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Terrorism & the Financial Markets

November 24th, 2015 | No Comments | Posted in Financial News

Wall Street has the potential to recover quickly from geopolitical shocks.

shutterstock_146358695The worst terrorist attack in Europe since 2004 has rattled governments and investors. The French government has closed the nation’s borders and placed thousands of soldiers on the streets of the country’s major cities.1

As an anxious world watches the response of France (and perhaps other nations) to the ISIS attacks, there is also concern about European and global financial markets. Wall Street, which is coming off its second-worst week of the year, hopes that fear will not drive a major selloff.2

Even if it does, history suggests that any damage to global shares might be temporary.

While geopolitical shocks tend to scare bulls, the effect is usually short-term. On September 11, 2001, the attack on America occurred roughly at the beginning of the market day. U.S. financial markets immediately closed (as they were a potential target) and remained shuttered the rest of that trading week. When Wall Street reopened, stocks fell sharply – the S&P 500 lost 11.6% and the Nasdaq Composite 16.1% in the week of September 17-21, 2001. Even so, the market rebounded. By October 11, the S&P had returned to the level it was at prior to the tragedy, and it continued to rise for the next few months.3,4

In the U.S., investors seemed only momentarily concerned by the March 11, 2004 Madrid train bombings. The S&P 500 fell 17.11 on that day, as part of a descent that had begun earlier in the month; just a few trading days later, it had gained back what it had lost.5

Perhaps you recall the London Underground bombing of July 7, 2005. That terror attack occurred on a trading day, but U.K. investors were not rattled – the FTSE 100 closed higher on July 8 and gained 21% for the year.4

Wall Street is remarkably resilient. Institutional investors ride through many of these disruptions with remarkable assurance. Investors (especially overseas investors) have acknowledged the threat of terrorism for decades, also realizing that it does not ordinarily impact whole economies or alter market climates for any sustained length of time.

You could argue that the events of fall 2008 panicked U.S. investors perhaps more than any geopolitical event in this century – the credit crisis, the collapse of Lehman Bros. and the troubles of Fannie, Freddie, Merrill Lynch and Bear Stearns snowballed to encourage the worst bear market in recent times.

When Hurricane Katrina hit in 2005, truly devastating New Orleans and impacting the whole Gulf Coast, it was the costliest natural disaster in the history of the nation. It did $108 billion in damage and took more than 1,200 lives. Yet on the day it slammed ashore, U.S. stocks rose 0.6% while global stocks were flat.4,6

The terror attacks in France and Lebanon have stunned us. They may stun the financial markets as well, but perhaps not for long.

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.

Citations.
1 – cnbc.com/2015/11/13/french-police-report-shootout-and-explosion-in-paris.html [11/13/15]
2 – abcnews.go.com/Business/wireStory/stocks-set-end-winning-streak-retail-slammed-35177303 [11/13/15]
3 – tinyurl.com/pzwzrmb [11/14/15]
4 – moneyobserver.com/opinion/terrorism-terrorises-stocks-fishers-financial-mythbusters [10/22/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F11%2F04&x=34&y=18 [11/14/15]
6 – cnn.com/2013/08/23/us/hurricane-katrina-statistics-fast-facts/ [8/23/15]

Reducing Expenses to Achieve Your Goals

November 24th, 2015 | No Comments | Posted in Financial News

Achieving your financial goals sometimes requires you to make adjustments to your family budget. Quite often, making changes to the expense side of the budget can generate the biggest results in the shortest period of time. Remember, it’s not how much you earn in your lifetime, but how much you spend that can keep you from achieving your goals.

If you have a financial goal in your life, take a look at your spending as a way to save the money to achieve that goal. The exercise below can help.

