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Protect Your Assets While You Are Away

June 20th, 2014 | No Comments | Posted in Lifestyle

Did you know that most burglaries do not occur at night time like most people believe? Instead, they occur between 8am and 4pm when people are at work. Thieves tend to strike when homes show obvious signs that no one is there.

Summertime is when a lot of individuals and families go on vacation. To keep your home and belongings safe while you are away, follow these important tips:

  • shutterstock_181812692Place “Beware of Dog” and home alarm signs in your yard. Even if you do not have a dog or security system, thieves may think you do.
  • Never allow strangers into your home, even if they claim to be hurt and need assistance.
  • Do not place a sign on your home with your family’s name. Thieves could look up your name in the phone book, call you and when you do not answer, break in.
  • Turn down the ringer on your phone when you are not at home.
  • Tell your neighbors and friends when you will be away so they can look out for suspicious behavior.
  • Place automatic timers on your lights and set them for different times in different rooms. This will give the illusion that someone is home.
  • Put a hold on your newspaper.
  • Do not leave valuables such as art work, jewelry and electronics sitting in plain view.
  • Install motion sensor lighting around your home and garage.

Remember these tips the next time you go out of town and keep your belongings where they belong – at home.

Classic Investing Mistakes

June 20th, 2014 | No Comments | Posted in Financial News

How many can you prevent yourself from making?

shutterstock_81597892Year after year, in bull and bear markets, investors make some all-too-common blunders. They have been written about, talked about, and critiqued at some length – and yet they are still made. You can chalk them up to psychology, human nature, perhaps even a degree of peer pressure. You just don’t want to find yourself making them more than once.

#1: Caving into emotion. The deVere Group, which consults high net worth investors around the world, recently surveyed 880 of its clients and found that even with their experience, some had made the equivalent of a rookie mistake – 20% had let fear or greed prompt them into emotional investment decisions.1

Investors use past performance to justify their greed – it did well recently, I better buy more of it – but past performance is merely history and represents a micro factor versus macroeconomic factors influencing sectors and markets. Fear prompts panic selling. How many investors draw on technical analysis or even stop-loss limits when shares suddenly decline? A stop-loss limit is handy for those who don’t want to watch the market every day – it instructs a brokerage to sell a stock if it drops below a specific value, often in the range of 8-10% of the purchase price.2

#2: Investing without a strategy. Some people invest with one idea in mind – making money. An outstanding goal to be sure, but it shouldn’t blind them to other priorities such as tax efficiency, managing risk and reviewing asset allocation. Even 22% of the investors in the deVere poll confessed to this.1

#3: Not diversifying enough. Have you ever heard the phrase “familiarity bias”? This is when investors develop a “home team” attachment to an investment. Just as sports fans stick by the Celtics and the Cornhuskers and the Cubs through thick and thin, some investors stick with a few core investments for years. Maybe they work for XYZ Company or their mom did, or maybe they like what XYZ Company represents, so having a certain percentage of the portfolio in shares of XYZ Company gives them a good feeling. If XYZ Company craters, they won’t feel so good. You can hold too much of one investment, especially if a company rewards you with its stock.2

Conversely, some portfolios are overdiversified and hold too many investments. This is seldom the fault of investors; over time, they may end up with some shares of all the major companies in an industry group with a little help from Wall Street money managers. The core problem here is that not all of these companies can be winners.

#4: Slipshod tax management of investments. Sometimes certain investments within a taxable account will lose money, yet because of past gains they have made, the investor is stuck with capital gains tax. Some investments are better held in taxable accounts and others in tax-deferred accounts, as various types of investments are taxed at varying rates. When you retire and tap into your savings, you can potentially improve tax efficiency by drawing down your taxable accounts first, so that you’ll face the capital gains tax rate (which may be 15% or even 0%) instead of the ordinary income tax rate.3

Also, when you pull money from your taxable accounts first, your tax-advantaged accounts get a little more time to grow and compound. If they are large, another year or two of growth and compounding could prove beneficial.

