Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing
Welcome to our #28 weekly newsletter in 2020.
Every week we curate key content and apply a female-lens so you can stay informed and inspired about money and investing.
Stay in the know.
Keep on top of global economic, financial and investing news and trends. And read about what this means for you and your money in 2020 during Covid-19 and beyond.
If you’re short on time, listen to the editorial on audio for a brief overview.
“Our mission is to help women take control of their financial future”
-Jana Hlistova
Source: Vlada Karpovich
From The Purse…
Editorial from the Founder
Global stock markets gained $2tn last week despite a resurgence of Covid-19 cases. The Nasdaq hit an alltime high and Big Tech topped $7tn (which is the combined GDP of Germany, Italy and Indonesia).
Meanwhile the price of gold reached $1800 for the first time since 2011.
During economic uncertainty and because central banks are printing money at an unprecedented rate, investors look to gold as a store of value.
We may also see faster adoption of blockchain technology and crypto as a result of the pandemic.
Goldman Sachs has cut the US GDP estimate in the third quarter. Revived state restrictions and stay-at-home activity will slow economic recovery.
In the UK, unemployment could soar to 15% if there is a second wave of the pandemic.
UK Chancellor Rishi Sunak has introduced a £30bn package of measures to cushion the economy.
Read about the stamp duty holiday boost for buy-to-let investors, 71% of UK households have saved money during the lockdown and apparently money can buy you happiness (but it’s not as much money as may think).
We spotlight how much the highest paid female CEOs in the US are earning compared to Elon Musk. And the gender pay gap is widening for women during the pandemic.
Tesla is making headlines again and read about why online fashion retailer Boohoo lost £1bn in value.
We’re tracking female-led investment firm Operator Collective which connects industry operators making it easier for them to invest in early-stage businesses.
And check out my podcast interview with Lauren Winfield, the Founder & CEO of Signum City, a mobile app which illuminates the power of money by gamifying the stock market. Or listen here.
Stay safe, look after yourself and your loved ones.
I hope you enjoy this week’s newsletter. Until next week!
Jana
The Big Picture
Global markets and economy news, trends and indicators
The Coronavirus Effect:
UK Chancellor Rishi Sunak, unveiled a £30bn package of measures to help the economy. This includes:
Global stock markets gained $2trn in market cap last week as investors continue to pile into Big Tech despite a resurgence in Covid-19 cases. Global market cap is now 98.5% of global GDP.
Gold price hit $1800 for the first time since 2011
During economic uncertainty, where central banks are printing money at unprecedented rates, investors are looking to gold as a store of value.
The gold price is expected to reach $2000 (and higher) in the coming months.
The Nasdaq closed at an alltime high with a 4% increase this week
Big tech tops $7tn this week (Facebook, Amazon, Netflix, Google, Microsoft, Apple, Nvidia) which is equal the combined GDP of Germany, Italy and Indonesia.
Future Focus
Keeping an eye on key predictions, innovations and what’s going to impact the future
US: Goldman Sachs cuts GDP estimate
GDP growth, in July-Sept, is expected to be 25% vs 33%.
Revived state restrictions and stay-at-home activity will slow economic recovery.
Consumer-spending is slower than expected. And the recent resurgence of coronavirus cases is hampering a V-shaped recovery.
Several economists have said that an effective virus treatment is key to a fast recovery.
The European Commission expects a deeper GDP decline in 2020
The Eurozone will contract by 8.7% this year not 7.7% as predicted in May.
The EU now forecasts the Eurozone to decline by 8% in 2020.
UK unemployment could soar to 15% (if there is a second wave of the pandemic). Currently UK unemployment stands at 3.9%:
If the UK avoids the ‘second wave’, the unemployment rate is likely to rise to 11.7% by the end of 2020.
“In the UK, new online job postings for middle-skill occupations contracted twice as much between February and April 2020….and 40% more than for high-skill occupations- Covid-19 shock will reinforce the existing trend of employment polarisation.”
Covid-19 could accelerate the adoption of crypto
Coinbase’s former CTO, Balaji Srinivasan, has said that the pandemic could end up accelerating blockchain and crypto adoption.
As governments around the world increase and centralise their control, people and businesses seek decentralised alternatives.
Women-led activist firm bets on ESG reforms in emerging markets
ESG is gaining traction as an investment strategy and have driven outperformance during the recent coronavirus-led market turmoil.
Cartica Management LLC is a majority women-owned activist investment firm which manages about $1.2 billion in assets.
The firm sees opportunities for ESG investment in countries where such principles are less advanced, such as China or South Korea.
BlackRock noted that 88% of sustainable indexes did better than their non-sustainable counterparts in the first four months of 2020.
Your Money
Insights, trends and what this means for you and your purse
UK: stamp duty holiday boost for buy-to-let investors
The stamp duty threshold has increased from £125,000 to £500,000 (England and Northern Ireland) and will apply until end March 2021.
The Treasury estimated that the changes meant 9 out of 10 purchasers would pay no stamp duty, with an average saving of £4,500.
Landlord investors can transfer their properties to a limited company structure and take advantage of tax relief on mortgage interest.
Investing for two or more children?
Junior ISAs are proving popular for parents who invest for their kids.
HMRC revealed £419m was subscribed into stocks and shares JISAs in 2018/19, up from £385m in 2017/18 and £333m the year before.
71% of households have saved money during lockdown
Spending was reduced by an average of £2,879 each across the 13 weeks that Brits were told to stay at home during the peak of the pandemic.
