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The Equifax Data Breach

The Equifax Data Breach

Have you been affected? If so, how can you try to protect yourself?
2007 Stress out ladt look at computer 2007 pic


On September 7, credit reporting agency Equifax dropped a consumer bombshell. It revealed that cybercriminals had gained access to the personal information of as many as 143 million Americans between May and July – about 44% of the U.S. population. The culprits were able to retrieve roughly 209,000 credit card numbers, in addition to many Social Security and driver’s license numbers.1

How can you find out if you were affected? Visit, the website Equifax just created for consumers. There, you can enter your last name and the last six digits of your Social Security number to find out. (Having to enter the last six digits of your SSN hints at how significant this breach is.)2

If you are among the consumers whose data was hacked, Equifax will ask you to return to to enroll in an identity theft protection product, TrustedID Premier. This program will provide you with free credit monitoring for a year. (The lingering question is whether your data could be used easily by criminals afterward.)1,2

How should you respond? Beyond simply taking Equifax up on its offer of one year of identity theft insurance and free credit monitoring, you can take other steps.

Check your credit reports now. (Unless you have already done so in the past month). You can get one free credit report per year from Equifax, TransUnion, and Experian. To request yours, go to Scrutinize your credit card and bank account statements for unfamiliar activity, and sign up for email or text alerts offered by your bank or credit card issuer(s), so that notice of anything suspicious can quickly reach you.

Consider changing the password for your main email account. A weak password on that account is a low bar for a cybercrook to hurdle – and once hurdled, that crook could potentially pose as you to change the passwords on your financial accounts.3

Regarding bank, investment, and credit card account passwords, avoid the obvious. Too many people use simple passwords based on their pet’s name, their last name and year of birth, the high school they attended, etc. Sadly, these same simple facts are often answers to security questions for credit card and bank accounts. Ask your bank or credit card issuer if you can use additional, random words or a PIN for passwords or security question answers. That way, you can avoid logging in using data that is in the public record. You want your password to be long and random, to make it harder for a would-be thief to guess.

You may want to consider paying for additional identity theft protection for years to come. This is one way to try and shield yourself from the unauthorized use of your Social Security number, driver’s license number, email accounts, and credit card numbers.

If someone calls you out of the blue claiming to be from Equifax, do not cooperate with them. Unless Equifax is returning your call, they will not contact you by phone. The same applies if you get a random, unsolicited email or text from “Equifax” – do not comply, or you may inadvertently hand over personal information to a fraudster. Stay vigilant, today and in the future.


1 - [9/7/17]
2 – [9/8/17]
3 – [9/8/17]

Cybercurrencies: A Risky Choice


Cybercurrencies: A Risky Choice

Investors attracted by bitcoin & other altcoins should recognize their downsides.


Bitcoin. Ethereum. Litecoin. Ripple. These are just four of the cybercurrencies attracting opportunistic investors today. Are they the next big thing? Or the next big bust?

The answer to that question may vary per day, week, month, or year. These altcoins are classified as commodities, not currencies, by the Commodity Futures Trading Commission. Like all commodities, their value can quickly change.1

This spring, a bitcoin bubble popped. As 2017 unfolded, the value of a single bitcoin tripled, reaching more than $3,000 in May. Just weeks later, it was down to around $2,245, sliding roughly 25%. That tumble paled in comparison to the dive it took starting in late 2013, when its price sank from above $1,000 to about $200. After losing 80% of its value, the price then stayed around $200 for nearly three years.1

Ethereum went on an even wilder ride. An ether was worth $8 when 2017 started. By June, its value was hovering near $400. In mid-July, the price slipped below $200.2

If bitcoin and ethereum were stocks, price fluctuations like this would leave their shareholders alternately exhilarated, horrified, and exhausted. Yet, many equities investors are looking at cybercurrencies with great interest, seeing “money to be made.”

