Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing
Welcome to our #26 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
Photo by Christina @ wocintechchat.com
From The Purse…
Editorial from the Founder
According to the International Monetary Fund (IMF) last week, the pandemic has triggered the worst recession since the Great Depression in the 1930s.
The global economy will contract by 4.9% this year and will take a ‘hit’ of $12 trillion. The UK’s economy is expected to shrink by 10.2% versus the 6.5% as projected.
And Christine Lagarde, President for the European Central Bank, has warned that “we need to be attentive to those likely to be affected more by the crisis: the poor in all countries, the poorest countries, young people and women”.
The UK Chancellor Rishi Sunak has hinted at further economic stimulus but all eyes are on the economy reopening ‘safely’ on the 4 July.
Unemployment is expected to double from 4%, but business surveys all point to a V-shaped recovery.
Meanwhile high stock valuations continue despite the increase in Covid-19 cases and the uncertainty in the global economy: the global markets lost $1.2 trillion in market cap last week.
Warren Buffett and others have warned against speculating in the stock market. Day traders are buying stocks in distressed and bankrupt companies. Remember, investors don’t speculate.
Facebook’s share price plummeted as brands such as Unilever pulled their ad spend and Wirecard, the German payments card company filed for bankrupcy.
We Spotlight gender lens investing and why it makes good business sense.
Don’t forget to listen to The Purse Podcast with Gail Wong, the General Partner for Her Capital, a venture fund which invests with a gender lens. Or listen here.
We’re tracking Zoox, the self-driving startup led by a black female CEO, Aicha Evans which sold to Amazon for $1.2 billion.
Read how to become less anxious about your money and watch the TED talk: how to gain control of your free time.
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:
The International Monetary Fund (IMF) has said that the global economy will take a $12trn hit from the pandemic and that the global economy will contract by 4.9%.
The pandemic has triggered the ‘worst recession since the Great Depression’ in the 1930s.
It is expected that it will take 2 years to recover to where the global economy was at the end of 2019. And if the second wave of the pandemic hits, global growth will go to zero.
The UK economy will shrink 10.2% in 2020 versus the projected 6.5%.
In a video posted on Linkedin, Christine Lagarde, President for the European Central Bank warned that: “we need to be attentive to those likely to be affected more by the crisis: the poor in all countries, the poorest countries, young people and women”.
The UK Chancellor Rishi Sunak hinted at further economic stimulus, but said that the most important thing is for the economy to ‘safely’ reopen (on 4 July) as this will support billions of jobs in hospitality, leisure and retail.
He acknowledged that there are ‘tragic’ projections for ‘what might happen with employment’.
It is expected that unemployment will double from 4% to unemployment last seen in the 1980s.
The UK economy faces a long road to recovery, despite business surveys pointing to a V-shaped recovery.
On Friday, the S&P 500 dipped amid concerns of Covid-19 cases going up again. The European stock markets seemed ‘unshaken’ despite the Federal Reserve warning on loan losses and Covid cases rising.
Global stocks lost $1.2 trillion market cap last week, as Covid-19 cases continue to rise; the Federal Reserve balance sheet shrank for a second week but stocks remain high and many say are ‘overvalued’.
Future focus
Keeping an eye on key predictions, innovations and what’s going to impact the future
Amazon creates its own climate fund as it struggles to cut its own emissions
It will focus on startups that could help it and other businesses achieve “net zero” emissions by 2040.
Amazon still has plenty of work to do to reduce its own emissions, which rose 15% last year to more than 50 million metric tons.
Two reasons China may be ramping up their digital currency project
The first reason: the Chinese government sees poverty alleviation as a top priority for 2020. Currently, there are 5.5 million Chinese people living in extreme rural poverty.
The second reason: China seeks depend less on the U.S. dollar especially given the ongoing trade tensions with the US.
Coronavirus Impact: Your Money
Insights, trends and what this means for you and your money
US banks: deposits increase to $2 trillion during the pandemic crisis
US: Warren Buffett warns about the dangers of ‘speculating’. But day traders are not paying attention
Day traders have piled into distressed (eg airlines) or bankrupt (eg Hertz) companies in recent weeks.
