Gender Gap in Financial Know-How Leveling Off

Financial Finesse held a webinar on Friday previewing data that it will release later this week in a report on the gender gap in financial literacy.

“Over the last several years, the gap has been steadily increasing” although it’s beginning to level off, Diane Winland, the report’s primary author, said in the webinar.

“Women need to get ahead of men” in order to overcome barriers like longer lifespans and less time in the work force, Winland said. Women can live between five and 10 years longer than men, she said, and tend to make less over time. The National Commission on Pay Equity found women make about $11,000 less than men per year.

The gap is largest in debt and money management, Winland said. That’s surprising because women are frequently the money managers in their families, Winland said, referring to a Boston Consulting Group study that found in 73% of households, spending is controlled by women.

Financial Finesse found the smallest gap in long-term planning, and no gap in participation in employer-sponsored retirement plans. That parity in participation doesn’t translate to actual savings, though. Winland referred to data from the Employee Benefits Research Institute that found men have saved on average $114,000 in workplace retirement plans, compared with $56,000 for women.

“We need to do a better job of putting emphasis on women taking control of their finances,” Winland said in the webinar. Winland stressed that improving women’s financial habits isn’t the only goal; women need to have more confidence in their abilities and actions in order to see improvement.

Linda Robertson, a senior financial planner at Financial Finesse, pointed out that the gender gap narrowed with higher levels of income, especially between men and women in the $150,000-to-$200,000 income range. The reason why is a subject of further study, she said.

Winland referred to a study by Allianz that showed women have a “pervasive fear of being a bag lady. No matter what position we achieve, we still have that underlying fear.”

In some areas, Financial Finesse found, women are improving while men are actually pulling back. Women improved at fee analysis, rebalancing and allocating assets. “Women are better at following a plan,” Winland said, “while men tend to be more aggressive.”

The report found men are more likely to have an emergency cash fund, pay bills on time and manage their cash flow so they’re not spending more than they make. “In order to save for long-term [goals], we need to close the gap in money management,” Robertson said.

Men are also more likely to know whether they are on track for retirement, although less than a quarter of male respondents could answer positively. “The younger men and women are when they run estimates, the smaller steps they need to take to get on track,” Robertson added. Winland said that financial education should focus on empowering people. “The highly technical, narrowly focused lecture format of education may not be the best model,” Robertson agreed. The format suggested by Financial Finesse is life goal-based and holistic, and delivers information in a way that is engaging and encourages participation. The traditional model is “definitely not the best for women and maybe for all employees,” Winland said. “Women prefer a much more kinesthetic style.”

To design effective financial educational programs, Financial Finesse suggested using a holistic approach that ties together all the benefits an employer offers. They should also work to create “ah-ha” moments that women can relate to.

Another best practice is to “fold the financial piece into the wellness program so employees can see the connection between physical health and financial health,” Winland said.

Winland added that women respond well to coaching programs with multiple steps, like an online assessment followed by group workshops and a one-on-one coaching session or call.

“To close the gap, we have to make sure women are taking positive action,” Robertson concluded. She suggested making women active participants in their financial education and giving them concrete steps to take following educational sessions.

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Check out Women More Likely to Have High Financial Stress on AdvisorOne.

Garmin Launches Portable HUD - Analyst Blog

Worldwide provider of navigation, communications and information devices, Garmin Ltd. (GRMN) recently announced the launch of portable Head-Up Display (HUD) for smartphone navigation apps.

The HUD facilitates easy viewing of navigation information. It projects the information on a transparent film on the windshield or an attached reflector lens. The information is procured through a Bluetooth-enabled smartphone, which features the Garmin StreetPilot1 or NAVIGON app. The information is displayed within the line of sight of the driver in order to avoid distraction.

The comprehensible information includes details about traffic situations and interchanges. It features turn arrows, distance between turns current speed of the vehicle and speed limit. It also projects the estimated time of arrival. It also informs drivers about potential traffic delays and upcoming safety camera locations.

Garmin's HUD will pair wirelessly with Bluetooth-enabled iPhone, Android and Windows-based phones. Garmin StreetPilot and NAVIGON apps start at $29.99 for a regional map with turn-by-turn navigation. Garmin is selling the HUD for $129.99.

Garmin is well positioned in the personal navigation devices market, although competitive pressures have affected its business. Garmin has continued with product launches right through the year, including the fleet 590 and a portable fleet management GPS system. New products and the company's OEM approach will continue to expand margins for the company.

In the first quarter of fiscal 2013, Garmin reported revenues of $532.0 million, down 30.8% sequentially from the seasonally strong fourth quarter. Revenues declined 4.4% year over year, mainly due to continued declines in the PND market. Volumes dropped 50.0% sequentially and 7.4% from the year-ago quarter. The Auto/Mobile segment was down 42.2% sequentially and 9.6% from the year-ago quarter.

