The Women's Guide to Successful Investing : Achieving Financial Security and Realizing Your Goals

It is no secret that women are increasingly controlling wealth. Estimates suggest that women control more than 50% of all wealth and growing. Importantly, 95% of women will be their family's primary financial decision maker at some point in their lives. Yet recent studies show that Millennial women are deferring financial and investing decisions at a greater pace than Baby Boomer women. Targeted to all women "with a clear recognition that though the objectives and needs of this vast segment may not necessarily be homogeneous, women share common challenges when it comes to investing, this book provides clear instruction and a series of Intelligent Investing Rules for women to live by, especially in these times with sticky and persistent inflation and rising interest rates. The Women's Guide to Successful Investing demonstrates how women can develop the knowledge and skills required to accumulate wealth and build an investment portfolio for the long term. Providing proven wealth accumulation strategies, tailored advice, and a comprehensive market analysis, this second edition is a must-read for female investors who want to master volatile markets with long-term success. Written by a female CEO, CIO, and investment manager whose career has spanned 38 years, the book offers a much-needed blueprint for investments for women. Preface to the Second Edition 5 Preface 7 It’s Time to Raise Our Investing IQ 7 Acknowledgments 10 Contents 12 List of Figures 14 List of Tables 15 1 Wealth Accumulation is an Attitude: Investing for Your Future Requires a Few Goals and Much Less Capital Than You Think 16 Cultivate the Habit of Saving 17 Saving, Even a Little Matters 18 By the Way, Women Control Trillions of Dollars 19 #59.0–A Case Study of, Well, Me 21 P.S. Post- or Pre-Spouse don’t Let Your Financial Future Become a Post-Script 22 COVID-19 Likely Made the Longevity Numbers Even More Compelling for Women 23 2 Saving to Invest is the Best Strategy 24 Spending is the Anti-Saving 24 Saving to Invest is the Wisest Strategy 25 Establishing an Investment Discipline that Meets Your Risk Tolerance is Critical 28 Real-Life Case Study: You don’t Have to Make a Lot of Money to, Well, Make a Lot of Money. Meet Ronald Read 28 An Example of Staying the Course 29 When Starbucks Got Roasted, I Bought the Stock 30 Mr. Softy Provides Another Great Example of Buying Quality on Sale 32 Don’t Be Deterred by Your Age or Perceived Lack of “Enough Money.” 33 3 Covid-19 Hit Women’s Finances Much Harder Than Men’s: Women Left the Workforce En masse—At What Cost? 35 One Million Women are Still Missing From the Labor Force Compared to February of 2020 35 Female-Owned 401(K) Balances Took It on the Chin 36 Repetition is the Mother of Learning. (See What I Did There?) 37 In Order to Get There, We Need to Know Where We are Going; Establishing Financial Goals Informs Successful Savings and Investment Plans Meet Mental Accounting 39 When It Comes to Retirement Planning Be Intentional 40 The Right Asset Allocation is Important to Meeting Our Financial Goals 42 Are Target-Date Funds for You? 45 A Quick Word About Dollar-Cost Averaging While We Are Discussing Retirement Assets 46 COVID-19 May Have Slowed Down Achievement of Life Goals but with Intention the Only Way to Avoid “Losing” is to Ensure We Are Intelligently in the Game 47 4 It’s True! Women Make Better Investors Than Men (Sorry Guys). Women Inherently Display the Traits Required for Successful Investing 49 Women Are not Plagued by the Overconfidence Men Exhibit, Which is Why They Outperform Men 50 A Successful Investment Discipline Requires Understanding How Markets Work and How We Respond to Market Forces 53 Behavioral Economics Explores How Our Biases Are Compounded by Random or Unreliable Data 54 Behavioral Economics also Studies the Effect of the Recency of a Risky Event on Subsequent Financial Behavior 55 Time in the Market vs. Timing the Market is the Best Strategy 57 Viewing the Markets Over the Long-Term Provides Much Better Information Than the Most Recent Event 57 In the Face of Uncertain Markets, It is Prudent to Be Aware of Our Biases When We Hone Our Approach to Investing; Adding a Little Discipline won’t Hurt 59 Learning to Leverage Our Natural and Acquired Expertise is a Good Place to Start 60 5 Developing an Intelligent Investing Strategy All Your Own: Like Any Discipline, Sound Investing Can Become Muscle Memory for the Diligent Student and Practitioner 61 Growth and Value Investors Have Distinct Personality Biases 61 An Encouraging Word for Women About Understanding and Selecting an Investment Style 63 What the Research Tells Us About Value Versus Growth Stock Investment Performance 64 A Quick Recap 65 A Short Detour: Why Do I Need to Read This Book If I Am Working with a Financial Advisor 66 Growth Investors Often Are on the Lookout for the Next