I was thrilled to hear of our Green Theme for the month of June.  Green brings to mind the following terms...SAVE energy, PROTECT the environment and PRESERVE the Earth.  In addition to these factors having a huge impact on reducing our carbon footprint on this planet, I realize that these same verbs are pertinent to the investment world.  People are more aware of the need to SAVE money, PROTECT against losses and PRESERVE the money they do have for the future.  The ever changing economy and world events have had a significant effect on the confidence level of investors and market movement.  The unemployment rates, interest rates and housing sales reports affect each of us in some manner.  So just how can you work towards not outliving your money? 

Let's look at each of the Green themed verbs to consider:

First, SAVE money - Keep a log of every penny you spend per day for a thirty day period.  Enter it in your handheld device or jot it in a small notebook you carry around.  It takes moments and most people learn a great deal about their spending habits through this simple exercise.  You will then realize where you can reduce your spending and increase your saving.  Don't stop there!  Look at your house bills as well; turn off lights when you leave a room, use energy efficient light bulbs to reduce electric bills, and take shorter showers to reduce your water bills.    Then there is retirement savings: Start small (let's say at 3% for a 401k contribution) and increase your 401k contributions quarterly by 1%. It is an amount that you may not even notice in your net pay.  But by the end of the year you have doubled your original contribution to 6%!  Congratulations! Remember; it is not what you make, it is what you keep!

Second, PROTECT against losses-- It is clear that emotion drives the stock market.  People get emotional and sell when bad news comes out and the prices decrease as the selling increases.  The market, just like retail and manufacturing, is based on supply and demand.  When good news comes out people buy, the prices go up, and the buying continues.  The demand is there for the stock so the price increases.  It is important that you work with a Financial Professional that can help you through understanding your goals and risk tolerance, which is basically, how much can you stand to lose.  Yes, everyone is willing to make plenty, but as far as losing money....most are not as flexible.  An asset allocation should be designed based on many factors and revisited to protect your savings for the future.  Your Financial Professional should have a compliance department directly within their operation that oversees the Professional and the client's needs and requests.  The compliance department is then visited by the SEC (Security Exchange Commission) regularly as well.  This protection to your investments is priceless.

Third, PRESERVE the money you do have for the future- Be sure you have a plan in place.  As your life changes--- births, graduations, marriages, and taking care of elders--- your plan should change.  Your investments will change as well.  That is, your cash needs may be greater at some times and savings may decrease for a while.  Your investments and allocations must reflect your changes and your needs.  Just as when the economy and market changes, you may need to adjust your investments as well.  In this way you will be much more likely to reach your goals by having a plan in place.

SAVE, PROTECT and PRESERVE...the Green themed verbs for investing.  After all....Green is the color of money!!!

By Barbara Case

Barbara Case is the Vice President of Investments at Moors & Cabot Investments in Boston. Honored as a South Shore Woman of the Month--- for always giving back--- Barbara is now giving advice to the SSW community in her new financial column.

Comments(1):

1. Green Money

   Congratulations Barbara Case, I found your article interesting. I look forward to your monthly column. Keep up the great work. KimBERLY, YWCA Marshfield Branch

   Tuesday, June 15, 2010 Kimberly