How Covid Has Altered the Conversation About Money

How Covid Has Altered the Conversation About Money

Some women who have let their husbands deal with fiscal matters now recognize that they can no longer bury their heads in the sand. The “Newton Investment Management—Purpose statement” was ratified by Newton’s Board on September 7 and published on its UK website on September 11 and U. S website on September 15. Chewy stock is dipping despite beating on earnings and revenue expectations. Given its secular growth drivers, I’m a buyer of Chewy. Half of all households reported financial strain during the pandemic, but its impact has disproportionately affected Blacks and Latinos. Sibayne Stillwater (SBSW) just pulled back to a trendline that, if history is any indicator, could sent it to new highs The university says it will credit their tuition toward the spring semester.

Some women who have let their husbands deal with fiscal matters now recognize that they can no longer bury their heads in the sand.

Before the coronavirus, Tara Beier and her husband, Dennis, rarely discussed money. They kept separate bank accounts and divided their household responsibilities. Her husband, 42, covered the mortgage on the two properties they own, while Ms. Beier, 38, managed and took care of a rental home. It worked fine for their 12 years of marriage.

And then the world shut down, and his job as a producer in the film industry evaporated. Suddenly, the mortgage fell on Ms. Beier’s shoulders. A singer-songwriter, she is in now responsible for covering mortgage, food, everyday expenses and rent. She doesn’t mind: “I felt like he’s relying on me more as a woman,” said Ms. Beier, who lives in Santa Monica, Calif.

But it has also been a challenge. Ms. Beier didn’t really know much about their financial situation, and she had always been reluctant to ask. “I grew up in a family where if you talked about money it ended up heated or a dangerous situation, or uncomfortable,” she said. “My dad had the financial control.”

Once the coronavirus pandemic hit, she wanted to know specifics. Because what if her husband got sick? Where were their important documents, or passwords for bank accounts? Did he have any debt? Together in isolation for three months, the couple had lots of time to talk. And talk they did, about their dreams, their goals, and their finances.

It’s a conversation that’s echoing in households across the country, as many women, who have often let their husbands deal with fiscal matters, recognize that they can no longer bury their heads in the sand. In an era when everything feels uncertain, they crave transparency, especially when it comes to money.

“Covid has provided an opportunity for people to turn more inward — inside their house, inside their finances,” said Erika Wasserman, a financial therapist in Miami, who has noticed this trend in her own practice. “Women are planners by nature, so for us this is an opportunity to ask the husband or whoever’s managing the finances, what’s our plan? Not just what’s our budget or mortgage, but what’s our plan for life insurance? Where do you want to be buried? That might be the first time they’re asking the questions in a long time.”

Beyond health concerns, there is the very real fact that more women than men have lost jobs during the pandemic. Between February and May alone, women lost 11.5 million jobs, compared with nine million for men, according to the Pew Research Center. Only a third of those jobs returned in May and June, reports the National Women’s Law Center. At the same time, many women are bearing the brunt of child-care responsibilities during the pandemic, while caring for parents at the same time. No wonder they are worrying about money.

“Financial planning is all about taking care of your dependents, and women feel like they have more dependents right now,” said Megan McCoy, a financial therapist and professor of financial planning at Kansas State University.

With that in mind, women are having to educate themselves. In the March 2020 U.S. Bank Women and Wealth Insights Study, a survey of 3,000 men and women investors with minimum investable assets of $25,000 found that 47 percent associated negative words like “fear, “anxiety,” “inadequacy” and “dread” with financial planning, compared with 31 percent of men.

Michelle Smith, the chief executive of Source Financial Advisors in New York, says it’s time women take a more active role in the household finances. “In my experience, it’s still male dominated within a marriage,” said Ms. Smith, who runs Wife2CFO, an eight-week online financial education course for women.

“I hate to paint that, but it’s true,” she said. “A lot of women are scared to sit down and say — What’s in my name? What do we have? Do we have any trusts? What’s this thing I signed?’ So many women don’t know what to do.”

Alison and Sal Strazzullo of Manhattan have always had a more traditional division of labor. Ms. Strazzullo is a fit model and a stay-at-home-parent who takes care of their three young children, while Mr. Strazzullo, 48, a lawyer in New York, is in charge of their money.

“Sal has always made all the decisions for our family,” Ms. Strazzullo, 32, said in an email. “Because of the uncertainty of Covid-19 and what it can do to people, we both knew we needed to know everything about each others’ finances. I needed access to all the family’s information in case anything happens to him. I wanted to make sure he and I were clear on our wishes and finances should anything happen to either of us during the pandemic and beyond.”