#5: Seldom reviewing portfolio allocations. A long-term asset allocation strategy starts with defined percentages. Over time – and it may not take much time – the percentage allocations go out of whack. A bull market may result in a greater percentage of your portfolio assets being held in stock, and while this overweighting may seem reasonable in the near term, it may not be what you want in the long term.

#6: Investing (or reinvesting) near a market peak. Many investors play the market in one direction, which is up – they buy with expectations that a sector or the broad market will keep climbing. Short selling stocks (i.e., seek to exploit falling stock prices) takes more skill than many investors have. A buy-and-hold philosophy may prove very rewarding, as long as you don’t hold too rigidly or too long in the event of a sustained, systemic shock to the markets.

An even keel promotes a steady course. Fear, greed, bias, randomness, inattention – these are the root causes of the classic investing blunders. We have all made them; patience and experience may help us avoid them in the future.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

1 – thestreet.com/story/12733263/1/5-investing-mistakes-millionaires-make–but-theyre-still-rich.html [6/4/14]
2 – abcnews.go.com/Business/avoiding-sins-investing/story?id=18969850#.UXBFuco7bAJ [4/16/13]
3 – tinyurl.com/l6lkrfu [2/12/14]

Rising Interest Rates

June 20th, 2014 | No Comments | Posted in Financial News

How might they affect investments, housing & retirees?

shutterstock_116095609How will Wall Street fare if interest rates climb back to historic norms? Rising interest rates could certainly impact investments, the real estate market and the overall economy – but their influence might not be as negative as some perceive.

Why are rates rising? You can cite three factors. The Federal Reserve is gradually reducing its monthly asset purchases. As that has happened, inflation expectations have grown, and perception can often become reality on Main Street and Wall Street. In addition, the economy has gained momentum, and interest rates tend to rise in better times.

The federal funds rate has been in the 0.0%-0.25% range since December 2008. Historically, it has averaged about 4%. It was at 4.25% when the recession hit in late 2007. Short-term fluctuations have also been the norm for the key interest rate. It was at 1.00% in June 2003 compared to 6.5% in May 2000. In December 1991, it was at 4.00% – but just 17 months earlier, it had been at 8.00%. Rates will rise, fall and rise again; what may happen as they rise?1,2

The effect on investments. Last September, an investment strategist named Rob Brown wrote an article for Financial Advisor Magazine noting how well stocks have performed as rates rise. Brown studied the 30 economic expansions that have occurred in the United States since 1865 (excepting our current one). He pinpointed a 10-month window within each expansion that saw the greatest gains in interest rates (referencing then-current yields on the 10-year Treasury). The median return on the S&P 500 for all of these 10-month windows was 7.93% and the index returned positive in 80% of these 10-month periods. Looking at such 10-month windows since 1919, the S&P’s median return was even better at 11.50% – and the index gained in 81% of said intervals.3

Lastly, Brown looked at the S&P 500’s return in the 12-month periods ending on October 31, 1994 and May 31, 2004. In the first 12-month stretch, the interest rate on the 10-year note rose 2.38% to 7.81% while the S&P gained only 3.87%. Across the 12 months ending on May 31, 2004, however, the index rose 18.33% even as the 10-year Treasury yield rose 1.29% to 4.66%.3

The effect on the housing market. Do costlier mortgages discourage home sales? Recent data backs up that presumption. Existing home sales were up 1.3% for April, but that was the first monthly gain recorded by the National Association of Realtors for 2014. Year-over-year, the decline was 6.8%. On the other hand, when the economy improves the labor market typically improves as well, and more hiring means less unemployment. Unemployment is an impediment to home sales; lessen it, and more homes might move even as mortgages grow more expensive.4

When the economy is well, home prices have every reason to appreciate even if interest rates go up. NAR says the median sale price of an existing home rose 5.2% in the past year – not the double-digit appreciation seen in 2013, but not bad. Cash buyers don’t care about interest rates, and according to RealtyTrac, 43% of buyers in Q1 bought without mortgages.4,5

