WIB-Seattle: Explore the Science of Investment–Taking Control of Your Financial Future

On May 1, 2024, about 23 people met at NanoString to hear more about common investing myths and strategies that have proven successful for long-term investing. The aim was to empower women in STEM to handle their finances and take control of their investing strategies. Speaker Kristin Niedermeyer cleared up the myths of investing and academic investing principles and provided guidance on formulating a financial planning mindset. She expounded on stock picking, track-record investing, market timing, and the costs of investing. Kristin then explained the academic ways of investing, which covered the Matson method, the efficient market hypothesis, the modern portfolio theory, and the three-factor model. Kristin explained that the biggest misconception about investing is that you have to take on more risk to get higher returns on your investments. She said that prudent diversification of the asset classes that are included in your portfolio is a way to manage risk while maximizing market returns. After the presentation, Kristin and our moderator, Mie Field, answered questions from our attendees.

Key takeaways from the event included the answer to Victoria Chinnell's question: "Small biotech companies tend to be volatile, so when restricted stock units (RSUs) are granted as part of an employee's compensation, how much do you recommend that we keep invested?" Kristin's answer was to treat RSUs like cash income. Once the RSUs have vested, it's as if the company has handed you the value of the RSUs in cash. So if those RSUs were valued at $10,000, Kristin said the best thing to do is to ask yourself, "Would I take this $10,000 and invest it into a single stock?" Most people answer, "No, I want to diversify." In many cases, Kristin said that she sees her clients who are biotech employees sell their RSUs as soon as they vest and put that amount towards a diversified portfolio.

What resonated the most with the attendees was that while they don't need to be experts and understand the complex assessments that are made when it comes to building a diverse portfolio, they do need to identify their own risk tolerance and mindset toward investing. These factors will shape their confidence in their investing strategy and who they are working with to ensure that they reach their financial goals.

Submitted by Mariana Huben