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Vail Valley newlyweds need to align financial strategies

Charlie Wick, Tina DeWitt and Todd DeJong
Vail, CO, Colorado

June is one of the most popular months for weddings. This may be due, in part, to June being named for Juno, the Roman goddess of women and marriage.

Of course, Juno and her husband, Jupiter, probably had very little trouble with money, but if you are planning to marry, you and your spouse should work together on your finances ” which means, among other things, that you should reconcile your investment styles.

As you set up a household together and establish common long-term financial goals, you should make investing a priority. But you and your spouse may well have different attitudes about investing, and some of those differences may be due to your respective genders. A major, long-term study by researchers at the University of California found that women trade stocks less often than men, do more research before making an investment decision, and tend to stick with their investments longer.

The results? Women investors’ portfolios outperformed those of men by 1.4 percent a year, according to the study. So one might conclude that women’s “buy-and-hold” investing style can pay off in the long run.

While it may be useful for you and your spouse to keep these gender-based tendencies in mind, you must still work out some common ground as you create investment strategies to meet your objectives. The key is open and frequent communication. Talk to each other and learn what the other is thinking. Ask yourselves these types of questions:

Do we want to save for a house? If so, when do we want to buy it? If we have children, do we want to help them pay for college? Do we want to retire at about the same time? What does each of us want to do during retirement?

Once you’ve started talking about these and other issues, you’ll be able to start creating appropriate investment strategies. And after you begin investing, you may well find that you can discover ways to complement each other’s tendencies and preferences ” that is, your aggressive choices can balance your spouse’s conservative ones, or vice versa.

However, both you and your spouse still need to be aware of the potential dangers of staying too much in your comfort zone. If you are an aggressive investor, willing to take greater risks with your principal in exchange for potentially higher returns, you still could get burned by chasing after too many hot stocks, many of which will have already cooled by the time you invest and, in any case, may not be suitable for your needs.

On the other hand, if your spouse consistently favors more conservative investments such as bonds and certificates of deposit, he or she might not get the growth potential needed to help you achieve your joint goals. Furthermore, fixed-rate investments can incur inflation risk ” the risk that their returns may not keep up with the inflation rate.

As newlyweds, you and your spouse must learn to adapt to each other’s personal styles in many ways ” and it’s just as important to accommodate each other’s investment styles. It can take some work, but it’s well worth the effort.

Charlie Wick, Tina DeWitt and Todd DeJong are financial advisers with Edward Jones Investments. They can be reached in Eagle at 970-328-4959, in Edwards at 970-926-1728, and in Avon at 970-845-1025.


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