Amy Richardson, a certified financial planner with Schwab Financial Planning in Denver, said she has been having more conversations about finances with both spouses in attendance. Pre-pandemic, usually only one partner — and usually just the man — would show up. “Knowledge is power right now,” she said. “People have realized how important it is to be engaged and have some level of involvement in the conversation.”

Vanessa Gordon, 31, was always happy to let her husband, Dr. Kris Gordon, 44, a family physician, handle the family money.

“It never needed to come up,” said Ms. Gordon of Sag Harbor, N.Y., who is the publisher of East End Taste, an online magazine. She knew her husband’s salary and that he had investments with Morgan Stanley and TD Ameritrade, but “I don’t know the extent of what he has saved,” she said. “He handles the taxes. I have my accounts. I always told him I wanted my own financial stream of income, and I built my business.”

Her company was doing fine until the pandemic. Then in March all of her in-person events got canceled. Soon after, advertisers fled and revenue dropped 95 percent. In mid-April, her husband stepped in to help finance her company.

Toward the end May, she and her husband went through their accounts together. “He said, ‘I’m literally paying for you to work,” she said. “‘We’re paying to keep your business afloat.’ That hurt a lot, because it was true. I broke down. It got scary when I had nothing coming in.”

What panicked her most was when he showed her how their credit score was being affected, dropping from 800 to 650. “I never saw what our credit ratings were,” she said.

To bring in extra money, she began tutoring students six days a week, sometimes as much as eight hours a day. Her magazine is “very slowly” picking up financially, and she feels more comfortable knowing the true scope of her family’s finances. “Now I have a bit of a window open into what we have.”

As for Ms. Beier, the uncomfortable conversations with her husband brought “a really good clarity to our relationship,” she said. Granted, she wasn’t thrilled with all of the news — like discovering that he had a few credit cards and was about $30,000 in debt. This was especially alarming; she only uses a debit card.

But all of their talks, she said, “brought us to a new level. We didn’t realize how much pressure money has put on us. Covid gave us the ability to say, what do we really need and not need? It has been a blessing for us in disguise.”

Ms. Smith, the financial planner, takes it a step further. “This conversation isn’t a luxury,” she said. “It’s a necessity.”

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The financial planner Michelle Smith of Source Financial Advisors says that women should know the answers to these financial questions.

1. How are assets titled and what is, and isn’t, in joint accounts? This is especially important for access in case of prolonged illness or death.

2. Where are all the important documents? Do I have access and login information for all accounts, such as savings, investments, retirement, marital assets and trusts?

3. Do I have enough funds in my own name to get through six months of my family’s total overhead expenses, like housing, taxes and personal expenses?

4. Am I the owner or beneficiary of my husband’s life insurance policy? If the policy is owned by a trust, do I know who the trustees are or if I am a beneficiary of the trust?

5. What is my legal or emotional recourse if my husband refuses to share information? (The quick answer: no recourse, unless you file for divorce, which compels financial discovery.)

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Source: www.nytimes.com

Author: Abby Ellin


Investors Need A Purpose Too: The Newton Investment Management Purpose Statement

Investors Need A Purpose Too: The Newton Investment Management Purpose Statement

“Our purpose at Newton is—and has been since our founding in 1978—to improve people’s lives through active, thematic and engaged investment which allows our clients to meet their objectives, and helps foster a healthy and vibrant world for all.” So begins the “Newton Investment Management—Purpose statement” which was ratified by Newton’s Board on September 7 and published on its UK website on September 11 and U.S website on September 15. While “purpose” is the new mantra in the corporate community, to varying degrees being urged on by the investment community, it is highly unusual to see an asset manager talking about its own purpose. This effort was led by Andrew Parry, Head of Sustainable Investment, under the leadership of Newton CEO Hanneke Smits.

Newton Investment Management Logo

It may seem surprising that a firm of Newton’s size should be at the forefront of its industry’s initiatives to frame purpose. After all, there are much bigger names in the asset management world. Compared to the likes of the four largest asset managers – BlackRock ($6.2 trillion in AUM), Vanguard ($5.0 trillion), State Street Global Advisors (SSGA, $2.6 trillion), and Fidelity ($2.5 trillion), Newton, with its $57 billion in AUM, is a boutique firm. But it is one of the eight asset managers that comprise BNY Mellon Investment Management, which ranks fifth after Fidelity with $2.0 trillion in AUM and is worth noting in that regard. It is also worth noting that it has been very responsive to a letter from asset owners to asset managers I have written about previously.