November, 2015 - Reducing Expenses to Achieve Your Goals

Prepare Your Car for Winter Weather

November 24th, 2015 | No Comments | Posted in Lifestyle

shutterstock_174738440In the winter months, we all need to take additional steps to protect ourselves from the cold – warmer clothes, a heavy coat, a hat, mittens, a scarf and boots with good traction for the snow. It’s also a good idea to protect your car during cold months by winterizing your vehicle before the beginning of the season. This is essential, as cold temperatures make it difficult for engines to work properly, snow limits tire traction and salt causes rust and gravel pits on the exterior paint. Consider these car winterizing suggestions before the temperature drops:

  • Place snow tires on your vehicle
    • Braking, accelerating and handling are tough to do with worn or high performance tires on slippery roads. Snow tires will increase traction and reduce your chances of slipping on slick surfaces.
  • Check your tire pressure
    • Properly inflated tires ensure the best possible connection between your vehicle and the road, especially in slick conditions.
    • Cold temperatures cause tire air pressure to drop since gases contract when they’re cold.
  • Check your four-wheel drive system for malfunctions
    • Check that your system engages and disengages properly and does not make any unusual noises when you start it. Also, check the gear oil levels and transmission before temperatures get too cold.
  • Change the oil in your engine and check the viscosity grade
    • Viscosity of oil – how thick it is – will change depending on its temperature. The colder oil is, the thicker it will become. Consequently, thick oil does not circulate through an engine as easily as thinner oil during start-up.
  • Have belts and hoses inspected
  • Inspect wipers and refill wiper fluid
  • Check your car battery
    • Extreme temperatures can cause your vehicle’s battery to operate at less than 50 percent. If your battery is over three years old, have it tested.
  • Check the antifreeze mixture
    • The ideal mixture of antifreeze and water in your radiator is 50:50. If this ratio is off, your vehicle will not perform as well.
  • Place a roadside emergency supply kit in your car

Make sure to take the necessary steps to protect your car against the cold to ensure that it will last the entire season long!

©2008-2010, 2013 Zywave Inc., All Rights Reserved.

How Gen Xers Can Get Their Retirement Saving Back on Track

November 24th, 2015 | No Comments | Posted in Financial News

Steps that may help to address a savings shortfall.

shutterstock_103968356Were you born within the years 1965-1980? That makes you a member of Generation X, and it means you are between ages 35-50. Gen Xers now constitute “the sandwich generation” – how time flies.1

Broadly speaking, GenX is the first generation that has had to save for retirement without traditional pension plans. In addition, most Gen Xers will probably retire after 2033 – the year in which Social Security predicts its trust funds will run dry, barring federal government intervention.1

With eldercare responsibilities, kids, and student loans, this demographic is challenged to save for retirement. In fact, 34% of Gen Xers participating in a recent Northwestern Mutual survey stated they had no idea how much retirement income would be sufficient for them. In April, Bankrate found that just 12% of Gen Xers direct more than 15% of their incomes into savings; about 40% were saving 5% or less of their incomes. More disturbingly, 46% of Gen Xers who responded to a May Allianz Life retirement preparedness survey indicated that they would “just figure it out when I get there.”1,2

What steps can Gen Xers take to keep up or catch up for retirement? First of all, meet with a financial professional to talk about your savings effort so far. That kind of conversation should help to illuminate just how far you have to go in terms of attaining a comfortable retirement. Maybe the distance toward that goal is shorter than you think; maybe it is longer. It must not be casually guessed.

Here are some other steps toward greater retirement savings…

Max out your retirement plan contributions. If you are already doing this, great. Many Gen Xers are not doing this. Perhaps the contribution is thought of as a lump sum that is hard to part with every year, rather than a series of incremental salary deferrals. Arrange monthly or per-paycheck contributions, and things look more manageable within the household budget. Some employer-sponsored retirement plans offer employees the option of automatically increasing their contributions with time, which helps.3

If you own a business or work as a solopreneur, consider SIMPLE plans, SEP-IRAs, or Solo(k)s. As these plans allow employee and employer contributions, business owners have used them to dramatically increase their retirement savings. In 2016, the maximum employee deferral for a SIMPLE plan is $12,500 with a $3,000 catch-up contribution allowed. As much as $53,000 can be contributed to a Solo(k) annually.4,5

Vow to make those additional $1,000 catch-up contributions when you turn 50. They should not be scoffed at. Every dollar counts, and the extra $1,000 you pour into your workplace retirement plan or IRA means greater yearly contributions that can foster greater yearly compounding.