As the above examples show, money invested in these commodities can also easily be lost. Extreme volatility aside, ethical and moral issues are also complicating the acceptance of altcoins.

Cryptocurrency may be revolutionary, but it is also shadowy. In the opinion of the Securities and Exchange Commission, bitcoin and other little-regulated altcoins are ripe for criminal activity, particularly fraud and currency manipulation. The Treasury Department’s Financial Crimes Enforcement Network agrees.1

Cryptocurrencies have been linked to money laundering, a common practice of drug cartels. They are also convenient for online gambling operations. Does an investor really want to risk supporting these activities? Some analysts argue that these doings have been fundamental to the rise of bitcoin and ethereum.2

You may be curious to know how the Internal Revenue Service sees cybercurrency. It defines bitcoin as a form of property, and it may end up broadly applying that definition to other altcoins.1

As more and more businesses are taking digital currency payments, altcoins will remain economically viable. Analysts at Morgan Stanley, however, see the cryptocurrency rally slowing soon unless governments start to provide federal oversight for bitcoin and its ilk.3

If you are nearing retirement and marveling over the rise of bitcoin and ethereum, take a step back and consider the risk exposure of these investments. Putting any portion of your retirement savings in such a hugely speculative commodity is perilous. If it scared you when the S&P 500 lost half its value in the bear market of 2007-09, imagine investing in a cybercurrency and seeing 25-80% of the value of your investment erode in weeks. It has happened, and it could happen again.4

Altcoins are spicing up the investment world these days, but you may be better off with a plain vanilla portfolio.

GREG OLIVER [092304912370947139[057134579

1 - [6/5/17]
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3 – [6/15/17]
4 – [10/24/16]


Saving More Money, Now & Later

Saving More Money, Now & Later
You could save today & tomorrow, often without that penny-pinching feeling.



Directly & indirectly, you might be able to save more per month than you think. Hidden paths to greater savings can be found at home and at work, and their potential might surprise you.

Little everyday things may be costing you dollars you could keep. Simply paying cash instead of using a credit card could save you four figures annually. An average U.S. household carries $9,000 in revolving debt; as credit cards currently have a 13% average annual interest rate, that average household pays more than $1,000 in finance charges a year.1

The typical bank customer makes four $60 withdrawals from ATMs a month – given that two or three are probably away from the host bank, that means $5-12 a month lost to ATM fees, or about $60-100 a year. A common household gets about 15 hard-copy bills a month and spends roughly $80 a year on stamps to mail them – why not pay bills online? Automating payments also rescues you from late fees.1

A household that runs full loads in washing machines and dishwashers, washes cars primarily with water from a bucket, and turns off the tap while shaving or brushing teeth may save $100 (or more) in annual water costs.1

Then, there are the big things you could do. If you are saving and investing for the future in a regular, taxable brokerage account, that account has a drawback: you must pay taxes on your investment income in the year it is received. So, you are really losing X% of your return to the tax man (the percentage will reflect your income tax rate).2

In traditional IRAs and many workplace retirement plans, you save for retirement using pre-tax dollars. None of the dollars you invest in those plans count in your taxable income, and the invested assets can grow and compound in the account without being taxed. This year and in years to follow, this means significant tax savings for you. The earnings of these accounts are only taxed when withdrawn.2,3

How would you like to save hundreds of dollars per month in retirement? By saving and investing for retirement using a Roth IRA, that is essentially the potential you give yourself. Roth IRAs are the inverse of traditional IRAs: the dollars you direct into them are not tax deductible, but the withdrawals are tax free in retirement (assuming you abide by I.R.S. rules). Imagine being able to receive retirement income for 20 or 30 years without paying a penny of federal income taxes on it in the years you receive it. Now imagine how sizable that income stream might be after decades of compounding and equity investment for that IRA.4

Many of us can find more money to save, today & tomorrow. Sometimes the saving possibilities are right in front of us. Other times, they may come to us in the future because of present-day financial decisions. We can potentially realize some savings by changes in our financial behavior or our choice of investing vehicles, without resorting to austerity.

