October 4, 2021 • Newsletter
This Month’s Money Message: Invest
My grandmother had an ironing day each week; it was the day after laundry day, and she would spend some amount of time ironing the clothes that had been washed. There is something delightfully intentional about an ironing day, isn’t there? My grandmother had no expectation that clothes would emerge ready to wear; she had no concept of wrinkle-free garments. She accepted the clothing as it came, and she adjusted her tasks accordingly.
I have no desire to add an ironing day to my week. But I do very much appreciate the sentiment behind it. So this month, I give you full permission to embrace your own metaphorical wrinkles and meet yourself where you are, especially when it comes to investing.
You are not required to know everything about investing, regardless of your age. You are not required to lament earlier years when you weren’t able to invest. You are not required to master the nuances of investing in a single month. You are not a wrinkle-free shirt.
You can just start wherever you are, wrinkles and all.
If you have investments, take some time this month to look at what you are invested in. Odds are you may have mostly mutual funds, index funds, or ETFs, but you may also have some direct investments in stocks, bonds, or other vehicles.
Basically, you can create a list of your own investments. You want to capture (1) what you are invested in (2) what it is worth as of a certain date (September 30 may be a good date to choose).
Once you’ve got the list, you may want to do a bit more digging into the funds you have. Most investments have some sort of ticker symbol, and if you do some digging, you can usually learn more about the investment. It’s pretty obvious what you are invested in with direct investments – say a stock investment in in SolarEdge (SEDG). You’re invested in the company SolarEdge. You can learn about the company and decide if it makes sense for you.
It may be less obvious what you are really investing in for a mutual fund. For example, Schwab’s Fundamentals US Small Company Index Fund (SFSNX) has a position in SolarEdge (or it did as of September 24, 2021). But you may not know that without looking for it. And you might not know anything else about what a fundamentals small company fund includes.
Skim through your own list of what you’ve got, plus whatever research you find, and notice what you notice. You may be surprised by how much is familiar. You don’t have to know everything, but it helps to be curious so you can start to discover and ask questions.
When it comes to discovering mutual funds, I like to read the fund’s description, look at the expense ratio (lower is better), look at the historical performance (an upwards trend is generally good), and look at the fund’s top 10 holdings. That information tells me a lot about the type of companies the fund invests in, how much it costs, and whether I’m comfortable with the underlying companies. (This is also where you’ll spot any green washing going on with “socially responsible funds.”)
And honestly? That’s enough to get started. You can also look for something in your portfolio that doesn’t make sense: For example, too much invested in a single company, or an investment that is sitting in cash – especially if it is an IRA – that isn’t growing. And if you decide you need more help, it could be time to seek that help.
But you don’t have to decide that yet. You can just start where you are and start getting curious.
As you check in with your investments this month, here are some things to know, do, and believe:
Know: What to look for in an investment.
If you’re looking at mutual funds, read the description of the fund and skim through its top 10 holdings to get a sense of the fund.
Do: Create a list of your investments and gut-check for things you aren’t comfortable with, too much invested in one thing, and investments that are sitting in cash.
Depending on your own rhythm, this is something you can do quarterly or annually, but it is definitely not something to do every day. You have better things to do.
Believe: You don’t have to know it all right now. You can start by getting curious.
You might be pleasantly surprised by how much you do know and how much you learn quickly. Or not. That’s fine too.
What We’re Doing
October kicks off the year’s fall busy season for Elaine. She’ll be meeting with the Firelight Media fellows to talk about financial wellness, visiting Juilliard’s Kovner Fellows and the seniors at the Cleveland Institute of Arts, and hosting an entrepreneurial conversation with POWArts. Then towards the end of the month, Elaine begins a four-week financial course with Creative Capital awardees and alums.
What We’re Talking About
Year-end planning… That’s what is coming up with clients of late. They are thinking about where their income and expenses will end up in 2021 and starting to think about saving and retirement for the year.
CREATIVE COACHING (1 HOUR, $110)
If you’d like to chat with me to answer your own questions, feel free to find a time that works with your schedule. Fair warning: These slots are full (ish) for the next month or so.
Invest
I hope your investment check-ins go well this month. Remember, you are not a wrinkle-free shirt. You are not expected to emerge from any experience fully prepared and ready to go. You can take the time you need to get ready, even if that is an entire day devoted to ironing.
Until next month…
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