How politics skew your investment decisions

Here are three of the week's top pieces of financial advice, gathered from around the web:

Politics and your portfolio

Your politics can skew your investing decisions in unexpected ways, said Mark Hulbert at The Wall Street Journal. "Most people probably have some idea how their investment choices might change depending on who wins in November," but research shows that even seasoned investors often make choices based simply on whether their favorite candidate won or lost. Studying the trading histories of 60,000 individual investors, researchers found that Democratic voters were more confident about the future of the economy after Bill Clinton won the 1992 and 1996 elections. That confidence not only translated into their being willing to take on more risk and favor U.S. companies, but also led them to trade less frequently, which leads to better returns on average. The same was true for Republicans after George W. Bush won the 2000 election.

The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Off-campus housing's black box

A college's estimates for off-campus housing costs should be taken with a grain of salt, said Rochelle Sharpe at The New York Times. Off-campus living expenses for colleges within the same county vary by $6,448 on average, according to research by the New America Foundation, making comparison shopping difficult. The Department of Education requires colleges to report the cost of attendance, including off-campus housing, "but gives lots of wiggle room in how [schools can] come up with the numbers." The result is that some colleges keep estimates low, either to seem more affordable or to discourage students from taking on too much debt. But others overestimate, because a higher cost of attendance allows students to qualify for more low-cost federal loans. Either way, it's a "murky business."

Is a balance transfer worth it?

A balance transfer can be a handy way to pay down credit card debt, but do the math before applying for a new card, said Jonnelle Marte at The Washington Post. Transfer fees are usually a percentage of the balance transferred, typically 3 to 5 percent. If the interest you'd normally pay on your credit card is less than or about equal to the fee, you're better off not doing a balance transfer. Also factor in the new card's interest rate. Often, the lower rate applies only for a limited amount of time, usually six to 18 months. "Finally, you should think about how the balance transfer may affect your credit score." A new card can increase your available credit, helping your score in the long run, but applying for a new credit card can temporarily lower your score by a few points.