Couples and Investing

Ken and I believe that married couples should hold joint accounts, and that applies to investment accounts as well. But there are exceptions.

• A wife being supported by her husband should have some assets in her name as a cushion.
• If you're in a second marriage and have children from your first marriage, you'll need to keep their college savings and inheritances out of the common pile.
• What about couples who are living together? Holding joint investments of any kind, whether it's real estate or an equity account, is tricky. Worst-case scenario: You'd have little legal recourse if your partner cleans out the account and skips town. And if your partner should die without a will that specifies the money goes to you, a relative could claim it.

If you're in a committed relationship, the way you invest is part of that commitment. Plan a strategy together. This doesn't mean that one of you takes all the risks while the other holds nothing but no-risk U.S. Treasuries. If you're investing separately, you should each have a diversified portfolio for your own safety. But don't make investments that would keep your partner awake at night worrying about the risk! Talk it over and weigh your decisions together.

You may not always agree on where to put your money - if you disagree on vacation choices and what color to paint the den, there's no reason to believe you won't have some differences of opinion when it comes to selecting a stock, bond or mutual fund. That might argue for each of you having a small portfolio to call your own.

Of all the things a couple can fight about, one of the most easily avoidable subjects should be "Didn't I tell you we should have invested in XYZ when it was down at $7 a share!?" But listen to your partner's reasons for objecting. Talk before you rush into anything. And don't be reckless. We believe in a well-thought-out buy-and-hold investment style for everyone, and when you're a couple you owe that much responsibility to your spouse.

Dolan Smart Money Move: Be honest with each other about what you own and what you're thinking of buying. Whether your accounts are commingled or separate, you ought to be investing with the same goals in mind. If one of you is more risk averse than the other, let the conservative investor in your family keep a portfolio weighted more in that direction, with large-cap stocks, high-grade bonds, and Treasury securities. But review your collected investments frequently—once a week or so, to make sure you're not overly weighted in one direction.

Keep your relationships financially-healthy with these articles:

• Do You Suffer From MMD (Marital Money Discord)?
• Essential Smart Money Moves for Blending Families
• Are Women Better Investors Than Men?