Women and Investing
Our financial advisors know female investors prefer to take a different and effective approach.
What to Watch in 2017 and the Years Ahead
Many national and global factors are creating a complex financial outlook.
Risk Management
Discover the foundation of a sound investment philosophy.
Tax Strategies for High-Income Taxpayers
Evaluate investment decisions that could help mitigate your tax liability.
The Girl with the Draggin' W-2
Closing the gender pay gap should be more than just a social goal.

When it comes to investment planning and goal-setting, women often take a different approach than men — which can create both challenges and advantages. Many studies have suggested that, for example, compared with their male counterparts, women may be more risk-averse when it comes to their money and that they sometimes lack investing confidence. On the other hand, women may do a more effective job of considering philanthropic goals and connecting money with their family’s independence and security.

Because of the unique ways women look at their finances, the Grinnell Souza Group tries to take potential “gender traits” into consideration when working with female clients, either on their own or as part of a couple.

Long-Term Thinking

So-called “gender differences” can be beneficial — especially for couples who blend their investment strategies. If in a relationship, a great approach is to have one partner who watches for short-term opportunities and another who champions “the long-haul approach” can make for a good balance.

Another reason why women may focus more on long-term planning, and a reason why women’s planning habits may differ from their male counterparts, is their traditionally longer lifespans, which may necessitate a longer-lasting retirement income plan.

Caring for Others Versus Oneself

Women often place a higher priority on caring for others with their investments than creating a comfortable lifestyle for themselves. For instance, they may value supporting their elderly parents, leaving a legacy for their children, and other items, even at the expense of their own lifestyle.

For single women, The Grinnell Souza Group works to help ensure that their clients don’t help everyone else at the risk of jeopardizing their own financial security. The team helps to define their goals and works together to obtain those while staying true to their values.

Building Confidence

Although times and expectations are definitely changing, older generations of women grew up hearing: “Men are naturally better than women at math,” which may manifest itself in some women — particularly older women — as a lack of confidence about making investment decisions.

It is important to remind women clients that even if they are good at math, investing is about more than just numbers. Women are great at understanding trends, interconnections and relationships — all of which matter when making investment choices.

Obtaining Information

Some surveys indicate that women tend to ask more questions than men when it comes to investing, which can make a close relationship with their advisor that much more important. This actually shows that women are more thorough in their process with their investments, which the Grinnell Souza Group encourages.


The characteristics that make women who they are translate into them being unique and well equipped to take control of their financial futures. The Grinnell Souza Group prides itself on working with women in transitional periods and points of uncertainty to project their portfolios and attain their goals.

 

Today's investors face a complex environment. In the U.S., the economic recovery has produced unequal benefits for the employed vs. the unemployed, savers vs. consumers, and small businesses vs. large corporations. This disparity has spilled over into the political landscape. Outside the U.S., many countries also are dealing with divisions from the long-drawn-out recovery, ethnic and religious differences, and geopolitical and economic disruptions. Moreover, global trade, which contributed greatly to economic expansion in past years, could be affected by protectionist policies. Here are four focus themes we are watching for the years ahead:

The Divided Recovery

We are currently in the latter stages of the business cycle, but this recovery has lagged prior recoveries and the benefits have accrued unevenly to different groups of investors, workers and countries. Fixed-income assets can help stabilize portfolio values in times of market distress; we favor intermediate-term high-quality U.S. corporate bonds within a well-diversified fixed income portfolio.

Policies of Change

Old and new government policies will attempt to extend the maturing economic cycle. The mix of policies should create potential opportunities, but investors may need to be more selective. Alternative investments can take advantage of the maturing economic cycle, which we expect to increase price dispersion in equity markets.

The Agile Investor

We anticipate potential opportunities for those who are able to determine which industries will benefit from the next phase of globalization, expanding populations, and other trends. In this environment, tactical decisions may enhance performance returns. We also see value in using both active and passive strategies.

Investing Across Generations

Baby Boomers and Millennials are trading places as the latter become the largest working generation and the former retire from the workforce. Boomers may want to acknowledge their expected longevity by including growth assets as possible for their retirement.


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Investing today has become very complex. It involves much more than deciding basic stock and bond allocations and determining success based on a simple measure of portfolio performance. Investment products are services provide more choices than ever for individual investors — and while they may offer more potential rewards, they also open the door to more opportunities for risk.