The opening sentence of Newton’s statement is followed by four pages which took months of writing and rewriting and internal consultation at all levels of the organization. When asked why Newton decided to take such a bold step, Parry explained:

“Behind the statement is a recognition by Newton that all companies are de facto social enterprises operating ultimately within environmental and social boundaries. Providing financial security for clients depends on effectively managing the potential tension between financial returns and social consequences and environmental impacts. Done well, it can help to “bring about a better world – by allocating capital to where it can be productively used for the benefit of all stakeholders.” Creating the statement was no trivial exercise, taking several months of reflection, debate, and explanation to ensure that it was not perceived as a marketing document. For the board, it was important to be able to tie Newton’s purpose to its action.” 

Andrew Parry, Head of Sustainable Investment, Newton Investment Management

Dealing with environmental and social issues requires active engagement with portfolio companies. As one of Newton’s research analysts put it: “Engagement is a vital part of leading by example and build strong relationships with companies.” Divestment alone will not solve these problems. Companies’ behavior needs to change. Newton seeks to do this through the integration of environmental, social, and governance (ESG) issues in security analysis and selection across all asset classes. It also engages in constructive dialogue with portfolio companies and regulators, supports its convictions in how it votes on shareholder resolutions, and collaborates with other investors and stakeholders to address system-level issues. Examples of the latter where Newton has an active role are the UN PRI, the International Corporate Governance Network, ShareAction’s Workforce Disclosure Initiative, the Transition Pathway Initiative, The Institutional Investors Group on Climate Change, and the Investment Association’s Stewardship Working Group.  

Every industry depends on a social license to operate. “Earning trust—from our clients, our employees, and other stakeholders—is the cornerstone of our success.” In the investment management industry this trust is earned through transparent reporting of investment returns, fees, and charges; the environmental and social footprint of their portfolios; and information about and explanations of its voting and engagement activities.

Investment management is fundamentally a people business, and Newton is committed to promoting diversity in its people as well as in its thinking. By being inclusive and advancing equality of opportunities, it believes it is not just a better employer but also, crucially, better equipped to make well-informed decisions. It has created a variety of flexible working arrangements to meet the requirements of a diverse workforce in a changing world, and it participates in a range of schemes to increase the diversity of its workforce, including vocational training, return-to-work and returning-military programs.

Finally, Newton explains how it will hold itself to account for ensuring that its purpose statement is put into practice. Ultimately this rests with its Board—and note again that this statement has been formally endorsed by the Board. There are committees to supervise the firm’s periodic materiality analysis of financial, environmental, and social measures. For example, its climate disclosures are in line with the recommendations of the Task Force on Climate-related Financial Disclosures. The Board as a whole ensures that executive compensation is linked to this stated purpose of achieving “commercial objectives in a responsible and sustainable manner.”

Newton’s statement of purpose concludes with, “In seeking to fulfil our purpose of delivering attractive returns to our clients and fostering a healthy and vibrant world for all, we hold companies accountable not only for the financial returns they deliver, but also for their wider impact on society and the environment. We hold ourselves to the same standards we expect of those companies.” More colloquially, they are practicing for themselves what they are preaching about to their portfolio companies.

All other asset managers should follow Newton’s example. This is especially true of those that have been most vocal about the importance of corporate purpose. This starts with publishing their own board-endorsed “Statement of Purpose.” They can then credibly ask for a company-specific, stakeholder inclusive “Statement of Purpose” signed by every member of the board. A good place for them to start is with the signatories to the Business Roundtable’s “Statement of the Purpose of a Corporation” since not a single one of them has done so. More generally, the world’s largest asset managers are well-positioned to help accelerate the translation of purpose words into enacting purpose actions. The Enacting Purpose Initiative, which I have written about previously, can provide some useful guidance.

Hanneke Smits, Chief Executive Officer, Newton Investment Management

On October 1, 2020 Smits becomes CEO of BNY Mellon Investment Management. In doing so, she will join a select list of women running the largest asset management organizations in the world. When asked about her plans as she takes on this much larger role, Smits replied:

“I am delighted that Newton has published its corporate purpose statement. Among investment managers, we are not unique in having formulated such a statement, but we are among a small number of early adopters. Our statement sets out our purpose in clear terms – not just the key role we perform in helping our clients address their challenges and meet their investment objectives, but also our part as active investors in helping to foster a better world for all.

To be meaningful, purpose cannot be something merely verbalized in a document. It needs to be an ever-present organizing principle that drives all of our decision-making and activity, and underpins our culture and conduct. At Newton and BNY Mellon, we are committed to ensuring that what we say is matched by what we do.”

I applaud what Newton has done and I encourage every other asset manager to do the same. I also encourage all asset managers to request a “Statement of Purpose” from every one of their portfolio companies.