Currently, Garmin has a Zacks Rank #4 (Sell). Other stocks that have been performing well and are! worth considering include Yahoo Inc. (YHOO), Facebook Inc. (FB) and Akamai Tech (AKAM). Both Yahoo and Akamai carry a Zacks Rank #1 (Strong Buy) while Facebook carries a Zacks Rank #2 (Buy).

Ostrich Effect And Passive Investing

Of the different investment strategies and behaviors that an investor or fund manager can adopt, some notable ones include active investing, passive investing and the "ostrich effect."

Active investing involves constantly buying and selling securities to profit from short-term changes in the stock market. This strategy is often very beneficial when the market is doing particularly well. Passive investing is the opposite of active investing: it employs a buy-and-hold strategy to profit from long-term trends in the stock market and is used by investors who want to avoid risks. Both active and passive investors may exhibit the ostrich effect, or a tendency to ignore bad news in the market. There is a close relationship between passive investing and the ostrich effect, which we will explore here.

What Is Passive Investing?
Passive investing is a long-term strategy that involves restricted buying and selling of securities. A passive investor buys securities to hold long term, because he or she believes that stocks will rise in the long run.

An individual who invests passively does not seek to beat the market; he or she just wants to match the market's returns. To accomplish this, passive investors often invest in index funds and exchange traded funds (ETFs) that mirror market indices. This is why passive investing is sometimes referred to as index investing.

Advantages of Passive Investing
Some advantages of passive investing include the following:

Lower costs and higher profits: Investing in index funds usually incurs lower management fees, because a passively traded portfolio requires fewer resources and less time to manage than an actively traded portfolio. If an actively traded portfolio yields the same returns as a passively traded portfolio, the passive investor will receive a higher return, because when investors sell a security, the amount of profit they receive is equal to the sell price less the buy price, minus management fees and trading commissions. Automatic gains from market upswings: Since passive portfolios are constructed to closely follow the performance of market benchmarks like the S&P 500, the passive investor experiences gains when the market is in an upswing. Fewer bad management decisions: An actively traded portfolio relies on management to decide which securities to trade and when to do so, whereas a passively managed portfolio is designed to automatically track all the securities traded on a particular index. Thus, a passively managed portfolio reduces the risk that the investment will be affected by bad management decisions. Disadvantages of Passive Investing
Some disadvantages of passive investing include the following:

Automatic losses from market downswings: Since passive portfolios mirror the market, when the market experiences a downturn, the passive portfolio suffers, and the investor might experience losses if he or she chooses to sell during this time. Inability to beat market: A passive investor cannot outperform the market. If an investor believes that he or she can beat the market, then passive investing is not the right strategy. What Is the Ostrich Effect?
The ostrich effect is a term used in behavioral finance to describe the habit of some investors to pretend that bad news in the market doesn't exist. This behavior is named after the bird because investors who behave this way "bury their heads in the sand," or ignore bad news in the market. This behavior is often displayed by investors who are risk averse.

Advantages of the Ostrich Effect
The advantages of the ostrich effect can be both emotional and financial.

Emotional benefit: The psychological impact of bad news is limited or almost nonexistent. Advantages from market cycles: The market operates on a cyclical basis: it goes up and down frequently, and the only uncertainty is the duration of each phase. If investors sell their securities whenever they hear bad news, they could sustain unnecessary losses as well as miss out on great returns when the news turns good. Investors who ignore bad news are still in the market when returns improve, putting them in the right place at the right time. Disadvantages of the Ostrich Effect
The ostrich effect has two disadvantages:

Ignorance leads to major losses: If market bad news is a warning that a particular investment is unlikely to rebound, ignoring the situation can lead to major losses for the investor. Increased potential for missing good investment opportunities: Burying your head in the sand when it comes to bad news in the marketplace means that if a great investment opportunity arises or results from the bad news, that chance is lost. Passive Investing Versus the Ostrich Effect
It is important to know the relationship between passive investing and the ostrich effect, so that you are aware of the investment behavior you are engaged in and the effect it can have on your assets.

Passive investing and the ostrich effect are similar in that investors engage in both because they are risk-averse and want to avoid losing money. However, a passive investor does not ignore news about the market, good or bad. A passive investor is willing to trade potentially higher returns for the relative safety of going along with the market.

On the other hand, an investor who exhibits the ostrich effect ignores bad news about the market and pretends it does not exist. The ostrich effect is not limited to just one investing style - an active investor can also behave like an ostrich when there is bad news about the market.

Regardless of the investment strategy you choose to adopt, being knowledgeable about events in the market, both good and bad, can mean the difference between a gain and a loss. Choosing to invest in market securities and then deciding not to pay attention to the market on a bad day is a surefire way to lose money.

