What I Have Been Reading This Week...

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Mar 31, 2017
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Article, Credit Scores, Career, Paying for College, Question of the Day, Research, Credit Cards, Investing, Student Loans, Current Events, Credit Reports

Here’s a weekly round-up of articles that caught my attention this week that I thought you would find interesting:

  • Want to find out what it feels like to own a volatile stock? Find out how this investor got emotional by making a $3 trade in this MarketWatch article, “I drove myself crazy by investing $3 in the stock market.”

“Turns out, it doesn’t cost much to drive yourself batty over your investments. For the past week, ever since I broke one of my cardinal investing rules by buying an individual stock, I have experienced pronounced emotional swings over the company’s every tick and trade, feeling accomplished when the price rises and despondent when it falls.”

  • You may have heard about robo-advising to create passive investing portfolios, now the largest fund company in the world is investing in algorithms to make stock picks in actively managed funds. Find out more in this NY Times article “At BlackRock, Machines Are Rising over Managers to Pick Stock,”

“Now, after years of deliberations, Laurence D. Fink, a founder and chief executive of BlackRock, has cast his lot with the machines. On Tuesday, BlackRock laid out an ambitious plan to consolidate a large number of actively managed mutual funds with peers that rely more on algorithms and models to pick stocks.”

“In an effort to grow our shared understanding about promising practices and opportunities, and to keep this information current, the CFPB has published and updated its Guide for Advancing K-12 Financial Education. This guide is intended for all leaders who seek to advance the development and implementation of financial education for children and youth. It includes case studies which feature promising practices and provides links and references to third-party resources that users may find helpful.”

“Revenue from streaming music accounted for the majority of US major record labels’ sales for the first time ever last year, a music industry trade group said Thursday. Streaming vaulted over the one-time leader digital downloads, which declined faster than any previous year. The data underscores the meteoric popularity of streaming tunes, which a year earlier barely eked past downloads to hold a roughly equal share of the US sales market.”

  • What are ten headlines that you will never see in financial media (from blogger Dan Solin with hat tip to Big Picture Blog)? This would be a fun activity to have your students try and come up with these before making the big reveal. Another idea would have students do the research to describe why the financial media won’t ever have the specific headline. Here are a few:
    • Our advertisers pay us to provide “news” that enriches their bottom line at the expense of yours.
    • Our “experts” are no more accurate in their predictions than the flip of a coin.
    • It would be more accurate to call “predictions” by our experts “random guesses.”
    • We don’t have a clue where the market is headed and neither does anyone else.
  • How can you get a credit score over 800? Hear from the experts in this CNN article:

Only about 20% of Americans that have a credit score land above the 780 mark, which is considered the top tier, according to credit reporting agency TransUnion. Even fewer are above the 800 mark. Anyone can attain a strong credit score simply by practicing the tried-and-true methods of good credit management: pay your bills on time and keep your debts modest. But there are some habits people in the 800-plus club tend to have in common…

  • The “gig” economy requires financial planning for all those who participate in it, according to this report from Fidelity (hat tip Big Picture Blog) which highlights how freelancers have to plan for cash flow, taxes, savings for the future and insurance:

Whether you freelance full time or have a side gig in your off hours, it takes some financial know-how to make it work. Here are four important financial matters to plan for: 1) Cash flow: Freelancers sometimes struggle with uneven cash flow. Checks may not arrive when you expect. For people accustomed to having a full-time job where cash is seamlessly deposited into their bank account like clockwork, it can take some getting used to—and some savings to tide you over.

  • Am I the only one amazed that it takes a legislative bill for student loan borrowers to get details about their loans (from KIRO7):

Senate Bill 5022, the Washington Student Loan Transparency Act, requires lenders to inform students about the status of their loans, how much they owe, what their payment will be and how much time they have to pay it back.

  • What are the biggest complaints consumers have about credit cards (Creditcards.com)?

The Consumer Financial Protection Bureau (CFPB) released its monthly snapshot of consumer complaints in the financial services industry this week. The report, which regularly focuses on a different financial product to highlight consumer complaint trends, focused on credit cards and what irks consumers about their plastic friends (or foes, depending on how you view it).

 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.