1 – [7/13/17]
2 – [8/5/16]
3 – [2/7/17]
4 – [5/15/17]
GREG OLIVER 9878896896p896p896p896p896p896p9768

Do You Have a Financial Wellness Program

Do You Have a Financial Wellness Program?
Companies are luring & retaining employees with this key perk.


What do your retirement plan participants wish you would offer? Besides the chance to save and invest part of their paychecks, that is?

The answer could be “a little more help.” Last year, Charles Schwab surveyed workers contributing to the 401(k) programs it provides, and 46% wanted help “calculating how much I need to save for retirement.” Forty-three percent wanted assistance in “determining at what age I can afford to retire,” and 39% listed “figuring out what my expenses will be in retirement” as an item on their financial to-do list. Others wanted help with day-to-day financial matters, such as debt management and budgeting.1

Companies with 401(k), 403(b), and 457(b) plans are starting to respond. At some firms, basic enrollment pep talks on consistent contribution and explanations of asset allocation have been supplemented by degrees of financial coaching. This year, 59% of employers responding to an Aon Hewitt survey on the topic said that they were very likely to offer workers some form of financial wellness program beyond basic retirement saving instruction. This is up from just 30% of employers in 2014.1

Financial wellness programs can promote employee retention. When workers have money issues in their lives, both their health and performance may suffer. They may try to find a higher-paying job, effectively reducing their commitment to their current one.

Fundamentally, these programs teach financial literacy. Most people need more of that, including high earners. Corporations such as Activision Blizzard, Havertys Furniture, Home Depot, and Waffle House have installed such programs, and made them free to employees wanting insight on everything from handling student loan debt to college planning to making long-term care insurance choices.1,2

Small businesses are offering these programs, too. Financial services professionals are coming forward to work with established and emerging companies seeking a perk to attract first-rate employees. This financial coaching can take many forms, from group education to highly individualized counseling with the financial consultants assuming a fiduciary duty. Businesses would do well to ask about it, as employee loyalty is priceless.

Plan sponsors may also potentially lower their fiduciary risk by putting such programs into place. If employees change their financial behaviors and believe that they are improving their personal finances as an effect of a financial wellness program, they may be less inclined to complain about a company’s retirement plan offering – or worse, initiate legal action on grounds that the plan sponsor failed to meet its fiduciary responsibility. No business wants that.

Does your company lack a financial wellness program? Consider establishing one in the near future. If your competitors have not yet taken that step, chances are they soon will.

GREG OLIVER 0[98789789p98p96968/
1 - [6/11/17]
2 – [7/11/17]




“I’m an optimist. It does not seem too much use being anything else.”

– Winston Churchill


Study the I.R.S. hobby loss rules if you want to write off self-employment losses. You may regard your venture as a business activity or a trade, but the I.R.S. may deem it a pastime you simply take part in for personal pleasure.

A review of Q1 2017
The opening quarter of 2017 was a historic one for Wall Street as the Dow Jones Industrial Average topped 20,000 for the first time. Equities rallied through January and February, then lost momentum in March; even so, the S&P 500 had gained 5.53% YTD when the quarter ended. The Federal Reserve raised the federal funds rate for only the third time in a decade, in response to strengthening inflation pressure and other signals of economic acceleration. Consumer confidence remained high. Commodities had a decidedly mixed quarter. New home sales improved, while existing home sales tapered off. The U.K. took another step toward its Brexit; the U.S. left the Trans-Pacific Partnership. Wall Street kept its hopes up for tax reform and lighter business and banking industry regulation.1,2

As the stock market climbed, so did the Conference Board’s consumer confidence index. By March, it had reached an astonishingly high mark of 125.6. The University of Michigan’s household sentiment index declined from 98.5 to 96.9 across the quarter, but it remained well above its historical average of 86.0.3,4

