March 2023 | Vibrance Wealth Management

March 2023

Retirement plan participants sometimes debate whether to contribute to a traditional 401(k) Plan or Roth 401(k) Plan. At Vibrance Wealth Management, we generally recommend to save income tax now and invest the savings accordingly by contributing to a traditional 401(k) plan especially if you are a high income earner. Unless you are pretty certain that your income is going to be much higher later or have a legacy plan, then contributing to the Roth 401(k) plan now may make sense.

If you have similar income and bet on a higher tax rate in the future, we do not recommend contributing to a Roth 401(k) plan now. This is because we do not know for sure how the tax laws will change in the future.

Some may make a few assumptions and tend to overthink or overanalyze. We do not need to complicate our individual situations. We always encourage investors to do what we know and in our control. We can always make adjustments along the way. For example, there could be some situations when we know for sure that our income is lower such as between jobs or after your retirement but before taking required minimum distributions (RMDs), then you can consider doing Roth conversions to take advantage of a lower tax rate. If you are still not certain, consider splitting the contributions into both plans.

Full story: MarketWatch

Celebrating Women’s History Month in March! When it comes to investing, men and women invest differently. Research shows women tend to be risk averse whereas men are risk takers. Men are overconfident and trade actively while women focus on the big financial picture. Women perceive risks as losing money when men perceive risks as not making money. The differences in our decision making could be caused by our different biology and genes. Nonetheless, we do believe what we are told in our society and culture also create bias on how men and women believe how we should invest.

Despite the fact that women make less money than men and have higher expenses, we work with quite a lot of women who are investment savvy and confident in growing and managing their own and household wealth, especially those coming from other countries such as Asia. Those women are taught at home or in society that they need to be financially independent and successful.

We believe it takes education at home and our society to tell girls and women that we are equally capable of handling our personal finances and investments as boys and men. We need to change our belief that women lag behind or need more help. We believe that all the resources available provide both men and women equal opportunities to become financially successful.

Full story: Forbes

The recent AI craze, together with a sharp bounce in the stock market since the end of last year ignites again Fear of Missing Out (FOMO). It’s tempting to jump into a hype stock after watching it almost double in a couple months. Unfortunately, we forget how many investors lost most of their assets not long ago when chasing returns and having FOMO. FOMO is surely greed in disguise.

How to overcome FOMO? First, turn off the noise. Second, stick to your investment objectives and strategies. Third, remind yourself that you are a long-term investor, not a trader. Fourth, take your emotions out of the equation. It takes discipline and sometimes hard lessons to learn from them.

Full story: Financial Times

Before you invest in cryptocurrency, you can check out Crypto Scam Tracker launched by the California Department of Financial Protection and Innovation. The Tracker is a searchable collection of the complaints the agency has collected about crypto offers that now seem too good to be true. The complaints have been reviewed by the agency but not verified. Yet, it is a great due diligence tool investors can use for now before more regulations are in place.