Attack debts. The money you save has to come from somewhere else in your life, and if you cannot immediately find some additional dollars to save, debt is likely the reason. There are many debts you cannot eliminate within a year, but there are other debts you can. Attacking the smallest first still frees up some money per month and means fewer per-debt interest charges in your financial life. Put an extra $30 a week into a retirement account, and you put $1,560 more into your retirement savings per year.

A debt-free retirement ought to be one of your financial objectives. Perhaps you will become debt-free by age 65, perhaps you not – but that goal is certainly worth striving to realize.

Revise your monthly budget. Take a second look and see how many needs there are, then how many wants you are accommodating. Recognize the little things: if you spend $6 a day on coffee, that money ($180/month) has effectively become one of your “fixed” monthly expenses.

Tell your kids they will have to pay for their college education. Refrain from providing “college aid” out of the Bank of Mom & Dad. Helping your kids with their college costs (or tacitly agreeing to help them with their college loans) is a path toward retirement insecurity. There is no “retiree financial aid” and you may still have outstanding education debt of your own to tackle.

As a Gen Xer, you have a real challenge to save adequately for retirement, but you also have some time on your side. Make the most of it. You definitely do not want the task of figuring it out “when you get there.”

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.

Citations.
1 – usatoday.com/story/money/2015/06/06/generation-x-retirement/28571965/ [6/6/15]
2 – nextavenue.org/gen-x-sleeping-through-their-retirement-wake-up-call/ [8/27/15]
3 – usatoday.com/story/money/personalfinance/2015/10/10/gen-x-retirement-saving-investing-generationx-401k/73227036/ [10/10/15]
4 – shrm.org/hrdisciplines/benefits/articles/pages/2016-irs-401k-contribution-limits.aspx [10/22/15]
5 – irs.gov/Retirement-Plans/One-Participant-401%28k%29-Plans [10/26/15]

November 2015 Monthly Economic Update

November 24th, 2015 | No Comments | Posted in Monthly Economic Update

November2015-Monthly_Economic_Update

Seasonal Flu Vaccine Myths

November 24th, 2015 | No Comments | Posted in Lifestyle

sickThe Centers for Disease Control and Prevention (CDC) recommends anyone over the age of 6 months get a flu shot each year. Unfortunately, many people don’t because they believe one or more of the following myths.

Myth: The flu isn’t so bad.

Fact: The flu can lead to serious illness, including pneumonia, even for otherwise healthy people. Plus, a normal bout of the flu can keep a person out of work or school for several days.

Myth: The flu vaccine will make you sick.

Fact: The flu vaccine cannot give you the flu, although you may get side effects like a sore arm, low fever or achiness. Side effects are generally mild and short-lived.

Myth: Healthy people don’t need a vaccine.

Fact: Anyone can become sick with the flu and experience complications, even people who are active and healthy. Plus, if you get the flu, you may endanger those around you who are at a higher risk for complications.

The Centers for Disease Control and Prevention (CDC) recommends anyone over the age of 6 months get a flu shot each year.

Myth: You can still get the flu after getting the vaccine.

Fact: This one is partially true for the following reasons:

  • You may have been exposed to a non-flu virus, such as the common cold.
     
  • You may have been exposed to the flu after you got vaccinated but before the vaccine took effect, which takes about two weeks after vaccination.
     
  • You may have been exposed to a flu virus that was different from the viruses included in the current year’s vaccine. The standard flu vaccine protects against the three influenza viruses expected to be most prevalent, but other flu viruses circulate as well.

Myth: It’s too late to get protection from a flu vaccine.

Fact: As long as the flu season isn’t over, it’s not too late to get vaccinated. Flu seasons can begin early in fall and last until spring, so getting a vaccine can still be beneficial into the spring months.

Myth: You only need to get vaccinated if family and friends get sick from the flu.

