Catalysts explained
Q: What are company “catalysts” that some investing articles refer to? — F.S., Summit Township, Michigan
A: They’re events or developments that can give a stock’s value a big push — up or down. Even the expectation of a catalyst can affect a stock. Examples of catalysts include a surprisingly good (or bad) earnings report, a company’s entry into a big new market, new regulations that help (or hurt) business, the approval (or rejection) of a company’s new drug, the launch of a promising new product, an acquisition of another company, a legal victory or a housing boom.
Investors will often buy into a company based on expectations of one or more catalysts. For example, a company may be expected to open locations in China soon, or perhaps a restaurant chain will soon start serving breakfasts as well as lunch and dinner. It can be helpful when evaluating a company to learn about any catalysts that could eventually make shares surge.
Q: Are there any lists of the companies that best serve all their stakeholders, such as employees and investors? — R.N., Lewiston, Maine
A: The “Forbes Just 100,” compiled annually with partner JUST Capital, polls thousands of people and ranks more than 900 major companies on how well they serve five groups of stakeholders: employees, communities, customers, shareholders and the environment. The top 12 companies in the 2021 list are: Microsoft, Nvidia, Apple, Intel, Alphabet, JPMorgan Chase, Salesforce. com, AT&T, Cisco Systems, Adobe, International Business Machines (IBM) and Bank of America. The top 100 in the list were found to have an average of 56% higher total shareholder return over the past five years, use 123% more green energy, and pay their median workers 18% more, among other things.
You may need professional advice
According to the 2021 Retirement Confidence Survey, only 29% of respondents felt “very confident” that they would have enough money on which to live comfortably throughout their retirement. That’s troubling.
Many of those folks would do well to consult a financial professional for help with saving, investing and planning for their retirement.
There are important financial issues to consider and deal with throughout our lives, especially around key life events, such as marriages, divorces, purchases of homes, the birth of children, paying for college, the death of parents, and so on. A good adviser can help you prepare for or deal with such events in ways that can minimize headaches and save you money. They can also help you save and invest effectively for retirement, deal with retirement accounts when you change jobs, avoid or minimize estate taxes, advise you on insurance you may need and maximize your ability to care for those who depend on you, such as children or elderly parents.
See? That’s a lot to deal with, and most of us don’t know enough to make smart decisions about all those issues. There’s no shame in seeking professional help from a good adviser. You don’t want to fork over a meaningful percentage of your assets for guidance, but if you’re charged a flat fee of several hundred dollars (or more), there’s a good chance the cost will be more than offset by the savings.
We favor fee-only advisers, as opposed to those who collect commissions for selling you financial products. You can find a fee-only personal financial adviser near you at NAPFA.org or a certified financial planner near you at LetsMakeAPlan.org. At sites such as SEC.gov/check-your-investment-professional and CFP. net/verify-a-cfp-professional, you can check many advisers’ records, verifying credentials and looking for red flags such as disciplinary actions.