Factory and service sectors expanded nicely during Q1, according to the Institute for Supply Management. The Arizona-based organization’s manufacturing purchasing manager index was at 56.0 in January, 57.7 in February, and 57.2 in March. Its service sector PMI (the March number was not available at this writing) came in at 56.5 in January and 57.6 in February. All these numbers indicate solid growth.5,6

One other sign of economic growth, of course, is inflation. In Q1, it became more palpable. By February, the Consumer Price Index had risen 2.7% in a year (the annualized advance on the core CPI was 2.2%). Producer prices were up as well. The headline PPI showed a 2.2% yearly advance in February, with core prices gaining 1.5% over 12 months.3

Currently available data shows tepid consumer spending at the beginning of 2017. Personal spending was up just 0.2% in the opening month of the year and only 0.1% in February. Consumer incomes, however, rose 0.5% in January, then 0.4% in February. Households sent headline retail sales 0.6% higher in January, but only 0.1% a month later. There were gains in durable goods orders in both January (2.3%) and February (1.7%).3,7

January’s Department of Labor jobs report showed the headline jobless rate at 4.8% and the U-6 rate measuring underemployment at 9.4%; a month later, those unemployment rates were respectively lower at 4.7% and 9.2%. Hiring was strong in both January and February, with 238,000 net new jobs added to payrolls in the first month and 235,000 net new jobs added in the second.8

All this data encouraged the Federal Reserve to make its first interest rate move of the year. On March 15, it announced a widely expected, quarter-point hike, taking the federal funds rate to a target range of 0.75-1.00%. As Fed chair Janet Yellen told the media after the policy announcement, “The simple message is, the economy is doing well.” Investors who assumed the hike was coming scrutinized the Fed’s dot-plot forecast for any 2017 changes; they did not find any. Two incremental rate increases are still projected before the year ends.9

Elsewhere in Washington, President Donald Trump signed an executive order commissioning a review of the Dodd-Frank Act. As Q1 ended, hearings on portions of Dodd-Frank were set to start in early April, with a chance of reform legislation being introduced in Congress during Q2.10

In late March, the United Kingdom formally triggered Article 50 of the Lisbon Treaty – the beginning of the Brexit, if you will. It now has until April 2019 to negotiate the terms of its departure from the European Union. Will it retain single market access after the Brexit, so that its citizens can keep working and living in other E.U. countries without visas? Or will it make a “hard” Brexit, a divorce dictated by court decisions and/or World Trade Organization rules that would cause its people to lose E.U. citizenship rights? In April, the negotiations begin. The euro area jobless rate stood at 9.5% as of February, a low unseen since May 2009. Eurostat estimated an inflation rate of 1.5% for the euro area for March, an 0.5% decline from February.11,12

As the United States left the Trans-Pacific Partnership during the quarter, Asia-Pacific nations seeking a regional trade pact turned to Plan B – Plan B being the Regional Comprehensive Economic Partnership. This free trade agreement, now in negotiation, would bring China, Japan, and India into an economic accord with 13 other Asia-Pacific neighbors, including some of the region’s poorest nations, such as Myanmar and Laos. Asia-Pacific manufacturing purchasing manager indices improved as Q1 ended, with China’s official PMI advancing 0.2 points to 51.8 in March for its best reading since April 2012. Japanese and Indian factory activity also accelerated in March, with India’s PMI hitting a 5-month high.13,14

As of March 31, the five best YTD performers among consequential global stock indices were Argentina’s MERVAL at +19.8%, Spain’s IBEX 35 at +11.9%, India’s Sensex at +11.2%, the MSCI Emerging Markets at +11.1%, and Singapore’s Straits Times at +10.2%. There were other big quarterly gains: 7.9% for Brazil’s Bovespa, 7.2% for Germany’s DAX, 6.5% for Italy’s FTSE MIB, 6.4% for the Euro Stoxx 50, 6.3% for the Global Dow, 9.6% for Hong Kong’s Hang Seng, and 6.6% for South Korea’s Kospi.15,16

In fact, it is hard to find a marquee stock index that retreated in Q1. Scrutiny reveals two: Russia’s RTS slipped 3.3%, and Japan’s Nikkei 225 lost 1.1%. To round things out, China’s Shanghai Composite gained 3.8% in Q1; the United Kingdom’s FTSE 100, 2.5%; and the MSCI World, 5.9%.15,16

For metals investors, the first quarter brought much to cheer about. Investors in soft commodities had less to celebrate.