As a result, evaluating risk has become increasingly important. Risk management has gone beyond the traditional measures of volatility to now include characteristics such as liquidity, transparency, and leverage.

This report outlines our core beliefs as to how we think investors should pursue their financial goals. We titled it "Risk Management: The Foundation of a Sound Investment Philosophy" because foremost, we believe that managing risk is the foundation to managing money.

Have a Plan

Each investor should have a long-term investment plan that lays out their investment goals the time horizon for each goal. Money management should be a disciplined process that starts with establishing objectives. You cannot establish an investment strategy if you don't know what objectives the strategy is aiming to meet. Once they are defined, you can determine how you plan to accomplish them. Issues such as cash-flow needs, liquidity needs, growth requirements, tax sensitivities, and family dynamics are some of the factors that need to be addressed in seeking to achieve long-term financial goals.

Encouraging investors to stick with their long-term plan is a key aspect of our philosophy because the investment process is as much abut the journey as it is the destination, and discipline can maximize the chances that they will be successful. Sticking to the plan is a critical component in managing risk.

Before building an investment portfolio, we believe each investor should articulate their wishes (return and income needs, tax situation, and liquidity constraints) and concerns (time horizons, risks, feelings, toward market up-and-downs) in a written plan as part of the planning process. The plan is a living document that evolves over time and should be revisited periodically to capture changes in an investor's circumstances and the capital markets.


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Many higher-income taxpayers have been exposed to increased taxes the past few years. And potential legislation in the near future could change the income tax landscape once again. Even so, it’s important to remain focused on your long-term objectives, and meet with your Financial Advisor to develop and manage an asset allocation strategy that will help you work toward your goals. Keep in close touch with both your tax and Financial Advisor to stay abreast of the latest tax provisions. As you consider adjustments based on tax considerations, be mindful of how much money you will keep versus what you will pay in taxes.

For example, even at the highest possible combined long-term capital gain and Medicare surtax rate of 23.8%, you retain all of your cost basis value from a transaction plus 76.2% of your gain (minus any applicable state income taxes). Long-term capital gains rates may be higher than in previous years, but 23.8% is still less than the 43.4% rate on ordinary income (39.6% federal income tax plus the 3.8% Medicare surtax). If you and your Financial Advisor determine that repositioning some of your portfolio will better help you achieve your goals, tax considerations should not hold you back.

It may be challenging to keep your income below the thresholds. Some other common tax planning considerations include timing of income and deductions as well as understanding the character of the income you receive. You may have such questions as:

  • How do the phase-outs of itemized deductions and personal exemptions work?
     
  • Should you defer compensation?
     
  • Should you choose investments that offer tax deferral?
     
  • Can you change the tax character of income you receive?
     
  • How may the timing of gain recognition affect your tax bill?
     
  • Are you subject to alternative minimum tax (AMT)?

In the remainder of this report, we'll address these questions, providing you and your team of advisors — tax, legal, and financial — both the advantages and limitations of various strategies.


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Women’s labor market participation, experience, and education all mirror that of their male counterparts more closely than in any previous period and yet women still earn just 80 cents for every dollar earned by men. While this frequently cited figure is accurate, it is somewhat blunt in its measurement. Career choice, hours worked and other factors discussed in this report explain some, but not all of the difference. Research indicates that bias also plays a role and companies still have some work to do to ensure that women are compensated fairly.

Closing the gender pay gap should be more than just a social goal. For businesses, it is a way to boost profits and tap a deeper pool of talent. For the larger economy, narrowing the pay gap could draw more women into the workforce and increase labor force participation, an oft-cited factor in explaining below-trend GDP growth. Raising female participation and earnings would support income and spending, particularly for low-income households. The Girl with the Draggin’ W-2 is not looking for a handout. She seeks equal pay for equal work.

  • How do the phase-outs of itemized deductions and personal exemptions work?
     
  • Full-time working women are paid just 80 cents for every dollar earned by men.
     
  • Over the past 50 years, women have made significant gains, but progress towards closing the pay gap has stalled over the past 15 years.
     
  • Women’s labor force participation topped out around the same time and remains 12 points below men’s.
     
  • Closing the wage gap could draw more women in the labor force, benefiting both businesses and the broader economy.
     
  • Women spend 50 percent more time than men on housework and family care, a factor that depresses their workforce participation rates and wages.
     
  • On an encouraging note, women are now out-achieving men educationally. This bodes well for their future earnings and labor force participation rates.

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