Weekly Buzz: This Valentine’s: Inflation running hot

💕 Have you had the “money talk” with your partner?

Talking about money can feel intimidating, but it can actually bring you closer to your partner. And, it’s a chance to learn about each other’s values and work together to reach your financial goals. The earlier you start, the more comfortable you'll get talking about money and the fewer surprises you'll face later on.

Here’s how you could approach it:

• Understand that everyone has different views on money
• Discuss and plan financial goals that you want to achieve
• Be open about your personal finances with your partner
• Have a regular money chat with your partner
• Empower each other to have the money talk

🔥 US inflation: Still hot this Valentine’s

Headline US consumer prices rose 0.5% month-on-month in January, in line with market expectations. This was its first pickup after two months of slowdowns, largely owing to increased energy and services prices. The year-on-year reading, meanwhile, inched down to 6.4% – still well above the Fed’s 2% target.

What does the inflation data mean?

On a positive note, the month-on-month data was in line with market expectations and the year-on-year reading did continue to slow from its mid-2022 peak. But the latest readings suggest that, despite the optimism over the past few months, inflation could be tougher to tame – in particular, we’ll need to see services costs move lower for inflation to come down more substantially towards the Fed’s target.

That’s because the key cost for the services sector is wages – and the still-strong US labour market could mean continued upward pressure. As a result, we could see the Fed raise interest rates higher than previously expected – and keep them there longer – in order to cool the jobs market and tame inflation.

🎓 Jargon buster: ETFs vs mutual funds

ETFs (exchange-traded funds) and mutual funds are both popular ways for investors to get diversified exposure to the markets.

What exactly are ETFs and mutual funds, and how do they differ?

ETFs and mutual funds are both made up of asset classes, such as stocks or bonds, that may be focused on a particular geography (eg. US or Asia) or sector (eg. healthcare or technology).

The difference is that ETFs generally track a market index, such as the S&P 500, and are traded publicly. On the other hand, mutual funds are actively managed by fund managers who focus on security selection.

Where possible, StashAway uses ETFs to build your portfolios

All the long-term investment solutions on our platforminvest solely into ETFs.

We like ETFs because:

• They’re a cost-effective way to get broad market exposure: the ETFs in our General Investing portfolios have an average expense ratio of around 0.2% p.a., while the management fee for actively-managed funds in Thailand can range from 1-3% p.a.
• ETFs are usually more liquid than mutual funds, because they’re traded on public markets. Mutual funds can only be bought and sold after the market closes each day.

📌 How to Spot Investment Scams and Fraud Attempts

Recognise the red flags behind an investment scam.