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	🤲 Do bonds still serve a purpose? Clean up your portfolio Finny: The Gist Feb 25 Hope you all are having a great week! We hope these money topics come in handy as you navigate these crazy times and clownish markets:  Do bonds still serve a purpose? Bonds vs. stocks in simple terms. Have you fixed your 401K or IRA yet? Presented by blooom. Clean up your online spending. Money-saving tips and tools.  Meme stock mania. Should you consider joining? To ensure you are getting The Gist every Tuesday and Thursday, please move it to your primary folder (Gmail), or add it to your VIP (Apple Mail) or favorites (Outlook)! INVESTING Do bonds still serve a purpose? PBS Digital Studios The market has been enjoyable since bottoming last March, but let's be real. There is always going to be a tug-of-war between good and bad news as long as COVID is a thing.  Overvalued stocks and complacency is always a risk for this bull market too. However, there's another significant risk that's been crushing high growth tech stocks in these last two weeks—rising bond yields.  So, what does this mean for your investments?  Let's break it down for you Rising bond yields are a blessing and a curse. On the one hand, it shows we're getting back to normal. It also shows that there is pent-up consumer spending.  On the other hand, if the Fed keeps interest rates this low while bond yields keep rising, you can welcome back inflation. It also means that tech stocks that have boomed, thanks to cheap borrowing rates, will be tested. Hence the Nasdaq's 4.5% decline since February 12.  So do bonds still add value to your portfolio anymore? The short answer is: yes. Bonds add stability and diversification to your portfolio, especially if you have different types with multiple maturities, as they can generate strong, consistent, and most importantly, predictable profits. You can even calculate these potential gains years in advance too.  And are bonds still uncorrelated to stocks? The short answer is yes, although there are short periods in history when the returns of the two asset classes moved in the same direction (e.g., March of 2020).  Most recently, rising yields have made high-tech stocks look relatively less attractive. But if you look going back a little more than two years, you can see that the Nasdaq index has really taken off as bond yields have fallen. But buyer beware By the time bond yields crossed 3% in September of 2018, high-flying tech stocks finally took their cue and sold off, sharply. For those who were invested, the final quarter of 2018 was not easy to stomach. We’re not saying this is for certain to happen again as bond yields rise, but it is something to be hyper-aware of and to watch closely. Wall Street says that bond markets are smarter than stock markets when it comes to forecasting. You may want to take heed.  If you are new to investing and or need a crash course on bond basics, take this 6-minute quiz-based lesson: PRESENTED BY BLOOOM Have you fixed your 401K or IRA yet? Simply saving for retirement is a great first step. However, beyond that, it can get confusing real fast.  Should I roll over my 401k? Which funds are the best for me? How many funds should I have? Am I paying too much for my funds? Sound familiar? If you can understand these three things about your retirement investment strategy, you will be well on your way to saving smarter. 1️⃣ Fees. Fees can significantly eat into your retirement savings. Administrative fees, internal fund expenses and management fees are important to understand but can be hard to decode. 2️⃣ Time Horizon. Create a strategy based on your retirement goals, not on the market. Plan to make adjustments as you get closer to your goal. 3️⃣ Risk Tolerance. It tells you how much of a loss you're prepared to handle within your portfolio.  Some people are naturally more comfortable with risk-taking than others, so a retirement portfolio should reflect that. Great news: Blooom's tool can help you understand these investing basics. Blooom is an online financial advisor, offering tools to help you optimize and manage your retirement accounts for the fraction of the price of a traditional advisor.  The company was started several years ago with the sole purpose of bringing badly needed financial advice and management to the massive number of American retirement savers that have been left behind by Wall Street and largely forced to go it alone when it comes to their retirement savings. And you can start for free or hire them to manage your account.  Take back control of your hard-earned dollars.  And get $20 off if you sign up for blooom's paid service. Use promo code FINNNY (yes, that's 3 Ns!). 💸 MONEY SAVING TIPS Clean up your online spending From hidden subscriptions to shopping online, you're probably spending way more than you realize. Since we pretty much haven't left our homes for the better part of the year, this has only likely gotten worse. Without physical bills or regular reminders, it's easy to forget about what we're spending and how.   