What a stock market correction is — and why traders are worried one is coming

Even as the U.S. stock market hovers near a record high, some people on Wall Street are warning that a market sell-off could be coming. It’s been more than a year since the U.S. stock market endured a correction, or decline of at least 10% from a prior high. Here’s what you need to know about a market correction and its effect on your portfolio. Once a market sell-off surpasses 20%, then it meets the criteria for a bear market . The U.S. stock market currently is in the midst of the longest-runn


Even as the U.S. stock market hovers near a record high, some people on Wall Street are warning that a market sell-off could be coming.
It’s been more than a year since the U.S. stock market endured a correction, or decline of at least 10% from a prior high.
Here’s what you need to know about a market correction and its effect on your portfolio.
Once a market sell-off surpasses 20%, then it meets the criteria for a bear market .
The U.S. stock market currently is in the midst of the longest-runn
What a stock market correction is — and why traders are worried one is coming Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-20  Authors: anna-louise jackson
Keywords: news, cnbc, companies, long, according, traders, coming, market, worried, stock, correction, markets, decline, thats, selloff


What a stock market correction is — and why traders are worried one is coming

Even as the U.S. stock market hovers near a record high, some people on Wall Street are warning that a market sell-off could be coming. It’s been more than a year since the U.S. stock market endured a correction, or decline of at least 10% from a prior high. And these types of market events typically happen a little more than once a year, on average, according to data going back to 1928 compiled by Yardeni Research. More than half of wealthy investors, for example, said in late 2019 that they expect a big market sell-off could happen this year, according to a UBS survey. Meanwhile, other people on Wall Street have pointed to similarities between the market today and in 2018 that could signal a possible correction ahead. Here’s what you need to know about a market correction and its effect on your portfolio.

What is a market correction?

Over the long run, the stock market trends higher. During shorter time periods, there can be wild fluctuations — but it’s important to put such moves in context. For a major benchmark like the S&P 500, it’s very normal to see daily swings in excess of 1%. In fact, that’s happened on about 27% of trading days in the last 20 years, according to FactSet data analyzed by Grow. When several declines of this magnitude happen in a string, or there’s an even more notable decline in a short period, that’s when you might start to see some of the following words thrown about to describe the movement of the markets. Here’s what they mean: Most experts define a correction as a market decline of at least 10% from a recent high, though people may also use it to refer to declines of smaller magnitudes (like 5%).

as a market decline of at least 10% from a recent high, though people may also use it to refer to declines of smaller magnitudes (like 5%). Once a market sell-off surpasses 20%, then it meets the criteria for a bear market .

. A market crash refers to a sudden and very sharp drop in stock prices. It may happen as part of a correction or bear market — and could reverse very quickly, depending on the reason for the crash.

Video by Courtney Stith

How long do corrections last?

There are two time periods to consider with a correction: The amount of time it took for the market to decline, and the amount of time it took the market to recover. Since World War II, the average correction for the S&P 500 has lasted four months, and it took another four months for the market to recover, according to analysis by CNBC and Goldman Sachs. And on average, this benchmark tumbled 13% before bottoming. In the past decade, investors endured only six corrections, and these declines have happened as quickly as a span of 13 days (in early 2018) to as long as 157 days (back in 2011), according to data compiled by Yardeni Research. And the subsequent recoveries have taken anywhere from 70 to about 200 days.

Bear markets are far less common, but they’re more severe in both how long they last and the extent of the losses. The average decline during the post-World War II bear markets has been 30% over a 13-month period, and it’s taken the market another 22 months to recover. By comparison, however, bull markets last years or even decades. The U.S. stock market currently is in the midst of the longest-running bull market in history, which began in 2009. And that’s why it’s important to remember that not only will the market bounce back from a sell-off, but will also continue its upward trajectory over the long run.

What happens during a market correction?

There’s always a trigger for a market decline, be it on a day-to-day basis or over more sustained periods, as happens during a correction. Because investors become cautious about the pace of economic growth and potential gains in stock prices ahead, they’re motivated to sell rather than to buy — and that sends the market lower. The most common reasons for a market correction include: Signs that the pace of economic growth is slowing

A shift in investors’ appetite to invest in risky assets (like stocks) versus those considered safer (like bonds)

Geopolitical events (like war or military attacks) that might spook investors

Fear During a correction, the value of your portfolio will drop, though it may be more or less than the broader market benchmarks. That’s because the makeup of your portfolio is likely different than the S&P 500, for example. So, even if the S&P 500 falls 10%, your portfolio may only go down 8%.

How to prepare for and survive a market correction


Company: cnbc, Activity: cnbc, Date: 2020-02-20  Authors: anna-louise jackson
Keywords: news, cnbc, companies, long, according, traders, coming, market, worried, stock, correction, markets, decline, thats, selloff


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Traders bet on another rate cut soon, and other news affecting your money in the week ahead

Here’s what to watch in the stock market during the week ahead — and how the news could affect your bottom line. Traders will be scouring these notes for signs that policymakers will cut rates again after doing so three times in 2019. Meanwhile, traders see a 47% likelihood that central bankers will reduce interest rates at least twice by the end of 2020. What it means for you: The Fed lowered interest rates last year in an effort to stimulate growth. At the same time, lower interest rates mean