Source: www.forbes.com

Author: Bob Eccles


Chewy Stock Is a Must-Buy Name on the Latest Dip

Chewy Stock Is a Must-Buy Name on the Latest Dip

The e-commerce space is booming and while Chewy (NYSE:CHWY) had been performing well, shares are under pressure now. On Sept. 2, Chewy stock hit a high of $74.84. Seven trading sessions later, on Sept. 14, and the stock was down 29.2% after closing at $53. 

Image of a Chewy (CHWY) branded delivery box in the middle of a well-lit living room.

In my view, that dip represents a buying opportunity. The novel coronavirus is pushing sales toward online platforms, a shift that has benefited e-commerce, digital entertainment players, cybersecurity firms and cloud computing companies. 

I don’t think these shifts will be temporary or “revert back to the mean” whenever the coronavirus fades from our society. Obviously some of the growth will slow because we’ve witnessed such a fascinating pull-forward of various technologies. But in many instances, we are not going back to the old ways. 

In the case of e-commerce, Covid-19 is likely only cementing its place among retail. For Chewy, that’s great news. From CEO Sumit Singh in the recent earnings press release:

As e-commerce undergoes meaningful changes, multi-year growth curves have been compressed into timeframes measured in quarters, if not months. Over the past few years, we have invested in technology, new businesses, fulfillment capacity, and in building an extraordinary team. This has prepared us to quickly adapt to the acceleration of our own growth curve.

Leading up to earnings on Sept. 10, shares of Chewy stock fell 20% from the recent high five days prior. For some long-term investors, perhaps that was enough of a correction to dip their toe in. 

The headline results from the second quarter were solid, with Chewy beating on top- and bottom-line expectations. 

A loss of 8 cents per share beat expectations by 8 cents, while revenue of $1.7 billion grew more than 47% year-over-year and topped estimates by $62 million. Adjusted EBITDA came in at $15.5 million. That’s up 153% year-over-year and well ahead of estimates looking for a loss of $16.1 million. 

For the full year, management expects revenue of $6.775 billion to $6.825 billion. That’s up from its prior outlook of $6.55 billion to $6.65 billion and ahead of consensus estimates which were at the top of that range, at $6.65 billion. 

Gross and net margins were up, active customers climbed to 16.6 million (up 38% year-over-year from 12 million), and net sales per active customer were up slightly when adjusting for an extra week in 2018. 

The bottom line: I see a top and bottom line beat, solid customer retention, strong guidance and improving margins. The price action following earnings is just noise. We’re looking sustainable trends and it looks like we have one with Chewy. 

Chewy stock is caught in between two major secular trends: E-commerce and pet spending. 

The graph above highlights one of those trends, as pet spending has grown steadily over the years. As our animals become more closely referred to as “family” rather than just pets, spending is bound to go up. 

Combine the situation with Covid-19 and perhaps even more Americans are feeling the itch to get a new furry family member. Of course, the coronavirus has been an accelerant on the other trend, which is e-commerce. 

With more people working from home and less people going to the store, this has accelerated the already-strong trend of online shopping. Just check out the graphic below, which highlights just how steady e-commerce sales as a percentage of retail sales has grown. 

Only in this case, notice the recessions that are highlighted in gray. E-commerce stalled but didn’t crater. In the 2020 recession, e-commerce sales ballooned. 

While there will be bumps along the way — as there always is in the stock market — it’s hard to fight a secular trend. That’s particularly true when there are two secular trends in play at once. 

This, combined with the most recent quarterly update from management, is why Chewy stock is one to buy the dip. It helps that there have been rumors about a potential strategic partnership, but really, it doesn’t matter. That would be a positive, but not necessary for success.

As of now, consensus expectations call for 40% growth in revenue this year and almost 23% growth in fiscal 2022 (next year). To be honest, I wouldn’t be surprised if this is too conservative. On the earnings front, estimates call for 30% growth this year and an acceleration to 60% growth next year.

It’s just too hard to bet against the long-term trends with this one.

On the date of publication, Matt McCall did not have (either directly or indirectly) any positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article had a long position in CHWY.

Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now. As of this writing, Matt did not hold a position in any of the aforementioned securities.

Source: investorplace.com

Author: By

Matt McCall and the InvestorPlace Research Staff, Editor, MoneyWire


60% of Black households report 'serious financial problems' due to virus: study

60% of Black households report ‘serious financial problems’ due to virus: study

Minority households are bearing an unequal portion of the burden of the economic fallout from the COVID-19 pandemic in America. 

A new survey from the Robert Wood Johnson Foundation and Harvard’s T.H. Chan School of Public Health explores COVID-19’s impact on families’ finances and their ability to maintain not just their profit margins, but the infrastructure of their daily lives.