Rates might not climb as fast as some think. Federal Reserve Bank of New York President William Dudley – whose voting in Fed policy meetings tends to correspond with that of Janet Yellen – thinks that the federal funds rate will stay below its historic average for some time. Why? In a May 20 speech, he noted three reasons. One, baby boomers are retiring, which implies less potential for economic growth across the next decade. Two, banks are asked to keep higher capital ratios these days, and that implies lower bank profits and less lending as more money is being held in reserves. Three, he believes households and businesses are still traumatized by the memory of the Great Recession. Many are reluctant to invest and spend, especially with college loan debt so endemic and the housing sector possibly cooling off.6

Emerging markets in particular may have been soothed by recent comments from Dudley and other Fed officials. They have seen less volatility this spring than in previous months, and the MSCI Emerging Markets index has outperformed the S&P 500 so far this year.2

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

1 – newyorkfed.org/markets/statistics/dlyrates/fedrate.html [5/22/14]
2 – reuters.com/article/2014/05/21/saft-on-wealth-idUSL1N0NZ1GM20140521 [5/21/14]
3 – fa-mag.com/news/what-happens-to-stocks-when-interest-rates-rise-15468.html [9/17/13]
4 – marketwatch.com/story/existing-home-sales-fastest-in-four-months-2014-05-22 [5/22/14]
5 – marketwatch.com/story/43-of-2014-home-buyers-paid-all-cash-2014-05-08 [5/8/14]
6 – money.cnn.com/2014/05/20/investing/fed-low-interest-rates-dudley/index.html [5/20/14]

Monthly Economic Update – June

June 20th, 2014 | No Comments | Posted in Monthly Economic Update

Weekly Economic Update

8 Numbers Identity Thieves Want To Steal From You

June 20th, 2014 | No Comments | Posted in Lifestyle

identitytheftThe Star Wars Cantina of cybercriminals targeting your identity, healthcare, finances and privacy today might seem like a movie you’ve seen so many times you could lip sync the entire thing. Nevertheless, cybercrime and identity-related scams change faster than trending hashtags on Twitter, and the fact is nobody knows what’s going to happen next. Who would have thought Apple’s iCloud was vulnerable (much less to ransomware)? Or eBay? Data breaches are now the third certainty in life and sooner or later, you will become a victim.

According to the Privacy Rights Clearinghouse Chronology of Data Breaches tracking tool, at least 867,254,692 records were exposed through data breaches between 2005 and May 28, 2014. The Milken Institute says the number of compromised records was more than 1.1 billion between 2004-2012. The Identity Theft Resource Center reported 91,982,172 exposed records in 2013 alone. Frankly, it really doesn’t matter who is right. The amount of information out there is simply staggering.

You probably realize that identity thieves are after your email addresses and passwords, but that’s not all they want. In particular, each of us is attached to various sets of numbers that, when cobbled together, enable sophisticated identity thieves to get their claws into you. The fraudster doesn’t need all your information to complete the problem set. They just need enough to convince others that they are you. Here are eight numbers that they are gunning for.

1. Phone Numbers
You want people to be able to call you; you may even list your phone number on a public-facing site. If you do, bear in mind some companies use your phone number to identify you, at least in part. With caller ID spoofing, it’s not hard for a fraudster to make your number appear when they call one of those companies.

2. Dates and ZIPs
Birth, college attendance, employment, when you resided at a particular address, ZIP codes associated with open accounts—these are all numbers that can help a scam artist open the door to your identity by cracks and creaks. Many people put this information on public websites, like personal blogs and social media sites. In the post-privacy era, it is imperative you grasp the concept that less is more. Another tactic worth trying is populating public-facing social media sites with inaccurate information—though you might want to check each site’s rules since some sites frown upon the practice.

3. PIN Codes
Card-skimming operations use a device to capture your debit card information while a camera records you as you type in your PIN code, making it very easy for a thief to replicate. Cover your hands and be paranoid, because it’s possible someone actually is watching you.

4. Social Security Numbers
Your Social Security number is the skeleton key to your personal finances. There are many places that ask for it but don’t actually need it. Be very careful about who gets it and find out how they collect it, store it and protect it. Whenever you’re asked for your SSN, always consider whether the request is logical based upon the context of your relationship with them.

5. Bank Account Numbers
Your bank account number is on your checks, which makes a personal check one of the least secure ways to pay for something. Consider using a credit card. You get rewards, buyer protection and less of your information will be out there.

