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Investing News Roundup: The IPO Market Heats Up

Also: Americans are confused about 2018 taxes and robo-advisor Personal Capital raises funding.
Feb. 11, 2019
401(k), Brokers, Investing, Investing Strategy, Retirement Planning
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Welcome to our investing news blog. Here we’ll bring you investing and retirement news from the past week or so. Bookmark this page to read the latest each week. You can also email us if you’d like to be notified when this page updates.

IPOs set to rebound after shutdown slowdown

January was the leanest month for U.S. initial public offerings in three years — and the 35-day federal government shutdown was largely to blame because the Securities and Exchange Commission is integral to this process. But the threat of another shutdown hasn’t deterred many companies from announcing IPOs recently. Postmates, a food delivery company, filed paperwork for an IPO this past week, while workplace messaging platform Slack is planning a direct listing similar to Spotify’s IPO. Other companies expected to go public this year include Uber, Lyft, Airbnb, Pinterest and Levi-Strauss. Buying shares of companies you use may seem like a no-brainer, but there are reasons to be cautious when investing in IPOs.

Ready or not, the tax man cometh

You have about two months until tax day. While you may be tempted to file an extension to get some more time, NerdWallet’s Andrea Coombes cautioned against doing so in a piece for MarketWatch. “Filing an extension sounds like a great way to push off the work until later in the year, but you do need to pay your bill, and that means basically doing your taxes,” she told the website. “It’s not an easy out.” Our annual tax study found that nearly half of Americans surveyed don’t understand how the 2017 Tax Cuts and Jobs Act affects their tax bracket.

» Confused about taxes? NerdWallet’s experts answer some of the most common questions

Robots have firm foothold in investing

During the Super Bowl, various ads depicted a not-so-distant future in which robots have a starring role. But robots already are here and flourishing, at least in investing. Robo-advisors, or automated portfolio management services, use computer algorithms to manage your money. Collectively, five companies (Vanguard, Schwab, Betterment, Wealthfront and Personal Capital) managed more than $150 billion in assets with their robo-advisory units in mid-2018, according to figures from Morningstar. And Personal Capital announced this past week it raised $50 million in funding that it said will help drive further growth and platform enhancements for its 2 million registered users. Intrigued? Check out our picks of the best robo-advisors.

Feb. 4, 2019 roundup:

Bear? Where?

January historically has been one of the strongest months for the U.S. stock market — and this year didn’t disappoint. The S&P 500 jumped 7.9%, for its strongest January since 1987. It didn’t crawl back entirely from December’s bruising 9.2% slump, but the S&P 500 is a more comfortable distance from a much-feared bear market now. That said, professional investors caution in our February stock market outlook that volatility — those wild daily swings that seem to be the norm lately — will likely continue.

You get free trades! You get free trades!

Paying commissions on stocks and exchange-traded fund trades is starting to feel passe, with a variety of brokers (including Vanguard, Robinhood, E-Trade, TD Ameritrade and Charles Schwab) offering commission-free trades to select customers. In late January, Merrill Edge announced plans to expand eligibility for commission-free online stock and ETF trades to all Bank of America Preferred Rewards members (customers with combined balances of $20,000 or more). This benefit was previously offered only to the highest-tier members and will take effect in the second quarter. If you’re still paying high commissions, check our picks for the best discount brokers.

How does your 401(k) stack up?

If saving more for retirement is on your 2019 to-do list, you’re probably not alone. NerdWallet’s Arielle O’Shea recently broke down the median and average 401(k) balances for employees of various age cohorts with plans held at Fidelity Investments — and 401(k) millionaire-wannabes may have some work to do. Of possible help? The IRS increased 401(k) contribution limits for 2019 — now $19,000 (up from $18,500), with an additional $6,000 catch-up for employees 50 and over. Separate figures from Fidelity showed that the average 401(k) balance fell 10% in the fourth quarter of 2018 amid all the market volatility, but that a majority of investors continued contributing to their accounts and didn’t make significant changes to their investments. Want to see how your savings add up over time? Consult our 401(k) calculator.

Remembering Vanguard’s vanguard

Even outside of investing, Warren Buffett is a household name. John “Jack” Bogle? Not so much. But tributes from the investment community poured in after Bogle, founder of Vanguard, died in mid-January. Bogle was the visionary behind index funds, which have made it easy for investors to diversify their portfolios on the cheap. As Buffett put it: “Jack did more for American investors as a whole than any individual I’ve known.” My colleagues and I also recalled some of our favorite Bogle investing wisdom and his enduring legacy.

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