Dr. Robert Blendon, professor of Public Health and Political Analysis at the Harvard T.H. Chan School of Public Health, compared the experience to being caught in a hurricane: “(If) your house didn’t have a strong foundation to begin with. And now the roof is collapsing. And there’s not enough cushion being provided. Now you’re in much greater trouble.”

The study found that 72 percent of Latino households, 60 percent of Black households and 55 percent of Native American hosehoulds are suffering “serious financial problems” in the midst of and directly due to the COVID-19 outbreak. 

The crisis has disproportionately affected minority communities, accounting for more than 36% of deaths from the coronavirus. 

Of those younger than 18 years old killed by COVID-19, more than 75% are Hispanic, Black and American Indian children, even though they represent 41% of the U.S. population. 

“The magnitude of the impact is stunning,” Dr. Richard Besser, president and CEO of the Robert Wood Johnson Foundation, told ABC News. “In pre-COVID America, millions of people were living paycheck to paycheck. But that living on the edge is not spread evenly across the nation. These issues intersect; they’re not separate.”

ABC News conducted a study in New York City, Los Angeles, Chicago and Houston and found that at least half of all households reported financial strain during the pandemic. However, the impact has been shown to still be disproportionately affecting Black and Latino households and all households with incomes under $100,000. 

“We hear those PSAs that say we’re all in this together,” said Dr. Blendon. “It turns out, that’s not correct: What we see in the survey is if you earn less, every increment down, you have more troubles. And if you’re Latino or Black, your problems are dramatically more serious.”

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Source: thegrio.com

Author: Biba Adams


Mining Stock Could See Big Returns Next Month - Schaeffer's Investment Research

Mining Stock Could See Big Returns Next Month – Schaeffer’s Investment Research

The shares of mining name Sibanye Stillwater Ltd (NYSE:SBSW) have taken a step back this week, pulling away from last Thursday’s all-time high of $13.89. While the equity is heading for its biggest weekly loss since March — off 7.6% so far — there is evidence that this pullback could be short lived, making now an opportune time to get in on the stock before another potential bounce. 

Though SBSW just breached recent support at its 20-day moving average, another recently supportive trendline at the historically bullish 40-day moving average still sits just below. According to Schaeffer’s Senior Quantitative Analyst Rocky White, there have been five similar pullbacks over the past three years. The security saw positive one-month returns after these signals 75% of the time, averaging a 9.1% pop. A similar move, from the stock’s current perch would place it at $15.15, marking a fresh high on the charts. 

SBSW Chart sept 17

The sentiment surrounding SBSW is quite optimistic at the moment. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity sports a 10-day call/put volume of 45.19, which stands higher than 86% of all readings from the past year. Plus, all three analysts in coverage consider the security to be a “buy” or better. 

Now looks like a good time to get in on SBSW’s next move with options, too. The equity’s Schaeffer’s Volatility Scorecard (SVS) stands at 89 out of 100. This means the security has tended to exceed volatility expectations during the past year — a boon for option buyers. 

Source: www.schaeffersresearch.com

Author: Lillian Currens


Northeastern Eases Financial Sanctions On Students Dismissed For Partying

Northeastern Eases Financial Sanctions On Students Dismissed For Partying

Meredith Nierman / WGBH News

Northeastern University says it’s still suspending a group of first-year students for violating the school’s strict social distancing policies, but administrators have decided to credit their tuition bills.

Earlier this month, Northeastern kicked out 11 first-year students caught hanging out — without masks — in a downtown Westin hotel room, where they were living to help de-densify the Roxbury campus and slow the spread of COVID-19.

At first, Northeastern said they would not get any refunds for money they had already paid.

All of the students appealed their suspensions to a conduct appeals board, which upheld them. But after some of the students hired lawyers, Northeastern decided to ease the sanctions and to credit their fall tuition — totaling more than $27,760 dollars — toward the spring semester. For now, they won’t receive refunds or credit for room and board or other fees.

In a statement, Northeastern says while the students are still suspended, they’ll have access to academic advising, mental health and other support services.

The student conduct case has drawn national attention and headlines as colleges across the country struggle to slow the spread of COVID and continue to offer in-person, residential education.

Compared to other Boston-area colleges, Northeastern has been more strict in enforcing its social distance policies. In August, administrators threatened to rescind admissions of more than 100 students who had responded “yes” to a survey posted on Instagram asking them whether planned to party on campus.

Source: www.wgbh.org

Author: By
Kirk Carapezza


How Covid Has Altered the Conversation About Money


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