that both require discipline to be successful. A great football team needs the discipline to follow the game plan, with individuals executing their assigned task on every play. It takes physical discipline to get in shape to play the game at the highest level. When it comes to personal financial planning, it also takes discipline to stick to your plan and dedication to advance your career and increase your income.” Here are the suggestions: Clarifying and setting goals, building a plan, and taking action. (kansascity.com)

Canadian Couch Potato recently overhauled his portfolio to switch to a three-fund portfolio, but he got emails from his unconvinced readers. To explain why simple is still a hard sell, Canadian Couch Potato cited some insights from Ben Carlson’s book, A Wealth of Common Sense. Carlson observed that, “I’ve spent my entire career working in portfolio management. This experience has taught me that less is always more when making investment decisions. Simplicity trumps complexity.” Carlson also explained that “trying harder does not mean doing better in the financial markets. In fact, trying harder is probably one of the easiest ways to achieve below average performance.”

The White Coat Investor has a good advice for individual stock investors or those who are tempted: Picking individual stocks is a loser’s game. The reasons are that individual stocks have a higher risk, under perform on average and lower return with worse risk control. According to the White Coat Investor, “if you’re enjoying investing (researching, buying, selling, discussing etc), at least in the stock market, chances are good you’re spending a great deal of time and effort engaging in an activity that is actually decreasing your returns. Do yourself a favor and get a hobby that makes money, a free hobby, or at least one that costs you less than stock picking.”