Here’s what to watch in the stock market during the week ahead — and how the news could affect your bottom line.
Traders will be scouring these notes for signs that policymakers will cut rates again after doing so three times in 2019.
Meanwhile, traders see a 47% likelihood that central bankers will reduce interest rates at least twice by the end of 2020.
What it means for you: The Fed lowered interest rates last year in an effort to stimulate growth.
At the same time, lower interest rates mean
Traders bet on another rate cut soon, and other news affecting your money in the week ahead Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-15  Authors: anna-louise jackson
Keywords: news, cnbc, companies, soon, fed, money, rate, filing, cut, interest, week, affecting, wall, bet, ahead, market, rates, unemployment, traders


Traders bet on another rate cut soon, and other news affecting your money in the week ahead

The U.S. stock market is shattering records once again, with the S&P 500 setting new, all-time highs in the past week. And with the month half over, this benchmark is up 4.6%. That puts it on track for its best February since 2015. Some of Wall Street’s fears about the economic toll of the deadly coronavirus have tempered, and there are other reasons to be optimistic, too. Federal Reserve Chairman Jerome Powell on Tuesday testified in front of the House Financial Services Committee that the U.S. economy is “in a very good place,” and a monthly report showed consumer prices picked up in January. The Fed will be in focus in the week ahead because on Wednesday policymakers are scheduled to release the minutes from their January meeting. And traders are betting that the Fed will cut interest rates again by June, which marks a shift from as recently as a month ago, when they thought rates were likely to remain unchanged. In addition, people on Wall Street are monitoring the number of Americans filing for unemployment benefits, which has increased slightly this year. Here’s what to watch in the stock market during the week ahead — and how the news could affect your bottom line.

Traders bet the Fed will cut interest rates again

What’s happening: In two days of testimony, Fed Chair Powell assured Congress that the U.S. economy appears “resilient” to factors that could hurt global economic growth, though central bankers are closely monitoring the coronavirus. The minutes from the most recent Federal Reserve meeting, held in late January, are scheduled for release on Wednesday. Traders will be scouring these notes for signs that policymakers will cut rates again after doing so three times in 2019. In his testimony, Powell said Fed policy is well positioned currently. Why it matters: Traders are increasingly betting that the Fed will cut rates and see about a 45% probability of that happening by June, up from just 20% one month ago. Meanwhile, traders see a 47% likelihood that central bankers will reduce interest rates at least twice by the end of 2020. That’s at odds with the Fed’s current wait-and-see stance, and Powell’s recent comments about the economy. What it means for you: The Fed lowered interest rates last year in an effort to stimulate growth. That’s been a factor in making it cheaper for consumers and businesses to borrow money, like taking out a mortgage, and potentially saving borrowers thousands of dollars. At the same time, lower interest rates mean you earn less on your savings account.

More Americans filing for unemployment benefits

What’s happening: The number of Americans filing for unemployment benefits has been increasing slightly so far this year, particularly among those who have been receiving these benefits for a while. The weekly average this year, at nearly 1.74 million, is higher than both the comparable time period in 2019 and the full-year average. Economists currently project an increase in the number of new unemployment beneficiaries for the report scheduled to be released on Thursday. Why it matters: The labor market remains relatively strong, but people on Wall Street will be watching for a rise in jobless claims, both among those people filing for the first time and those who have been receiving those benefits for a while. However, U.S. employers announced more than 67,000 job cuts in January, which was the most in 11 months and a 106% increase from December, according to figures from Challenger, Gray & Christmas, an executive outplacement firm. What it means for you: Even if you’re working full time, it can be helpful to monitor job-related indicators because they give you a sense of how businesses are faring. Generally, labor market trends remain positive, and Wall Street is watching for any sign of a shift. Last week, for example, a report showed that optimism among small business owners jumped in January. It’s well above the long-term average — and in the top 10% of historical readings. Small businesses employ a large share of the population, so if these owners cut back on hiring or shed workers, that has a broader economic impact. More broadly, a recession doesn’t appear imminent, even in 2020, so you’re better off focusing on steps you can take now to safeguard your life before such a downturn occurs.

The bottom line


Company: cnbc, Activity: cnbc, Date: 2020-02-15  Authors: anna-louise jackson
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Nets star Spencer Dinwiddie: ‘Understand what fun you can have’ with your money

Dinwiddie spoke with Grow about the most valuable money lessons he’s learned, and his philosophies on spending, saving, and retirement. Savings mentality: ‘Understand what fun you can have’Dinwiddie started his NBA career in 2014 with the Detroit Pistons, signing a three-year contract worth $2.5 million. “I was like, ‘Nah, man, I’m not going to be one of these rookies that blows his money. “I had a very modest perspective and lifestyle in terms of what fun meant to me,” Dinwiddie recalls. Lesson


Dinwiddie spoke with Grow about the most valuable money lessons he’s learned, and his philosophies on spending, saving, and retirement.
Savings mentality: ‘Understand what fun you can have’Dinwiddie started his NBA career in 2014 with the Detroit Pistons, signing a three-year contract worth $2.5 million.
“I was like, ‘Nah, man, I’m not going to be one of these rookies that blows his money.
“I had a very modest perspective and lifestyle in terms of what fun meant to me,” Dinwiddie recalls.
Lesson
Nets star Spencer Dinwiddie: ‘Understand what fun you can have’ with your money Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-14  Authors: anna-louise jackson
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Nets star Spencer Dinwiddie: 'Understand what fun you can have' with your money

In his six years in the NBA, Brooklyn Nets point guard Spencer Dinwiddie has navigated career ups and downs that put his lifelong dream of making it as a professional basketball player in doubt. Thanks to a savings mentality that he adopted early on, along with a healthy dose of perseverance, Dinwiddie was able to make a comeback. Dinwiddie spoke with Grow about the most valuable money lessons he’s learned, and his philosophies on spending, saving, and retirement.

