Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing
Welcome to our #32 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
From The Purse…
Editorial from the Founder
The global stock market gained $1.9tn last week as investors reacted positively to earnings reports and progress on developing a vaccine.
Yesterday, Donald Trump signed executive orders to extend unemployment benefits and suspend payroll tax after the Democrats and the Republicans failed to agree a new stimulus package for millions of Americans.
US unemployment claims fell last week however the pace of job growth has slowed, suggesting stalled recovery as coronavirus cases surged and states pull back on their reopening plans.
In the UK, the Bank of England (BoE) will maintain its all-time low interest rate of 0.1%.
The UK economy has had a strong recovery over the last few months and it is now expected that the economy will only decline 9.5% vs the projected 14% in 2020.
However, fear of surging unemployment continues as the UK furlough scheme is unlikely to be extended beyond October of this year.
The price of gold surged to record highs; it is up 34% this year.
Google’s parent company Alphabet has issued sustainability bonds valued at $5.75bn. This is the largest sustainability or green bond by any company in history.
We spotlight how to think about risk as an investor. And in the Have You Seen This? section read about why women feel less supported by their bosses during the pandemic and why a fear of investing leaves too many women without a decent pension.
If you are married, divorced or a widow it is possible that you might have been underpaid your state pension. Do check out the resources we list below.
We’re tracking two impressive female-led start-ups Orum and Topicals.
And watch the TED talk by Dr Lucy Hone called the three secrets of resilient people.
Stay safe, look after yourselves 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:
Global stocks have gained $1.9tn in market cap as investors react positively to earnings reports and progress on developing a vaccine.
The global market cap is now equal to 100%+ global GDP
China and the Rest of the World growth divide will increase
China was back at pre-Covid levels end of Q2 (April-June).
US won’t be back to pre-Covid levels until mid 2022.
UK’s recovery will take longer: it won’t be back to pre-Covid levels until the first half of 2024.
Source: Deutsche Bank
US/China: Donald Trump continues with his ‘campaign’ against China
Trump unveiled executive orders on popular social media apps Tik Tok and WeChat (Chinese technology companies).
US: no agreement on new stimulus package reached but Trump steps in
Democrats and Republicans are at odds on everything from unemployment benefits to financial aid for schools to extra funding for the US Postal Service.
The Democrats passed a $3.4tn stimulus bill (3 months ago) but the Republicans have put forward a $1tn stimulus package which the Democrats will not support.
Last night, Donald Trump signed one memorandum which partly renewed unemployment benefits and ordered the suspension of payroll tax.
Weekly jobless claims fell 249k to 1.186m vs 1.4m (estimated).
Continuing claims fell 844k to 16.1m vs 16.9m (expected).
Unemployment at 10.2% vs 10.6%.
But the pace of job growth has slowed, suggesting stalled recovery as coronavirus cases surged & states pulled back on reopening plans.
The Bank of England (BoE) will maintain its all-time low interest rate at 0.1%
The UK economy has had a strong recovery over the last few months.
It is now expected to decline 9.5% (vs the projected 14%) in 2020.
The economy is predicted to grow by 9% in 2021 and 3.5% in 2022.
The BoE continues to be ‘ready to act’ if the UK economy needs further support.
UK: furlough scheme will not be extended beyond October
It is unlikely that the furlough scheme will be extended.
Unemployment is expected to soar from 3.9% to 7.5% by end of 2020.
Gold prices surged to record highs above $2,000
This is a 34% increase this year.
Gold remains an important hedge against inflation.
Future Focus
Keeping an eye on key predictions, innovations and what’s going to impact the future
US: maximum liquidity will push stocks to new all-time highs
According to Bank of America, the stock market is to set to move higher in 2020, as the Federal Reserve continues to print money:
However, low bond yields are creating a ‘stock bubble’.
Investors should expect stocks to keep moving up until 2021.
A Covid-19 vaccine is likely to mark a ‘big top’.
Millennials buy bitcoin and older investors buy gold
According to JP Morgan Chase & Co, your age determines what you invest in during the pandemic:
Alphabet issues sustainability bonds
As part of a $10 billion debt offering, the parent company of Google, issued $5.75 billion in sustainability bonds.
This is the largest sustainability or green bond by any company in history.
Proceeds from sustainability bonds support investment in both environmental and social initiatives. (Unlike green bonds which is directed solely for environmental uses).
These bonds are an emerging asset class.
Your Money
Insights, trends and what this means for you and your purse
How can long-term home-working affect your finances
You can claim tax relief on job expenses
You should double-check your insurance
Your costs could go down (but so could your income)
You may have to work harder for a pay rise
It could affect your property price
It might help women’s finances
More women, including widows and divorcees urged to check state pension
Married women, widows and divorcees may be eligible for state pension lump sums (as they may have been underpaid).
Read more here and contact the Pension Service here.
Companies: winners & losers
Companies to watch and share price movements
The Hong Kong listed shares of Tencent fell by 10.1%
Tencent is China’s second most valuable technology company with a market cap of close to $700bn.
On Friday, Donald Trump ordered US companies to stop dealing with the WeChat platform, Tencent’s messaging platform.
WeChat has more than 1billion users in China, but in the US it has only been downloaded 19m times since 2014.
Warren Buffett buys back record $5.1bn in Berkshire Hathaway stock
The buybacks come during a tough period for some of Berkshire’s wholly owned businesses.