The Bottom Line
As an investor, it is very important that you be aware of news from the market and how it might affect your investments. Ignoring any news, especially bad news, can lead to poor investment decision-making and major losses.

Don't Get Too Worked Up Over Central Garden & Pet's Earnings

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Central Garden & Pet (Nasdaq: CENT  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Central Garden & Pet burned $18.3 million cash while it booked net income of $19.6 million. That means it burned through all its revenue and more. That doesn't sound so great. FCF is less than net income. Ideally, we'd like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Central Garden & Pet look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 91.1% of operating cash flow coming from questionable sources, Central Garden & Pet investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 47.2% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

Selling to fickle consumers is a tough business for Central Garden & Pet or anyone else in the space. But some companies are better equipped to face the future than others. In a new report, we'll give you the rundown on three companies that are setting themselves up to dominate retail. Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add Central Garden & Pet to My Watchlist.

The Surprising Link Between ADHD and Obesity

A new long-term study of men with attention-deficit/hyperactivity disorder, or ADHD, has linked the disorder with an increased likelihood of becoming obese in adulthood.

The study tracked men with ADHD for more than 30 years and found that a whopping 41% of them were obese compared to 22% of patients in a matched control group who didn't have ADHD. The control group pretty accurately matches the general population, arguing there's something special about the high rate of obesity in men with ADHD.

The obvious explanation is that patients with ADHD have a hard time with impulse control. If you can't resist being the class clown, it's hard to resist eating that extra cookie.

Interestingly adults that had controlled their ADHD symptoms as an adult seemed to have a higher rate of obesity than those that continued to have symptoms. The results could simply be because the study was small -- there were only 111 in the ADHD group -- or it's possible those that have controlled their symptoms have developed a coping mechanism that involves overeating to stimulate the dopamine receptors.

Investment opportunity?
The men in this study were 41, so they were kids in the 1970s, long before drugs such as Pfizer's (NYSE: PFE  ) Quillivant XR, Eli Lilly's (NYSE: LLY  ) Strattera, Johnson & Johnson's (NYSE: JNJ  ) Concerta, or Shire's (NASDAQ: SHPG  ) multitude of ADHD drugs were available to treat the disease.

It seems reasonable to assume that if adolescence could control their ADHD, it might decrease their desire to overeat. There's some evidence for this hypothesis from another study that found children with ADHD who weren't taking medication were 1.5 times as likely to be overweight than those who took ADHD medications.

Companies that sell ADHD medications are in a constant battle with groups that think that children are being over-diagnosed and over-medicated. Avoiding obesity would add arsenal to the argument that treating with drugs is a better choice.

Of course, the companies have to be careful to not overstep their marketing. Side effects for some ADHD medications include reduced appetite and weight loss, which might explain why medicating reduces the likelihood of being overweight. But they're not approved to be used to treat obesity, so the companies aren't allowed to promote them for that purpose. In the fourth quarter of last year, Shire took a $57.5 million charge to settle an investigation of Shire's marketing practices for its ADHD drugs, although it didn't detail exactly what practices the Department of Justice wasn't happy about.

If all else fails, there are drugs actually approved to treat obesity
VIVUS and Arena Pharmaceuticals are in a battle to capture the obesity market with their recently launched drugs. If you're in the dark, grab copies of The Motley Fool's premium research reports on VIVUS and Arena Pharmaceuticals to stay up to date. The reports give investors the must-know information, including an in-depth look at the obesity market and reasons to buy and sell both stocks. Click now for an exclusive look at Arena and VIVUS -- complete with a full year of free updates -- today.

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More Expert Advice from The Motley Fool

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Why Bank of America Is Waffling Today

Since reporting earnings Wednesday morning, Bank of America (NYSE: BAC  ) lost 6.5% through trading yesterday. The initial response to B of A's earnings was largely negative due to reported revenue that missed expectations -- even though continued improvements in the bank's operations resulted in quadrupled earnings. The bank opened 1% higher this morning, giving some hope to the possibility of regaining some of the traction it's lost in the past two days, but quickly fell within minutes of the opening bell. As of 10:15 a.m. EDT, Bank of America is sitting at a 0.8% gain.

Earnings disappointments continue
This earnings season hasn't been very favorable for the big four banks, with many investors being disappointed in underlying data points that caused improvements in earnings to be largely set aside. This was the case last week for both JPMorgan Chase  (NYSE: JPM  ) and Wells Fargo (NYSE: WFC  ) , which both reported record first-quarter earnings. However, both banks reported softening in the mortgage market, leaving investors with doubts about revenue growth for future quarters.

Bank of America reported an improvement in its mortgage origination operations, though it missed analyst expectations for revenue, which generated the same response from investors, leading to a big drop over the past two days. But while there are many voices asserting displeasure in BAC's report, there are an equal number citing vast improvements in the bank's operations and underscoring the importance of looking beyond what analyst expect.