Savings mentality: ‘Understand what fun you can have’

Dinwiddie started his NBA career in 2014 with the Detroit Pistons, signing a three-year contract worth $2.5 million. During that time, he saved aggressively, amassing “several hundred thousands” within two years. “I had a fairly small budget compared to what I was earning,” Dinwiddie says. “I was like, ‘Nah, man, I’m not going to be one of these rookies that blows his money. I’m not going to do it. I cannot do it.'”

Video by Jason Armesto He was able to strike a balance, spending money on what mattered to him at the time (mostly video games), while being realistic about what he could afford, especially when it came to items that might not hold value. “I had a very modest perspective and lifestyle in terms of what fun meant to me,” Dinwiddie recalls. “I’m very big on do what is within your means, within your range. You should never be so constricted that you can’t have fun. You just have to understand what fun you can have.”

Biggest money lesson: ‘Always have an eye on it’

Dinwiddie grew up in the Los Angeles area, and writes on his website that “dedication to hard work” was instilled by his parents, Stephanie and Malcolm. Lessons about money also started at a young age for Dinwiddie, who’s now 26. “I got to give a lot of credit to my dad,” Dinwiddie says. “He’s a real estate agent, and so the concepts of entrepreneurship, money, real estate, sound investing, stuff like that — I was introduced to it pretty early.” In particular, Dinwiddie says the biggest lesson he learned is that it’s important to understand your own finances, including when money is coming in and going out.

I’m not going to be one of these rookies that blows his money. I’m not going to do it, I cannot do it. Spencer Dinwiddie Brooklyn Nets

“One of the things [my dad] never wanted me to do as a NBA player was to just pass my money off and never have an eye on it, or never have an idea of where it’s going or how it’s working,” Dinwiddie recalls. “Whatever it is that I chose to do, or even whatever my financial advisors chose to do or recommended me to do with the money, he wanted me to always have an eye on it and always have an understanding of not only what they were doing, but why.”

Saving for retirement: ‘Planning for those moments’


Company: cnbc, Activity: cnbc, Date: 2020-02-14  Authors: anna-louise jackson
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The US stock market has gotten less calm — and that’s actually good for you

On Tuesday, for the second day in a row, the S&P 500 did something it hadn’t done since early October. But the past 12 months have been unusually calm, with 1% moves happening on just 13% of trading days. In the entire year, the S&P 500 rose or fell in excess of 1% on just eight trading days. That’s because traders are trying to make sense of some big news and what it means for the pace of economic growth and stock prices ahead. More broadly, experts believe the pace of economic growth to slow t


On Tuesday, for the second day in a row, the S&P 500 did something it hadn’t done since early October.
But the past 12 months have been unusually calm, with 1% moves happening on just 13% of trading days.
In the entire year, the S&P 500 rose or fell in excess of 1% on just eight trading days.
That’s because traders are trying to make sense of some big news and what it means for the pace of economic growth and stock prices ahead.
More broadly, experts believe the pace of economic growth to slow t
The US stock market has gotten less calm — and that’s actually good for you Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-29  Authors: anna-louise jackson
Keywords: news, cnbc, companies, trading, 500, past, actually, gotten, growth, days, good, thats, market, economic, recent, stock, calm


The US stock market has gotten less calm — and that's actually good for you

On Tuesday, for the second day in a row, the S&P 500 did something it hadn’t done since early October. The benchmark moved more than 1% up or down. Daily swings in excess of 1% are pretty common for the U.S. stock market: They happened on about 27% of trading days in the past 20 years, according to FactSet data analyzed by Grow. But the past 12 months have been unusually calm, with 1% moves happening on just 13% of trading days. Before Monday — when the S&P 500 fell 1.6% amid fears the deadly coronavirus could hamper global economic growth — the benchmark had gone 71 days without a move of this magnitude. The benchmark then rose 1% on Tuesday, led by gains in the technology and financials sectors. “This is not unprecedented in the recent past, but it is surprising because it’s not typical,” says David Joy, chief market strategist at Ameriprise Financial. Joy points to 2017, which was especially tranquil. In the entire year, the S&P 500 rose or fell in excess of 1% on just eight trading days. After a period of calm, like the market’s experienced since October, even the slightest hint of turbulence can take investors by surprise. Still, experts say that 1% moves are normal and should even be embraced by long-term investors. Here’s why.

Moves up or down 1% often happen in clusters

Oftentimes, moves in excess of 1% are clustered. That’s because traders are trying to make sense of some big news and what it means for the pace of economic growth and stock prices ahead. During those periods, the market slumps one day, then rebounds the next. One recent example was in August 2019. In a six-day stretch, the market whipsawed up and down by at least 1% on a daily basis. The S&P 500 fell as much as 3.6% one day before rising as much as 1.8% a few days later. At the time, the bond market had flashed a warning sign about the U.S. economy, and there were concerns on Wall Street about a possible recession. Late 2008 was also especially turbulent, as the U.S. economy was in the midst of a recession and stocks were in a bear market (defined as a decline of at least 20% from the most recent high). In a three-month stretch, the S&P 500 swung at least 1% on about 85% of trading days — although it’s important to note that the market was up nearly as often as it was down.