Zero-commission trading platforms such as Robinhood have made it easier to enter the market and trade.
Warren Buffett has warned that ‘speculating’ is not the same as ‘investing’.
And day traders investing (to the extent we are seeing now) could in fact accelerate a market crash.
UK: Half a million people are putting off investing in an ISA
The number subscribing to cash ISAs increased by 1.4 million from 2017/18, those subscribing to stocks and shares ISAs fell by 450,000.
Higher earners also tend to subscribe their money to stocks and shares while lower income groups prefer cash.
‘The market uncertainty that we’ve seen in recent years appears to have put people off investing their ISA money...’
Financial anxiety: how to take care of your mental health when you’re having money worries
Step away from the worry and be present
Take a moment to pause
Prioritise your sleep
Give yourself time to relax
Don’t shame people for how they manage their money-we all make mistakes
Good money management isn’t just ‘common sense’.
It’s never too late to get started ie start building new habits.
Companies to Watch: winners & losers
Companies to watch and share price movements
Facebook share price plummeted 7%, which is equal to $50bn of market cap as brands such as Unilever, Coca Cola, Verizon and Ben & Jerry’s pull ad spending from Facebook, citing hate speech, racist content and ‘dividing politics’.
Wirecard files for insolvency amid German accounting scandal.
The German payments card company is ‘missing’ £1.7bn.
According to its auditor EY: ‘there were clear indications of “an elaborate and sophisticated fraud involving multiple parties around the world”.
In the Spotlight
Is there a topic you'd like us to Spotlight? Please tweet @jointhepurse
What is gender lens investing?
Did you know:
that greater gender diversity on boards is a predictor of long term shareholder value and lower stock price volatility.
female entrepreneurs generate higher revenue compared to men (more than twice as much per dollar invested)
the female consumer purchasing power exceeds the GDP of China and India combined.
but approximately only 3% of venture capital funding goes to female CEOs.
Gender-lens investing integrates gender-based factors into investment decisions with goals ranging from enhancing risk-adjusted returns to driving gender equality.
It is one of the most rapidly growing segments of sustainable investing.
Asset growth in gender lens investing products accelerated and totalled $3.4 billion as of June 30, 2019. They are growing in popularity with individuals and institutional investors.
An example of a gender lens product is The Future World Girl Fund introduced by Legal and General in 2018: a tracker fund which backs UK firms that have a greater gender balance.
And we are also seeing a rise in female-founded venture capital funds which focus on female founders only including Her Capital (who we interviewed this week), Backstage Capital, The Helm and Voulez Capital.
Have You Seen This?
Female-focused news, reports, research, campaigns
The coronavirus could cost working mothers £12,000 in retirement
Women already retire with a fifth of the pension wealth men do.
Mothers are more likely to have reduced their hours or lost their job due to the coronavirus which will impact the size of their pension even more.
Surprising study pinpoints why older women face a double whammy of age and sex discrimination at work (US white paper)
“These women are falling through the cracks. All my results consistently find that age discrimination laws were far less effective for older women compared with older men. In some cases, I found that age discrimination laws did not improve the labor market outcomes for older women at all.”
What’s the solution? …for laws to be applied jointly, as well as for future legislation to overtly acknowledge intersectional discrimination such as age-plus-sex discrimination.
But the first step is awareness and hire older women.
What We’re Tracking
Female-focused products or services, start-ups and businesses led by women, investment and research.
Zoox: (US): a self-driving startup, led by black female CEO Aicha Evans, has been acquired by Amazon for $1.2billion.
Money Habits of the Week
Do you have a money habit you would like to share with us? Tweet @jointhepurse
Spend some time looking into gender lens investing and what products are available.
Check out publicly traded equity gender lens funds and how they have performed compared to others.
And don’t forget to listen to our podcast with Gail Wong, the General Partner for Her Capital, the venture capital fund which invests with a gender lens.
What We’re Watching
Laura Vanderkam studies how busy people spend their lives and she’s discovered that many of us overestimate our commitments each week and underestimate the time for ourselves.
There are 168 hours in each week. How do we find time for what matters most? Watch this TED talk about how to gain control of your free time.
Coffee Break? Read This
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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