New developments
Fueling this morning's drop may be something other than continued investor disappointment in the bank's earnings -- insurer AIG (NYSE: AIG  ) has just won an important fight in the continuing legal battle against Bank of America. In a suit filed back in August of 2011, AIG is seeking damages for losses caused by mortgage-backed securities sold by B of A's Countrywide and Merrill Lynch segments. The insurer contends that Countrywide and Merrill Lynch misrepresented the securities, leading to AIG's losses.

This morning, a federal appeals court overturned a prior ruling blocking the transfer of the case to a New York State court, which AIG argues is the correct venue for the case. This is a big win for AIG as the delay in this case was largely due to this issue. If AIG wins the case overall, Bank of America may have to pay up to $10 billion in claims related to the $28 billion in securities sold to AIG.

A day at a time
As always, be careful how you assess a day's movements. Even though there is new information that could affect Bank of America, there remains an underlying strength in the continued improvements within the bank -- giving it the momentum to continue growing. As a Foolish investor, remember that one day's changes won't always stick with the company for the long term, so if you're confident in the fundamentals of the company, don't let one piece of news or a sell-off scare you away. 

Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

Comcast Vows Better Customer Service While Skeptics Scoff

#fivemin-widget-blogsmith-image-478728{display:none}.cke_show_borders #fivemin-widget-blogsmith-image-478728,#postcontentcontainer #fivemin-widget-blogsmith-image-478728{width:570px;display:block} At the annual International Consumer Electronics Show, it's traditional to hear announcements of the most amazing things, some of which are so amazing that it's hard to believe they might happen. For example, Windows tablets have yet to put the sales of iPads to shame. Past announcements of smartwatches never saw them become a must for the fashion conscious. This year, perhaps one of the most eyebrow-raising claims belonged to Comcast (CMCSA) (CMCSK). "We expect that customer service will soon be one of our best products," said CEO Neil Smit, according to tech blog BGR. That would be one astonishing turnaround. Although, as BGR put it, "Considering the quality of most of Comcast's products, this wouldn't be very difficult to achieve." In "The Prince," Machiavelli once debated whether it was better for a leader to be feared or loved. (He said both if possible, but if not, then feared.) What he didn't address so clearly was the utility of being hated. That's been Comcast's quandary, as the company has exceeded at being hated. It won -- if that's the right word -- Consumerist's audience poll of the most hated company in the country last year. That was the second time the largest cable television provider in the U.S. grabbed the crown, with 2010 being the first. Comcast beat out the likes of Monsanto (MON), Walmart (WMT) and Bank of America (BAC). It even bested SeaWorld (SEAS) after the scandalous Blackfish documentary. The reason? Bad customer service. No, make that service so terrible that it has gained national attention on more than one occasion in just the last year: A tech journalist recorded his attempt to cancel his Comcast service, as Time reported, while a "customer retention" specialist desperately tried to keep him from doing so. Another man had multiple problems with inaccurate billing and was only able to resolve it because he had recorded a Comcast customer service rep previously making a promise, according to Mashable. Comcast managed to get a customer fired over a billing dispute and eventually apologized, as AOL Jobs reported. BGR reported that Comcast closed out the year by making a customer spend four hours on the phone to cancel service. This is beyond bad service. It's the stuff of legend that makes attempts to merge with Time Warner Cable (TWC) a tad more difficult than might otherwise be the case. But all that is behind Comcast, according to Smit. "We do need to transform our customer experience, and I think we have a lot of work to do," Smit said, according to Consumerist. "It will take time, but we'll get it done," in what Consumerist said could be the "understatement of the century." Of course, it may take a phone call or two. Or three. More from Erik Sherman
•Plunging Oil Prices Send Some Things Up, Others Down •Worst Charities? Or Victims of an Indifferent Public? •Same-Sex Marriage Promises Big Economic Boost to Some States

Home prices jump nearly 11% in April

NEW YORK (CNNMoney) Home prices jumped nearly 11% in April , and are now up more than 22% from the bottom three years ago.

Still, they are 18% below the peak set in July 2006, according to S&P/Case-Shiller. And price gains are slowing.

"Although home prices rose in April, the annual gains weakened," says David Blitzer of S&P Dow Jones Indices. "Last year some Sunbelt cities were seeing year-over-year numbers close to 30%, now all are below 20%."

Low mortgage rates, which the Federal Reserve is expected to keep reined in through mid-2015, and gains in the job market should continue to help the housing market, according to Blitzer.

But don't get too comfortable.

Home sales are being supported by all-cash buys and low supply, said Blitzer. And he says qualifying for a mortgage is still a problem.

"First time home buyers are not back in force," he said.