Video by Courtney Stith

Prepare for more short-term bumpiness in 2020

Aside from ripple effects from news events like coronavirus, Joy expects that the market could remain relatively calm ahead. That’s because the pace of economic growth is “pretty steady” at about 2%, the job market is “relatively stable,” and the Federal Reserve has stated that they intend to stay on hold with interest rates indefinitely. Other market watchers, however, believe the 2020 U.S. presidential election could cause some short-term bumpiness. The Iowa caucus is in early February and, in the months ahead, traders will try to predict who will be the likely Democratic candidate to challenge President Donald Trump in November — and how the eventual nominee’s policies could impact specific industries and the broader economy. “Typically with presidential elections, the market really starts to focus on them a couple months beforehand,” Willie Delwiche, investment strategist at Baird, told Grow in November. More broadly, experts believe the pace of economic growth to slow this year, which will also result in more subdued gains for the stock market. After the S&P ended 2019 up 28%, Wall Street strategists surveyed by CNBC forecast that the index will finish 2020 almost 5% higher than its 2019 closing level, based on their median target.

Video by Courtney Stith

Market turbulence is good for long-term investors


Company: cnbc, Activity: cnbc, Date: 2020-01-29  Authors: anna-louise jackson
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Oil prices are down, earning season heats up, and more news affecting your money in the week ahead

Meanwhile, oil prices have been slumping. Here’s what to watch in the stock market during the week ahead — and how the news could affect your bottom line. And traders use oil prices as a barometer to predict a recession, since economic growth is associated with more demand for fuel. Even so, the decline in oil prices isn’t visible at the pump yet. What it means for you: A more sustained drop in oil prices could benefit drivers.


Meanwhile, oil prices have been slumping.
Here’s what to watch in the stock market during the week ahead — and how the news could affect your bottom line.
And traders use oil prices as a barometer to predict a recession, since economic growth is associated with more demand for fuel.
Even so, the decline in oil prices isn’t visible at the pump yet.
What it means for you: A more sustained drop in oil prices could benefit drivers.
Oil prices are down, earning season heats up, and more news affecting your money in the week ahead Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-25  Authors: anna-louise jackson
Keywords: news, cnbc, companies, stock, heats, prices, report, season, growth, economic, week, traders, quarter, ahead, oil, market, affecting, earnings, money, earning


Oil prices are down, earning season heats up, and more news affecting your money in the week ahead

The red-hot rally in the U.S. stock market has cooled off a bit, as the S&P 500 fell 1% for its biggest weekly decline since August. It’s only the second time this benchmark has fallen in the past nine weeks. Meanwhile, oil prices have been slumping. The price of U.S. West Texas Intermediate crude, one of the commodity’s primary benchmarks, has tumbled about 11% so far this year to the lowest level since October. The declines for both oil and stocks have been blamed on concerns about an economic slowdown in China related to the spread of a related to the deadly coronavirus. Earnings season will have a lot to do with whether the stock market can rebound to new highs again. In the week ahead, over 130 companies in the S&P 500 report results for the fourth quarter. In addition, the Federal Reserve convenes for its first meeting of the year, though traders don’t expect any change to interest rates at this time. And Wall Street will get its first glimpse of gross domestic product growth for the fourth quarter, along with reports on the housing industry and consumer confidence. Here’s what to watch in the stock market during the week ahead — and how the news could affect your bottom line.

Gas prices are falling

What’s happening: The decline in crude oil has been fueled by fears about how demand will be affected by the coronavirus outbreak. It comes after prices rose in December, partly boosted by optimism that a trade deal between the U.S. and China would encourage global economic growth and demand for oil. The commodity say its biggest one-day decline since July. Why it matters: Professionals on Wall Street closely monitor the change in oil prices because the commodity can have a broad economic impact. And traders use oil prices as a barometer to predict a recession, since economic growth is associated with more demand for fuel. Even so, the decline in oil prices isn’t visible at the pump yet. The average price of a gallon of gas nationwide is down less than 2 cents from a month ago. What it means for you: A more sustained drop in oil prices could benefit drivers. However, if prices are falling because traders are worried about the pace of global economic growth, that will also affect the stock market — and eventually your portfolio.

Earnings coming in better than analysts expected

What’s happening: The coming week will be the busiest of earnings season, or the period when publicly traded companies report results for the most recent quarter. More than 50 companies are scheduled to report on Thursday alone. This week’s earnings calendar includes big names like Apple, Visa, McDonald’s, Microsoft, and Caterpillar. Why it matters: Wall Street is bracing for reports that show profit growth slowed for the fourth straight quarter. That said, among companies that already have disclosed results, about 70% have beaten analyst expectations, FactSet data shows. Traders will also be keen to hear what executives forecast for upcoming quarters to see if they’re concerned that profit will slow even further. What it means for you: Expect some swings in the market in the weeks ahead as investors react to earnings reports. Certain individual stocks — Travelzoo, Netflix, and Skechers, for example — tend to be volatile, with average one-day changes in excess of 10% after they report earnings, according to data from Bespoke Investment Group.