Fact: If you wait until people around you get sick, it is often too late to protect yourself, because it takes about two weeks for the vaccine to kick in.

Myth: The discomfort of getting a shot isn’t worth it.

Fact: The very minor pain of a flu shot is nothing compared to the flu. Plus, many people can get the nasal-spray vaccine instead of getting a shot. Talk to your doctor about which is the best choice for you.

Myth: If you got the vaccine last year, you don’t need it this year.

Fact: Research suggests that your body’s immunity from the flu vaccine declines throughout the year, so there is often not enough immunity left to protect you from getting sick for multiple seasons. This is why the CDC recommends a flu vaccine each year.

Myth: The vaccine isn’t safe.

Fact: Flu vaccines have been used for more than 50 years and have a very good safety track record. They are made the same way each year, and their safety is closely monitored by the CDC and Food and Drug Administration.

Source: www.cdc.gov

Engagement Ring Insurance 101

November 24th, 2015 | No Comments | Posted in Lifestyle

RingInsurance101Putting an insurance policy on your engagement ring may sound unromantic, but nothing’s sweeter than peace of mind.

What Ring Insurance Is:

There are a few ways to insure your engagement ring. Ring insurance can be purchased as an extension (also called a “rider”) for your renters or homeowners policy. Renters and homeowners policies cover the stuff in your home, but only up to a certain dollar value. Expensive, special items, like engagement rings, art and electronics, are guaranteed through scheduled personal property coverage—an insurance policy extension that covers particular items. Another option is to insure your ring through a company that specializes in jewelry insurance, which might offer more coverage than a standard homeowners policy (replacing a lost or stolen ring rather than paying a set amount of cash, for instance).

Who Needs Ring Insurance Most:

Any couple with jewelry that has pricey material or sentimental value. Whether your wedding and engagement rings cost $500 or $50,000, an insurance policy is a way of honoring not just their financial value but what they represent. The sentiment behind your rings is priceless, but the rings themselves can be replaced—if they’re insured—in the event that something happens to them.

How Ring Insurance Works:

You’ll need to provide your receipts, as well as an appraisal, which costs a small fee. (You can get an appraisal from a certified gemologist.) And remember: If you move after the wedding, make sure your “ring rider” follows you. Some couples have the ring insured at the bride’s house (or her parents’) before the wedding, but forget to add it to the policy for their new home when they move in together.

If you don’t have a renters or homeowners policy, there’s an alternative way to insure your ring: Certain insurance companies offer policies through jewelers on individual pieces—ask your jeweler if they work with an insurance company to offer ring insurance. These kinds of policies can vary widely company by company (usually a jeweler will offer a policy that’s underwritten by smaller company), so ask specific questions about the level of coverage provided.

Questions to Ask Before You Choose a Policy:

  • Is the ring covered if you lose it accidentally, or only if it’s stolen?
  • How will the company replace the ring—with a check? Or will they require you to purchase a replacement through a specified jeweler?
  • What if it’s a vintage ring or other unique piece? How will the quality and size of your diamond—and that of a replacement if needed—be documented?
  • Is the ring insured to full cost or a fraction of it?
  • How will you need to prove the ring vanished if you make a claim?
  • Are there any circumstances that aren’t covered? (What if your ring flies off at the circus and gets trampled by elephants, for example?)

Average Cost:

The yearly cost to insure your ring is $1 to $2 for every $100 that it would cost to replace. In plain English, this means that if your ring would cost $9,000 to replace, you might expect to pay between $90 and $180 per year to insure it—or slightly more in cities where the risk of theft is higher.

How to Get Your Cost Down:

Buy a vault or safe to keep jewelry in when it’s not being worn. You can also keep paperwork like appraisals in the safe, so you’ll always know where it is if needed.

If You Only Remember One Thing:

When you shop for a “ring rider” policy, make sure to read the fine print. A good policy will cover every potential ring-threatening situation, from theft and damage to accidentally dropping it in the garbage disposal.

Source: theknot.com

“All My Money” Personal Finance Rap

November 24th, 2015 | No Comments | Posted in Videos

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