ETF Trends
ETF Trends

One of my personal goals for my circle of friends and colleagues is to take investing and financial questions out of the whisper zone. The only way we are going to educate ourselves is by bringing the conversation out into the open. Having the “how am I going to pay for my kids’ college?” question spinning over and over in your head gets you nowhere; sharing ideas and listening to the experiences of others is better for all of us in the long run.

One of the ways to get started is by being active participants in holiday party conversations. You know what I’m referring to – the types of gatherings where one guy endlessly spouts some kind of financial industry jargon, whether he knows anything about the subject matter or not. This year, I’m using The BlackRock List as my fodder for the season’s inevitable social situations. The List breaks down the things you need to know to be a savvy investor and offers five action steps for 2015. Based on this wisdom, here are five conversation starters to keep in your back pocket:

  1. “What’s all the fuss about the central banks?” While the U.S. begins to roll back its “easy money” policy, Europe and Japan are working to stimulate their economies. This means that demand for U.S. bonds should increase and higher rates in the U.S. bode well for a stronger dollar.
  2. “Boy, nothing but noise about when the Fed will raise interest rates. What does that mean for you and me?” There’s a lot of speculation about when the Fed will make its move, but tune out the noise. We think rates will stay low for some time to come, so stay diversified and beware of shorter-maturity bonds.
  3. “So thrilled that the U.S. economy is the top global performer. How are you going to leverage this good news?” We think the U.S. economy will continue to grow in 2015, which is good news for stocks. Now is the time to consider investing for long-term growth – and look for bargains outside the U.S., too.
  4. “Inflation isn’t keeping me up at night – for now. How are you going to prepare?” Low inflation is good for businesses and thus good for stocks.
  5. “Hello again volatility. Looks like we’re heading into a more normal bumpy ride with stocks. How are you planning to keep your eyes on the long term goal, paying no heed to ups and downs?” This can be tricky, as headlines have a tendency to derail even the savviest of investors. Just remember – while volatility means the market will dip, it will also go up. As I’ve talked about before, take advantage of market dips by pulling cash off the sidelines and buying in, and stick to your long-term goals.

Do you talk about your investments when you’re among friends and colleagues? Why or why not? Share your stories with us.

 

Heather Pelant is BlackRock Personal Investor Strategist. She is a regular contributor to The Blog and you can find more of her posts here.