The bottom line


Company: cnbc, Activity: cnbc, Date: 2020-01-25  Authors: anna-louise jackson
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How to manage risks when investing in the market

While a majority of investors are aware of the risks associated with investing, they may not be comfortable actually experiencing those risks. And while the stock market can experience dramatic moves up or down during short periods of time, historically, the market has always bounced back. Here’s how to best manage risks while you’re investing. “We find out what everybody’s risk tolerance is and make sure that their investments are lining up with their risk tolerance,” Kojonen explains. Rather t


While a majority of investors are aware of the risks associated with investing, they may not be comfortable actually experiencing those risks.
And while the stock market can experience dramatic moves up or down during short periods of time, historically, the market has always bounced back.
Here’s how to best manage risks while you’re investing.
“We find out what everybody’s risk tolerance is and make sure that their investments are lining up with their risk tolerance,” Kojonen explains.
Rather t
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Company: cnbc, Activity: cnbc, Date: 2020-01-24  Authors: anna-louise jackson
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How to manage risks when investing in the market

There’s no such thing as a sure bet with investing, but there are smart ways that you can grow your money — and as a bonus, they’re also often less risky. While a majority of investors are aware of the risks associated with investing, they may not be comfortable actually experiencing those risks. Two-thirds of investors say they know portfolio fluctuations of 10% are a normal occurrence — but even knowing that, 90% say it’s important to protect their investments when volatility occurs, according to the results of a 2019 survey by Natixis Investment Managers of more than 9,000 individual investors worldwide. Any time you invest, it’s possible the value of your portfolio will fall — or that your returns turn out to be less than you expected. Having time on your side is one of the best ways to mitigate risks, which is why it’s important to overcome fears and start investing as early as possible. And while the stock market can experience dramatic moves up or down during short periods of time, historically, the market has always bounced back. That’s one of the reasons why experts recommend you invest money in the stock market for the long term, rather than cash you might need in the next few years. Here’s how to best manage risks while you’re investing.

1. Only take on the risk you’re comfortable with

As the above survey illustrates, there’s often a mismatch between the level of risk that investors think they’re comfortable with and how much they can actually handle. Your tolerance for investment risk is individual and likely depends on your stage in life and when you need to use this money. To understand how your appetite for risk aligns with your current (or future) investments, start by taking a risk tolerance assessment, recommends Mike Kojonen, a financial advisor and founder of Principal Preservation Services. This is the first step for Kojonen’s prospective clients — and, once on board, he asks them to take the test again each year. “We find out what everybody’s risk tolerance is and make sure that their investments are lining up with their risk tolerance,” Kojonen explains. “And every year, we reevaluate because things change.”

Video by Courtney Stith Kojonen’s company has one such quiz for prospective clients, though you can also find other risk tolerance assessments for free online through sources like brokerage firms and colleges with financial planning departments. Common topics include: When you plan to sell investments

How long you intend to stay invested

What you would do with your investments in the event of a major market decline

How comfortable you are with fluctuations in asset prices

How you expect your income to change in the future

2. Diversify and use asset allocation to reduce risk

The goal of completing these types of questionnaires is to determine how to invest your portfolio to best align with your risk tolerance, investing objectives, time horizon, and individual financial situation. In turn, your risk tolerance affects your asset allocation, or the amount of your portfolio that’s invested in stocks versus bonds, generally speaking. Rather than trying to pick winners in the stock market, a proven strategy for success is to invest in the market itself. That’s why so many experts recommend investing in index funds, because they’re a low-cost way to quickly achieve diversification. When determining your asset allocation, the goal is to have a variety of investments to balance out potential risks of any individual one — what’s known as diversification. In addition to the results of your risk assessment, consider these goals from the Baltimore-based money managers at T. Rowe Price: 20s and 30s: 90% to 100% in stocks (because of your long investment timeline), with up to 10% remaining in bonds.

90% to 100% in stocks (because of your long investment timeline), with up to 10% remaining in bonds. 40s: 80% to 100% in stocks, with up to 20% remaining in bonds.

80% to 100% in stocks, with up to 20% remaining in bonds. 50s: 60% to 80% in stocks, 20% to 30% in bonds, and up to 10% in cash.

60% to 80% in stocks, 20% to 30% in bonds, and up to 10% in cash. 60s: 50% to 65% in stocks, 25% to 35% in bonds, and 5% to 15% in cash. You’ll need to make sure there’s diversification within these asset classes, as well, says Greg Hammer, the CEO and president of Hammer Financial Group. Index funds can easily achieve this, but if you own other types of funds, watch for overlap in the holdings or to make sure your portfolio isn’t skewed to specific industries, he adds. And if you own individual stocks, such as shares of the company you work for, that also increases your portfolio’s overall risk, Hammer says. “Understand that a single company’s stock is about the highest risk level you can carry.” Finally, pay attention to your asset allocation as you get older, and rebalance your portfolio as necessary every year or so.