This excellent article from the Washington Post makes 4 great suggestions on how you can clean up your online spending and be more mindful of your budget.  Schedule a subscription intervention Go through your credit card bill, and see who is charging you.  Go to your app store settings and make sure you monitor what you've signed up for or if there's a free trial about to end.    Keep a list or spreadsheet for your subscriptions. Sometimes these recurring payments are monthly; other times, they can be annual. Yes, those $5 or $10 charges may seem small. But do you know how many of these subscription services are you using? Streaming apps alone can come out at around $900 a year or $80 a month. Tooltip 💡 — if you prefer to automate the tracking of your subscriptions and expenses, consider a budgeting tool like Tiller Money (for google sheets geeks) or YNAB (user-friendly). Share, negotiate or take a break from accounts A surprising amount of payments, such as cable, car insurance, credit card interest rates, and cellphone service fees are negotiable. Sometimes you can lower these fees with a simple phone call or threaten to switch to another company. Tooltip 💡 — if you don't want to do this yourself across a dozen or more services, an example of a super easy tool for this is Truebill—they will negotiate most bills on your behalf and take a cut of the savings they find and negotiate for you. Sharing your subscriptions or pausing your accounts if you're on the fence can also be a great way to bring your expenses down.  Comparison-shop on delivery apps Before shopping for groceries or ordering delivery, compare prices between different apps, compare the delivery fees, and other service fees.  But if possible, just order from the restaurant or grocery store directly. They'll get a larger share of the profits instead of a crushing third-party fee.  Bring your cloud storage bills down to earth Figure out how much storage you actually need, audit your Amazon, Google, Apple, Dropbox, and Microsoft storage, and cut your costs. You're probably paying so much more than you actually realize because you likely signed up for multiple services when you ran out of space. QUICK TAKE Meme stock mania "Roaring Kitty" who recently doubled down on his Gamestop ($GME) bet If you think skydiving is fun, try fighting the suits on Wall Street and winning. That meme stock short squeeze last month was a revolution, thanks to an army of retail traders beating hedge funds at their own game. But it's back, as we've seen $GME stock price practically quadruple over the last couple of days.  So, where do we go from here? Well, nobody can predict the future. But the suits and the SEC are undoubtedly on notice. And there are no signs this is going away anytime soon. Should you consider joining? Only you can answer this question. But remember, herd mentality can be a very, very dangerous thing when investing. If you believe in the vision of WallStreetBets and the Reddit way of trading, then good luck to you.  Our take. It's always best to do your own research and due diligence on specific stocks and fundamentals rather than following a crowd.  Leverage Finnyvest to get an unbiased pros & cons analysis of your prospective investments.  Rule of thumb for the long-term? It's probably better to use Warren Buffet as a guide than Roaring Kitty. Even if Roaring Kitty is the flavor of the month. TRENDING ON FINNY AND BEYOND Will remote workers and telecommuters will be stuck with double taxation? (Bloomberg)  Stock and ETF bull- and bear-cases analyses and comparisons by Finnyvest: 3 more days to get 20% off the regular price (Finnyvest) Finny lesson of the day. Learn or brush up on what inflation means and why it matters.  How did you like Finny's The Gist today? (Click to vote) 👍 That was interesting, thanks. 😐 Meh - was ok. 👎 Not interesting to me. That’s it for today. If you’ve enjoyed today’s edition, please invite your friends to join Finny. Have a great rest of the week! The Finny Team Finny is a personal finance education start-up offering free game-based personalized financial education, a supportive discussion forum, and simple stock and fund tools (aka Finnyvest).  Our mission is to make learning about all things money fun and easy!  The Gist is Finny's newsletter to our community members who are looking to save and make more money, protect their finances, and be their own bosses! It's sent twice a week (Tues/Thurs).  The editorial team for this edition comprises Matthew Levy, CFA and Chihee Kim. Sponsors are mission-aligned partners that offer unique and valuable services at little to no cost for our users. We only feature those partners we love using ourselves.  And we're thankful for their sponsorship to enable Finny to operate! Here's our advertiser disclosure.  If you have any feedback for us, please send us an email to feedback@askfinny.com. If you liked this post from Finny: The Gist, why not share it? Share © 2021 FinnyNL Unsubscribe 548 Market Street PMB 72296, San Francisco, CA 94104