Breakthrough Product or Technology Company 68 If Earnings in Growth Stocks Are Absent, Look to the Price-To-Sales Ratio for Valuation Information 70 A Warning for Busy Women 72 Value Investors Believe that Eventually Good Things Happen to Bad Stocks of Great Companies 73 Why Dividends Matter to Value Investors as a Valuation Tool 75 How Dividends Contribute to Total Return 77 The Dogs of the Dow 79 A Warning for Value Investors 81 Growth Versus Value Investing—A Summary 82 6 Developing an Investment Discipline That Will Achieve Our Goals—Continued: The Stock Market is a Tug of War Between Fear and Greed; Arm Yourself with the Tools to Succeed 83 Real-Life Case Studies—Two Wealthy Clients Who Taught Me a Great Deal About Investing 84 A Few Words About Methods: How and When to Use the Price-To-Earnings Ratio as a Measure of Value 86 Think of the P/e as the Price-Per-Square-Foot Equivalent Metric 87 For the Truly Ambitious: The Price/earnings-To-Growth Ratio or PEG 89 How Do I Know a Fallen Angel Growth Stock When I See One? 89 A Warning for GARP Investors When It Comes to Fallen Angels 92 Whatever We Call It, Successful Investors Buy Great Companies that for the Most Part Will Continue to Produce Solid Long-Term Performance 94 7 Construct Your Portfolio Like a Dinner Party Invitation List: Holdings Should Be Balanced and Behave Well If Things Get Out of Hand 95 A Real-Life Portfolio Left to Its Own Devices 97 Diversification, It Would Seem, is in the Eye of the Beholder 99 Guidelines for Constructing a Portfolio of US stocks 100 Portfolio Construction to Meet Our Financial Goals Depends a Good Deal on Our Time Horizon 102 Real-Life Case study—A Savvy Investor Who Had a Much Higher Risk Profile Than Her Husband 103 Meet Your Research Team: A Smartphone and Sirius XM Radio Account—Accessible and Timely Financial Information for Busy Women 104 Financial Data is Plentiful at No Cost to the Individual Investor 105 An Easy to Navigate, Free Portfolio Management Tool 105 The Always On, Ever-Ready Financial News Media 107 8 Apple, Inc.—A Case Study in How to Select a Core Holding: A Role Model Investment You Will Want to Emulate 109 Implementing Our Investment Strategy in Real Time; A Brief Primer of Apple, Inc. 111 The Question to Ask: Is Apple Cheap for Good Reason? 112 Valuation Reveals a Great Deal About Investor Expectations, an Opportunity for Savvy Investors 115 INSET: Is Apple Sauced? 116 Get to Know the Competition 118 Lowered Expectations and Prodigal Companies 119 A Real-Life Case Study: Meet an Apple Super Investor—How Much is Too Much? 120 9 Mutual Funds Are So 1990, How to Use Exchange-Traded Funds to Round Out Your Portfolio Holdings. To Crypto or Not to Crypto and What the Heck are Meme Stocks? 122 Exchange-Traded Funds (ETFs), the Antidote for Women Who Do Not Have the Time Nor the Interest to Buy Individual Stocks 123 ETF Pricing is Easy to Access, Which Makes the Funds Easy to Trade 126 ETFs are Tax Efficient 126 ETFs Increase Your Ability to Diversify Your Portfolio. An Added Benefit? Investors are Less Likely to Fall in Love with an ETF than a Stock 127 INSET: What are Actively Managed ETFs? 128 A Warning About ETFs 128 Asset Allocation Suggestion for an ETF-Only Portfolio 128 Asset Allocation Suggestions When You Are Employing Stocks and ETFs 130 A Word About Tax Strategy 130 Memes Are to Culture What Genes Are to Life Says Richard Dawkins. But Are Meme Stocks a Good Investment? 133 INSET: Excerpts from My USA Today Column 135 The Crypto Conundrum 136 10 A Case Study of a Fallen Consumer Discretionary, Tech, E-Commerce Company: Amazon and Stocks to Own for a Lifetime 138 Amazon, Has the Smile Turned Upside Down? 139 INSET: A Case Study of a Stalled Luxury Brand—Coach, Inc. (Now Tapestry) 142 Real-Life Investing Lab. Stocks to Own for a Lifetime 143 Finding Stocks to Own for a Lifetime is No Mystery; It Simply Takes a Willingness to Dig a Little and Learn a Lot 146 Not Every Stock in Your Portfolio Has to Work Over Every Time Period 146 11 Five Critical Lessons and Warnings: Don’t Touch a Hot Stove, Don’t Talk to Strangers, and Other Lessons for the Ages 148 If You Are Depending on the Dividend for Income and Valuation Information, Make Sure it’s not Too Hot nor Too Cold, but just Right 148 Don’t Talk to Strangers; Taking Stock Tips from People Whose Investing Prowess is Unknown to You is like Gambling 150 Absolutely Do not, Ever, Chase Stocks You Think You Should Have Bought and didn’t 151 Stick with Your Discipline—Remember that Wall Street is Terrible at Turning Points 154 Don’t Touch a Hot Stove but don’t Get Scared Out of Stocks Either 155 12 Twelve Intelligent Investing rules—And One More for Good Measure: Rules for Women to Invest by 157 Appendix 1: 12 Fundamental Factors I Find Useful 161 Appendix 2: Investment Websites 162 Glossary of Investment Terms: Mastering the Language Will Provide You with Confidence and Will Broaden Your Knowledge Base 163 Index 176