Video by Jason Armesto

3. Be consistent


Company: cnbc, Activity: cnbc, Date: 2020-01-24  Authors: anna-louise jackson
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3 questions to ask yourself before selling an investment

Before you sell an investment, experts recommend asking yourself thee following questions. Your reasons for wanting to sell an investment could range from practical to emotional, and it’s important to understand what’s motivating your decision. That said, you will want to have a plan for which investments in your portfolio you’ll sell — and why. Before you consider selling, you’ll want to make sure you understand the associated costs, which could include: Transaction costs. Even if you decide th


Before you sell an investment, experts recommend asking yourself thee following questions.
Your reasons for wanting to sell an investment could range from practical to emotional, and it’s important to understand what’s motivating your decision.
That said, you will want to have a plan for which investments in your portfolio you’ll sell — and why.
Before you consider selling, you’ll want to make sure you understand the associated costs, which could include: Transaction costs.
Even if you decide th
3 questions to ask yourself before selling an investment Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-16  Authors: anna-louise jackson
Keywords: news, cnbc, companies, understand, tax, investment, ask, market, selling, investments, questions, sell, money, youll, plan


3 questions to ask yourself before selling an investment

Much of the advice about investing focuses on getting started in the stock market. However, the day will inevitably come when you need to sell your investments. Just as you should have a long-term strategy for investing in the stock market, you’ll need to develop a plan for determining when to sell — and then stick with it. Otherwise, you risk succumbing to a common cognitive bias of withdrawing money from the market at the worst possible time. “If you’re prepared in advance, nothing should be a surprise,” says Tim McGrath, a certified financial planner and managing partner at Riverpoint Wealth Management. “A lot of people don’t have a game plan or process for determining what to sell.” It’s important to consider the long-term consequences associated with a short-term decision. If you sell investments because of a bout of turbulence, you could miss out when the market eventually rebounds, as it always has in the past. Alternatively, treating your investment account like an ATM could create an unexpected tax burden. Before you sell an investment, experts recommend asking yourself thee following questions.

1. Why do you want to sell?

Your reasons for wanting to sell an investment could range from practical to emotional, and it’s important to understand what’s motivating your decision. A good way of sussing that out is by asking yourself if selling the investment will fund a want or a need, says Mike Kojonen, a financial advisor and founder of Principal Preservation Services. “Don’t use your investments for something you just want to buy,” he recommends. That’s because you’ll pay a price for doing so, including capital gains taxes on profits. Oftentimes, Kojonen’s clients will reconsider selling investments once they understand the implications of doing so — and particularly if it was to fund a short-term “want,” like a car or a vacation, he says. To avoid surprises that might cause you to sell an investment to cover an emergency, McGrath says it’s important to plan ahead. That means anticipating major expenses you might have in the next 12 to 24 months and ensuring you have an emergency fund that can cover at least three months worth of living expenses.

If you’re prepared in advance, nothing should be a surprise. Tim McGrath a certified financial planner and managing partner at Riverpoint Wealth Management

Even so, emergencies do arise that might warrant selling. That said, you will want to have a plan for which investments in your portfolio you’ll sell — and why. Finally, check your emotions. Both Kojonen and McGrath try to determine if the real reason one of their clients wants to sell is motivated by fear. If you’re frustrated with your portfolio’s performance or worried that a market decline is coming, remember why you invested in the first place and make tweaks rather than overhauls to your strategy.

Video by Courtney Stith

2. Do you understand what selling will cost?

You may look at the value of your investment and think you’ll get to keep all of that. But Uncle Sam will want a cut, as well. Before you consider selling, you’ll want to make sure you understand the associated costs, which could include: Transaction costs. Does your broker or robo-advisor charge a fee for liquidating some or all of your account?

Does your broker or robo-advisor charge a fee for liquidating some or all of your account? Capital gains taxes. How long have you owned this investment? If it’s been less than a year, you’ll have to pay short-term capital gains taxes on the profit, which is the equivalent of ordinary income tax. If it’s been longer than a year, your tax obligations are lower.

How long have you owned this investment? If it’s been less than a year, you’ll have to pay short-term capital gains taxes on the profit, which is the equivalent of ordinary income tax. If it’s been longer than a year, your tax obligations are lower. Penalty for early withdrawals. Are you considering taking out money from a 401(k) or an IRA? You should avoid dipping into your retirement account, because that money can be taxed as income. And if the money isn’t for a qualified exception, you’ll have to pay a 10% penalty.

Are you considering taking out money from a 401(k) or an IRA? You should avoid dipping into your retirement account, because that money can be taxed as income. And if the money isn’t for a qualified exception, you’ll have to pay a 10% penalty. Opportunity cost. Every dollar you remove from the market is a dollar less that’s earning interest for retirement or other long-term goals. To see the power of compounding, consider the following example from Fidelity: If you leave a retirement account of $6,000 untouched instead of cashing out when you switch jobs, in 35 years that could grow to more than $64,000 — even without any other contributions in the interim. Once you understand all of these costs, you may have a change of heart. That said, there are good reasons to sell investments, including rebalancing your portfolio to maintain your chosen mix of various stocks and bonds and taking advantage of investing strategies that can lower your tax bill.

3. What happens next?

Even if you decide that selling an investment is your best option, you need to have a plan for what happens next. That includes a strategy for when you’ll actually sell, a budget for the costs outlined above, a decision about where that money goes after you’ve liquidated it, and a plan for reinvesting that money again later.