Berkshire’s operating profit fell 10% during the second quarter, dropping to $5.51 billion from $6.14 billion in the year-earlier period.
However this was offset by a $34.5 billion gain from Berkshire’s investments in the public markets.
ITV cancels its dividend as earnings half and ad revenue takes a severe hit
First half of trading has been adversely affected at the British media company.
Both its adjusted and statutory EBITDA had halved year-on-year, down 50% and 49% to £165 million and £159 million respectively.
The demand for advertising has declined across all categories, with total advertising revenue down 43% in Q1, and down 21% in Q2.
Whilst total viewing has increased by 4% and online streaming up by 13%, the wider online viewing trend is a threat to ITV.
In the Spotlight
Is there a topic you'd like us to Spotlight? Please tweet @jointhepurse
As an investor: how should you think about risk?
Risk is inherent in everything we do. In a financial context, it describes the likelihood of receiving our money back and what the reward or return will be.
There are different asset classes. And they all carry varying degrees of risk.
The higher the risk, we can assume the higher the return. Conversely, the lower the risk, the lower the return on the investment.
As an investor, you should always consider what the risk is for an investment. Understand the numbers, the assumptions and any vulnerabilities. Consider what you can do to reduce the risk of an investment you make.
Diversifying your investments (or not putting all your eggs into one basket) is a common strategy amongst investors to manage or reduce risk.
Pay close attention to your personal circumstances, the impact on your money (your net worth) if you do not get a good return or if you do not get your money back.
And remember, it is not about timing the market, but time in the market.
As an investor with a long-term horizon, your aim is to make a healthy return and outpace inflation (which erodes your money).
Have You Seen This?
Female-focused news, reports, research, campaigns
Women feel less supported by bosses during the pandemic
According to new research by Mercer:
only 72% of women said senior leaders were doing a good job to keep staff informed about the state of their business in the pandemic, compared to 78% of men.
5% fewer women said they thought senior leaders were doing a good job of listening to employee concerns during the crisis.
Know this: women have had to take on the majority of childcare, homeschooling and household chores during the pandemic. Companies should be recalibrating performance goals, demonstrating empathic leadership and communicating regularly. We have seen female political leaders around the world ‘outperform’ male political leaders. What is needed is more ‘feminine leadership skillsets’ being adopted by all leaders regardless of gender.
Fear of investing leaves too many women without a decent pension
Women are often held back by:
a lack of time, a lack of confidence, access to the right information, industry jargon and not knowing where to start.
not understanding ‘risk’.
missing out on market returns.
Know this: it is not uncommon to cite that women ‘lack confidence’ when it comes to money and investing. And this can become a self-fulfilling prophecy for many. It’s important to consciously commit to overcoming this belief. The best way to do this is to take small steps and engage. For example, find an accountability partner and/or choose an online investment platform where you can invest as little as £25-£100 a month: you can start learning about investing with very little risk.
What We’re Tracking
Female-focused products or services, start-ups and businesses led by women, investment and research.
Orum: (US)-founder and CEO Stephany Kirkpatrick, wants to shift the thinking around money movement from where the consumer figures out in which account money needs to flow, to one where everything is managed for the consumer.
The New York based company has raised a seed round of $5.2m led by Homebrew, Inspired Capital, Acrew, Bain Capital Ventures, Clocktower, BoxGroup and angel investors.
Kirkpatrick opened and closed the seed round during the pandemic.
The company is now working with 50 customers and has a waiting list.
Topicals: (US)-founded by Olamide Olowe and Claudia Teng-is a newly launched skincare company for people dealing with chronic skin conditions. (We love that the founders will be donating 1% of the profits to organisations which advocate for mental health issues):
They raised $2.6 million in seed investment from (including) celebrity angel investors Netflix CMO Bozoma Saint John, entrepreneur and DJ Hannah Bronfman, and Insecure actors Issa Rae and Yvonne Orji.
Money Habits of the Week
Do you have a money habit you would like to share with us? Tweet @jointhepurse
Make a decision to look into online investment platforms this week.
Research how you can invest into a stocks and shares ISA (Individual Savings Account) or even a self-invested personal pension (SIPP).
The good news is that a simple questionnaire will help you determine whether to invest as a (for example) cautious, moderate or adventurous investor.
Your risk profile can be matched to potential ready-made online investment portfolios.
Remember that your returns match your risk (profile) and this is also dependent on how volatile the stock market is.
Learning by doing is one of the most effective ways to understand the market.
Start small.
Don’t forget to find an accountability partner or connect with your tribe at The Purse.
You got this.
What We’re Watching
Dr Lucy Hone builds resilience among individuals, communities and organisations.
Watch this TED talk: 3 secrets to resilient people. Everyone experiences loss, but how do you cope with the tough moments that follow? Resilience researcher Lucy Hone shares three hard-won strategies for developing the capacity to brave adversity, overcome struggle and face whatever may come head-on with fortitude and grace.
Coffee Break? Read This
The ‘shecession’: why economic crisis is affecting women more than men
The ‘female’ brain: why damaging myths about women and science keep coming back in new forms
How to handle a ‘friendly’ co-worker who’s really a total jerk
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
The Purse Ltd. Copyright 2020 & All Rights Reserved.
Share this post