The average weekly saving of £221.50 was achieved by people cutting back on their spending habits, such as drinking less and buying less clothes.
UK: How much money can buy you happiness
Raisin UK suggests that the happiest people are in Winchester:
where the life expectancy reaches 83.5 years of age
and where the average salary is £35,346 ,only a few thousand pounds higher than the national average of around £29,000.
According to a study by UCL, having a total household net worth of approximately £488,000 (including your home, savings and pension pot) by the time you reach your 50s can add nine years of good health to your life.
US: Personal finance lessons from the pandemic
Keep even more cash on hand
Manage personal debt more aggressively
Make a plan for social security benefits
Save more
Companies to Watch: winners & losers
Companies to watch and share price movements
Tesla share price is now $1.5K+. Market cap is now $287bn, which is 3x more than Volkswagen’s market cap.
Tesla’s shares have risen by more than 580% this year and is on the verge of joining the S&P 500 July 22.
Some predict that the Tesla share price could reach $7000+.
Boohoo, lost £1bn in value over ‘Leicester garment factory scandal’
The online fashion retailer, which owns brands such as Pretty Little Things and Nasty Gal, has been working with a supplier in Leicester which exploits its workers.
An uncover investigation revealed that workers were not being paid a minimum wage nor were they wearing protective masks.
On Monday, shares slumped by 23% and reduced the company valuation to £3.7bn.
“It bothers me greatly that the emergence of a new garments industry in the UK is being built around the same production model and lack of accountability that we’ve seen leading to big problems with exploitation in the global south,” said Peter McAllister, the executive director of the Ethical Trading Initiative.
In the Spotlight
Is there a topic you'd like us to Spotlight? Please tweet @jointhepurse
How much are the highest paid female CEOs earning compared to Elon Musk?
Elon Musk, the space and electric-car chief, is the highest paid executive in the US in 2019, earning $595.3 million.
This is based on a deal he agreed to bring in 10s of billions of dollars if Tesla Inc, became one of the world’s most valuable companies.
How do the highest paid female CEOs in the US compare?
Know this: The gender pay gap is a complex topic and is subject to many variables. According to the World Economic Forum, women will have to wait 257 years before gender parity is achieved. Some good news: female CFOs buck the pay gap trend: they earn on average 132% more than their male counterparts.
Have You Seen This?
Female-focused news, reports, research, campaigns
How the coronavirus is widening the gender pay gap
Britain sacrifices about £123bn a year because of lost productivity associated with unequal compensation.
Women are paid less because: ‘… hostile men, and the institutions they create, keep finding ways to frustrate gender equality.’
Know this: The UK’s Equal Pay Act of 1970 contained a provision that there could be no different treatment of one sex versus the other. However it has not accounted for gender bias, mothers being frozen out of the economy, and men being in the position to determine career advancement and they can in fact hold women back.
Men are more ready for unexpected expenses than women
Based on a report by Aegon, 30% of men are confident they could deal with a surprise cost vs 21% of women.
33% of female employees said they feel under-prepared for a financial emergency compared to 26% of men.
Know this: mothers are 14% more likely to be furloughed than men. Women tend to be in lower paid jobs and work in industries that have been impacted by the pandemic. 41% of women work part-time and women are more likely to take career breaks. It should not come as a surprise that women’s financial wellbeing is more likely to suffer. It is crucial for women to seek advice and support for how to make up for any shortfalls in income.
Top employers urged to disclose parental leave and pay
The 2020 Parental Fog Index found there was a small increase (from 18% in 2019 to 24% in 2020) in the number of employers that published detailed policy details including:
pay and duration of parental leave and flexible working arrangements.
Know this: organisations which offer visibility tend to be larger and more established including Unilever, EY, Santander, KPMG & Deloitte. The quality of information on parental benefits will be an “increasingly critical tool in attracting and retaining the right talent to thrive and compete”.
What We’re Tracking
Female-focused products or services, start-ups and businesses led by women, investment and research.
Operator Collective: (US)-an investment firm for people who didn’t have a voice. Founded by Mallun Yen and Leyla Seka:
They connect operators, mostly women and people of colour, who have experience building and running companies, but who may not previously been involved in early stage investment or venture capital.
Rigid buy-in requirements have been removed: LPs can contribute as little as $10,000 all the way up to millions of dollars.
Money Habits of the Week
Do you have a money habit you would like to share with us? Tweet @jointhepurse
Technology stocks in the US have grown exponentially over the last 10 years.
If you had invested $1000 in Netflix 10 years ago, your investment would be worth approximately $70,000 today (annual compound rate of 47.5%).
Research online platforms or mobile apps where you can buy shares or fractional shares in US companies. Use the discovery tool in the app to look up Amazon, Facebook, Apple and Microsoft.
Take note of the share price today and trace back to what the share price was 10 years ago.
Spend some time reading about about how you might be taxed on any gains you make when you sell these shares (or fractional shares).
Reach out to a financial advisor or a financial coach for advice or support.
And don’t forget to connect to your tribe of women.
What We’re Watching
Chris McKnett helps institutional investors put money toward sustainable and socially-forward assets.
Watch this TED talk about sustainability and why institutional investors can make significant environmental progress by choosing to invest in this way. And why investors need to look at a company's environmental, social and governance structures too.
Coffee Break? Read This
Hair sample tests may give women more accurate fertility predictions
Neuroscientist: Covid brain is real. Here’s how to deal with it
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
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