Company: cnbc, Activity: cnbc, Date: 2020-01-16  Authors: anna-louise jackson
Keywords: news, cnbc, companies, understand, tax, investment, ask, market, selling, investments, questions, sell, money, youll, plan


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Markets hit records as confidence rises and other news affecting your money in the week ahead

Here’s what to watch in the stock market during the week ahead — and how the news could affect your bottom line. Economists expect confidence is risingWhat’s happening: There’s been an interesting divergence in sentiment recently: While CEO confidence in the economy has cratered, consumers still feel optimistic. This week, traders will get to see if this gap in sentiment has continued to widen. That’s followed on Friday by a closely watched survey from the University of Michigan, which measures


Here’s what to watch in the stock market during the week ahead — and how the news could affect your bottom line.
Economists expect confidence is risingWhat’s happening: There’s been an interesting divergence in sentiment recently: While CEO confidence in the economy has cratered, consumers still feel optimistic.
This week, traders will get to see if this gap in sentiment has continued to widen.
That’s followed on Friday by a closely watched survey from the University of Michigan, which measures
Markets hit records as confidence rises and other news affecting your money in the week ahead Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-11  Authors: anna-louise jackson
Keywords: news, cnbc, companies, hit, economy, records, rises, confidence, consumers, traders, market, economists, week, affecting, prices, inflation, markets, ahead, stock, money


Markets hit records as confidence rises and other news affecting your money in the week ahead

A majority of Americans believe the U.S. is less safe in the wake of attacks between the U.S. and Iran, but you wouldn’t know it from looking at the performance of the stock market. While tensions between the two countries appear to have cooled, a USA Today/Ipsos poll shows that 55% of Americans say the U.S is less safe after the killing of Iranian Gen. Qasem Soleimani. Still, the major stock benchmarks have set fresh highs in the past week. Already this month, the S&P 500 is up more than 1.6%, building upon a rally of nearly 29% for this index in 2019. And the two major themes in market outlook for January are on the calendar in the week ahead: a phase one trade deal between the U.S. and China, which is expected January 15 or shortly thereafter, and the start of earnings season. In addition to a report on retail sales in December, which includes the all-important holiday shopping season, traders will monitor two key surveys of confidence — one measuring sentiment among U.S. consumers and the other of small business owners — and two reports on inflation for the month of December. Here’s what to watch in the stock market during the week ahead — and how the news could affect your bottom line.

Economists expect confidence is rising

What’s happening: There’s been an interesting divergence in sentiment recently: While CEO confidence in the economy has cratered, consumers still feel optimistic. This week, traders will get to see if this gap in sentiment has continued to widen. First up is a monthly report that measures confidence among small business owners, which is scheduled for release on Tuesday by the National Federation of Independent Business. That’s followed on Friday by a closely watched survey from the University of Michigan, which measures confidence among consumers. Economists currently project that this measure increased for January. Why it matters: Traders and economists watch surveys like these closely because when consumers or company leaders feel less confident, they may pull back on spending on big-ticket items or hiring decisions — and that ultimately affects the pace of gross domestic product (GDP) growth. Businesses with fewer than 500 workers account for almost half of private sector employment, while consumer spending accounts for more than two-thirds of GDP. What it means for you: Confidence is just one piece of a broader puzzle that economists piece together to get a sense of how the economy is faring. The gains in the stock market, even in the wake of the U.S.-Iran tensions, shows that traders have brushed off these concerns. However, if consumers and business owners are less confident about the future, that could have an impact on the broader economy and the stock market. Recent reports showed that U.S. employers added fewer workers in December than economists had projected, while the number of unemployed surged to a more than 1½-year high.

If consumers and business owners are less confident about the future, that could have an impact on the broader economy and the stock market.

Inflation picked up in December

What’s happening: Two inflation reports are scheduled for release in the week ahead. Tuesday’s measures the average change in consumer prices, or what you pay for various goods and services, including food and housing. Wednesday’s report focuses on producers and the average change in prices these companies set for the products they sell. Economists currently project that consumer prices jumped the most since October 2018 on a year-over-year basis, while producer prices increased the most since September. Why it matters: The Federal Reserve is tasked with keeping prices in check and closely tracks changes in prices for goods and services. They monitor a measure that excludes food and energy, which tend to have more wild price swings. Even so, the Fed tracks a different measure of inflation — the core personal consumption (PCE) price index — for its long-term target of 2%, and that’s still below that level at 1.6% as of November. Policymakers cut interest rates in 2019, citing inflation as a factor, but prices have yet to pick up materially. What it means for you: When prices go up, our dollars don’t stretch as far when we’re buying groceries or paying for services. The Fed closely monitors changes in the cost of living to decide whether further rate cuts are warranted. While policymakers intend to keep their policy on hold unless the outlook for the economy changes, some experts believe rising commodity prices could create an “inflation scare” that might warrant the Fed to hike rates again. Traders don’t see a greater than 20% chance of any rate change, either a cut or a hike, until at least June.