6. IP Addresses
Scammers can use malware and a remote access tool to lock files on your computer and then demand a ransom in exchange for access. A message informing a user that his or her IP address is associated with online criminal activity is a common scare tactic used in ransomware scams. Don’t fall for it. While it’s not difficult to track an IP address, there are a number of browsers that hide your IP address and associated searches from the bad guys, and there are fixes for ransomware.

7. Driver’s License and Passport Numbers
These are critical elements of your personally identifiable information that represent major pieces of your identity puzzle and, once you have the number, these documents can be counterfeited. Countless times each day, millions of personal documents undergo major makeovers and suddenly feature new names, addresses and photographs of fraudsters.

8. Health Insurance Account Numbers
Health insurance fraud is on the rise, and one of the biggest growth areas is identity-related health care crimes. This can jeopardize your life — not just your credit or finances, as the fraudster’s medical information can be commingled with yours, precipitating blood type changes, and eliminating certain allergies to meds or presenting new ones. The results can be catastrophic when a course of treatment is prescribed based upon incorrect information in the file.

It’s time to become a data security realist. Data breach fatigue is the enemy. Every new compromise and scam is potentially crucial news for you, since it may point to weak spots in your own behaviors and ways that your data hygiene might be putting you at risk. So keep reading articles about new threats to your personal data security, and read every single email alert that you receive—though be careful of the obviously fake emails and always verify directly with the institution.

The smartest thing you can do is to assume the worst. Your personally identifying information is out there, and, in the wrong hands, you’re toast—even if you are really on top of things. That said, by monitoring your bank and credit card accounts and the Explanation of Benefits Statements you receive from your health insurers, you’ll be in a better position to minimize the damage. Most importantly, read your credit reports. You can do that for free once a year, and use free online credit tools, like those on Credit.com, which updates your information monthly, explains why your credit scores are what they are, and give tips for what you can do to improve your credit standing. But then what?

It is also vital for you to have a damage control program in place once you suspect that you have an identity theft issue. Contact your insurance agent, bank and credit union account rep, or the HR Department where you work to learn if there is a program to help you recover from an identity theft. You may well be surprised that there is and you are already enrolled for free as a perk of your relationship.

While there is no way to avoid cybercrime and identity theft, there is plenty you can do to make sure the damage is minimized and contained, and that no matter what happens, your daily life can go on without too much disruption.

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Hackers Can Digitally Hijack Your iPhone And Hold It For Ransom

June 20th, 2014 | No Comments | Posted in Lifestyle

Hackers can digitally hijack your iPhone and hold it for ransomIf it wasn’t our devices and data at risk, it would be pretty fascinating to see the creative new ways hackers find to attack various systems. But it is our data and devices being compromised constantly by nefarious hackers, and their latest tactics use Apple’s own security tools against Apple device owners in one of the most devious hacks we have seen in quite some time.

The Age on Tuesday reported news of a new scam that hackers have begun perpetrating in Australia.

A number of iPhone, iPad and Mac owners in Western and Southern Australia awoke Tuesday morning to find that their devices had been locked using Apple’s Find My iPhone, Find My iPad and Find My Mac Features.

These features were designed to allow users to remotely locate Apple devices that have been lost or stolen, and they also allow users to lock their lost devices and display a message to aid in their recovery.

Hackers in Australia have found another use for Apple’s remote locking feature, however. They have been able to compromise Apple’s iCloud-based remote device locking feature in order to render iPhones, iPads and Macs useless. They then display a message on the devices that demands a ransom be paid via PayPal before they will unlock the devices.

State of the Hack: 43% of all DDoS attacks in Q4 originated …

A number of users have confirmed the hacks on Twitter, Facebook and Apple’s own support forum. Apple has not yet commented publicly on the scam.

This latest news of Apple’s systems being compromised comes just one week after hackers claimed they were able to hack iCloud and unlock iOS devices.

Those looking to prevent this devious new attack should ensure that they have PIN code or password protection enabled on their devices. Two-factor authentication can also be used to further protect iCloud accounts.

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