RISE & Shine!

It’s Another Great Day To Learn About Investing

In today's ever-changing financial landscape, it's crucial for women to take control of their financial futures. Investing can be a powerful tool for building wealth, but we understand that starting out can feel overwhelming, especially for those new to the world of finance.

Today, we are diving into the basics of an investment option that is great for someone just getting started in investing: Index Funds.

What is an Index Fund?

Investing in Index funds is an investment strategy with the goal of mirroring the performance of a specific market index, such as the S&P 500.

This makes index funds an attractive option, since they let you participate in market gains without paying any advisory fees. It’s good to note that each major exchange, such as Fidelity of Vanguard, does list a variety of index funds to choose from.

Imagine a buffet with a wide array of food options. Each dish represents a different company or security in the market. By investing in an index fund, you get a plate that contains a little bit of everything, giving you exposure to a diversified mix of investments. With one investment, you get a taste of the overall market.

Index Funds are a great option for new investors!

Investing in Index Funds allows you to start today, regardless of the size of your savings.

Since a majority of investing advisors do not outperform the stock market, you can make your first investment on your own without having to pay extra fees to a professional investor.

Choosing Your Investment Approach

Do-It-Yourself (DIY): A DIY approach to investing in index funds can be a cost-effective and straightforward option for women who are new to investing. Decide if you want to work with a brokerage, like Fidelity, Vanguard, or a robo-advisor, like Betterment. From there you can set up an account, do research on fund options, and begin investing! This is a cost effective method to get started in investing.

With Some Help: Not ready to manage your own investments? No worries - working with a financial advisor or wealth manager is another option for investing in index funds. With your advisor you will discuss investment goals and assess your financial situation, risk tolerance, and timeline to create a personalized investment plan. For a fee, the advisor will continuously monitor and adjust your portfolio, while keeping you informed about your investments.

Keep in mind: most investment professionals do not beat the stock market.

Target Date Funds: Target date funds are another option which caters to investors planning for retirement by providing an investment solution that shifts from higher-risk to lower-risk assets based on your retirement date. Target date funds are like putting your investments on auto-pilot. If you don’t want to select individual index funds yourself, this is the method for you. By avoiding the fees associated with hiring a wealth manager, this approach minimizes the risk of underperforming the market.

SUPERWOMAN SPOTLIGHT

Muriel "Mickey" Siebert, often known as "the first woman of finance", made history by being the first woman to purchase a seat on the New York Stock Exchange in 1967.

Not only did Mickey have to change her name on her resume but she also faced nine rejections from men in the Stock Exchange before finally finding a sponsor for her seat. It comes as no surprise that it would take another decade for another woman to follow in her footsteps.

Mickey was a bold and vocal supporter of women in finance, stating, "there were no female role models, so I just blazed my own path."

FINANCE IN THE NEWS

Stock Markets Jump, But So Do Interest Rates

The S&P 500 concluded July with its fifth consecutive month of growth. However, this consistent upward trend has prompted some investors to brace for a potential downturn. Bloomberg reports that, historically, August and September have been the least productive months for the S&P 500 over the last thirty years, lending credibility to these investor concerns.

Also making big jumps in July, interest rates saw a substantial increase last month, hitting the highest level in 22 years. Jerome Powell, the Federal Reserve Chairman, has indicated that more rate hikes might be on the horizon before the year's end.

Are You Ready For Retirement?

A new survey by the Transamerica Center for Retirement Studies found that a majority of Americans have no idea how much money they need to have saved for retirement. The majority of respondents estimated a need for $500,000, despite estimates suggesting a comfortable retirement requires closer to $1.27 million. These figures are estimates, but how much money do most Americans actually have saved for retirement? The answer is $89,000, just 7% of the target numbers. This data is even more concerning considering the uncertain future of social security.

Need help calculating how much you will need to have saved for retirement? Check out the R.I.S.E. Retirement Calculator now!

Next Week’s Sneak Peek:

Now that you have learned what an Index Fund is and the investing options are available to you, next week we will be covering the first steps you can take to begin investing in Index Funds!

Glossary:

Active management: Active management refers to a strategy used by investment professionals who actively buy and sell securities in an attempt to outperform the overall market and achieve higher returns.

Mutual fund: A mutual fund is an investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. It is managed by professional fund managers who make investment decisions on behalf of the investors.

Exchange-traded fund (ETF): An exchange-traded fund is a type of investment fund that is traded on stock exchanges, similar to individual stocks. ETFs typically aim to track the performance of a specific market index, such as the S&P 500, and provide investors with easy access to a diversified portfolio of assets.

Market index: A market index is a measure of the performance of a specific group of stocks or securities that represents a particular market or sector. Examples include the Dow Jones Industrial Average (DJIA) or the Nasdaq Composite Index.

Market fluctuations: Market fluctuations refer to the ups and downs in the prices of stocks, bonds, commodities, or other financial instruments in response to various factors such as economic conditions, investor sentiment, and market events.

Risk profile: A risk profile is an evaluation of an individual's or an investment's tolerance for and exposure to risk.

Rebalancing: Rebalancing is the process of adjusting the allocation of assets in an investment portfolio to maintain the desired risk and return characteristics.

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Regardless of whether you are scared to take the first step or you are ready to dive right in, there's an Investment strategy perfectly suited for you.

At R.I.S.E we are committed to guiding and supporting women investors at every stage of their investment journey because we believe the key to success lies in education and informed decision-making

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