The bottom line


Company: cnbc, Activity: cnbc, Date: 2020-01-11  Authors: anna-louise jackson
Keywords: news, cnbc, companies, hit, economy, records, rises, confidence, consumers, traders, market, economists, week, affecting, prices, inflation, markets, ahead, stock, money


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The slowest fire season in years taught this wildland firefighter to create a financial backup plan

The 25-year-old Montanan was preparing for his second season as a wildland firefighter when Grow talked to him this past summer. Read more: What it’s really like to make a living as a wildland firefighter in Montana This season proved more challenging, prompting Linear to pick up other lines of work to supplement his income and create a plan for financial security. By mid-September, it had become clear: “There just wasn’t any work for us, even outside of the fires.” Donovan “Donny” Linear Wildla


The 25-year-old Montanan was preparing for his second season as a wildland firefighter when Grow talked to him this past summer.
Read more: What it’s really like to make a living as a wildland firefighter in Montana This season proved more challenging, prompting Linear to pick up other lines of work to supplement his income and create a plan for financial security.
By mid-September, it had become clear: “There just wasn’t any work for us, even outside of the fires.”
Donovan “Donny” Linear Wildla
The slowest fire season in years taught this wildland firefighter to create a financial backup plan Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-01  Authors: anna-louise jackson
Keywords: news, cnbc, companies, work, season, 2019, fires, create, 2018, slowest, plan, job, taught, wasnt, linears, wildland, backup, firefighter, linear, financial


The slowest fire season in years taught this wildland firefighter to create a financial backup plan

Much of the Western part of the U.S. got a reprieve this year from a milder than average fire season — and no one knows this as well as Donovan “Donny” Linear. The 25-year-old Montanan was preparing for his second season as a wildland firefighter when Grow talked to him this past summer. In 2018, his first year in this seasonal line of work, Linear had fought wildfires in six U.S. states and made more money in the stretch from June to November than he’d ever earned in a full year of work. Read more: What it’s really like to make a living as a wildland firefighter in Montana This season proved more challenging, prompting Linear to pick up other lines of work to supplement his income and create a plan for financial security. Here’s how Linear navigated a year of uncertainty, and his plans for the future.

‘There just wasn’t any work for us’

Firefighters must be comfortable with uncertainty. The nature of the work is that they don’t know where the next fire will take them or how long it will take to fight it. But this year, another unpredictable factor tested Linear: How much fire activity there will be in a season — or how little, as was the case in 2019. Linear’s crew was first called out for a fire in July, more than a month later than their first call in 2018. Their second call of 2019 was in early September. More than 49,000 reported fires burned 4.6 million acres in the U.S. through late-December, compared to a 10-year average of 64,000 fires and 6.9 million acres, according to data from the National Interagency Fire Center. The acreage that burned in 2019 was the least since 2014, and about half the amount in 2017 and 2018. Linear and the other 19 members of a Missoula, Montana-based initial attack handcrew are employed by a private contractor. While these crews work alongside those employed by government agencies, since they contract with federal and state agencies for work, they may not be the first crews to be called. By mid-September, it had become clear: “There just wasn’t any work for us, even outside of the fires.” “Here I am sitting around waiting for a fire call and that kind of set me behind with bills and stuff like that, so I ended up having to get a regular job in order to get by,” he says. Instead of fighting fires, which requires hiking several miles a day with a 60-pound pack on his back, Linear’s new job was working as a cashier at a local grocery store.

There just wasn’t any work for us, even outside of the fires. Donovan “Donny” Linear Wildland firefighter

‘Short and bitter’ fire season

While Linear’s rookie season as a wildland firefighter kept him on the job for weeks at a stretch, 2019 was the complete opposite experience. When he turned in his firefighting gear sometime in October, he’d only worked a total of 21 days. “It was short and bitter,” Linear says of this season. Fire is vital to forest regrowth because it can clear out underbrush and dead trees. “A lot of people just aren’t really knowledgeable in the sense that Mother Nature also needs fire, it’s part of the natural ecosystem.” Linear is grateful that there were fewer destructive fires in 2019, burning homes or killing people. “I heard plenty of people saying they were thankful there wasn’t smoke,” he says. But the mild fire season was tough for people like Linear who depend on it for their livelihood. Linear says if he were to compare his 2019 earnings with what he made in 2018, “it’s like night and day.”

Courtesy Donovan Linear

Linear’s crew was called out for a third fire, which turned out to be a 16-day job in Colorado. But by that time he already was working elsewhere, so he had to turn down the opportunity. All that downtime proved inspirational for Linear, however. He completed online training through the International Sports Sciences Association to become a certified fitness trainer, and began working as a personal trainer.

A financial plan for 2020 and beyond

The slower-than-average fire activity this year didn’t affect Linear’s love for fighting wildland fires, but he will take a different approach with this seasonal job in the future. “I’m definitely planning on coming back, but I know now that if the year’s starting to look like it was this past year, what I can do differently,” he says. “Once those months are rolling around where the fires really start to get to popping, if it looks like it’s not going to be a good season, I’ll probably just work a regular job or invest more time into my personal training business.” This spring, the 2020 fire season will begin anew. Linear will need to attend a refresher training course and pass a physical fitness test again: walking three miles within 45 minutes while wearing a 45-pound vest. And he still has dreams of becoming a hotshot, the most elite group of wildland firefighters who generally work closest to the blaze, and joining a government crew in the future. Doing so would provide more security, by earning him a salary even during slow fire seasons and receiving benefits like health insurance, Linear says.


Company: cnbc, Activity: cnbc, Date: 2020-01-01  Authors: anna-louise jackson
Keywords: news, cnbc, companies, work, season, 2019, fires, create, 2018, slowest, plan, job, taught, wasnt, linears, wildland, backup, firefighter, linear, financial


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