Palladium had a great Q1, rising 17.46%; aluminum was not far behind at 14.87%. COMEX silver ended the quarter at $18.28, gaining 14.50%. COMEX gold futures advanced 8.64% to settle at $1,247.40. Lastly, copper gained 5.84%, and platinum, 5.21%. Cotton led the way in ag futures with a 9.46% Q1 improvement; rice was next with a gain of 5.77%. CBOT wheat futures rose 4.53%, while corn futures added 3.48%.17,18

The quarter also saw some double-digit drops. Orange juice futures stumbled 20.75%; natural gas, 14.85%; and sugar, 14.10%. Other setbacks occurred for heating oil (8.89%), soybean oil (7.67%), WTI crude (5.81%), soybeans (5.07%), tin (4.56%), oats (1.86%), cocoa (1.46%), and nickel (1.39%). Oil finished the quarter at a NYMEX price of $50.85.17,18

Q: Did mortgage rates ascend or descend in the first quarter? A: They descended. On December 29, the average interest rate on a conventional home loan was 4.32%, according to Freddie Mac’s Primary Mortgage Market Survey. By the March 30 PMMS, it was just 4.14%. Similar declines were seen for the average rate on the refinancer’s favorite, the 15-year FRM (3.55% to 3.39%), and the average rate on the 5/1-year ARM (3.30% to 3.18%).19,20

Census Bureau data showed new home sales rising 5.3% in January and another 6.1% in February. Resales wavered, increasing 3.3% for January and decreasing 3.7% the next month, according to the National Association of Realtors.3

Regarding the sales numbers that matter most (the annualized ones), existing home sales were up 5.4% in the year ending in February; new home sales, 12.8%. In the second month of 2017, the median price for an existing home was up 7.7% from a year ago at $228,400. The median new home price was up at $329,900 as of December, but it had fallen to $296,200 by February.21,22

What did other key real estate indicators do in the quarter? Housing starts and building permits went in opposite directions. Starts fell 1.9% in January, then rose 3.0% a month later; permits advanced 4.6% for January, but retreated 6.2% in February. NAR’s pending home sales index rose 5.5% to 112.3 in February after slipping 2.8% in January. Finally, January’s 20-city S&P/Case-Shiller home price index arrived in late March, revealing an 0.2% monthly improvement and a 5.7% annualized advance.3

On March 31, the key U.S. equity indices settled at these levels: Dow, 20,663.22; Nasdaq, 5,911.74; S&P 500, 2,362.72; Russell 2000, 1,385.92. The Russell did not quite gain as much as the big three in Q1 – it was up 2.12% YTD when March concluded. The CBOE VIX? It finished Q1 down 11.89% YTD – in fact, it was the worst performer among significant indices. The PHLX Housing Index was the quarter’s best performer, gaining 11.96%; the Nasdaq 100 was a close second, advancing 11.77%.2

Some truly remarkable things happened in Q1. The Dow closed at a record high for 12 straight trading days – a feat that last occurred in 1987. The blue chips also went on an 8-session losing streak for the first time since 2011. As the table below shows, the Nasdaq gained more in three months than it did during all of 2016.1

DJIA +4.56 +13.42 +16.84 +6.73
NASDAQ +9.82 +7.50 +21.39 +14.41
S&P 500 +5.53 +9.54 +14.71 +6.63
10 YR TIPS 0.43% 0.16% -0.09% 2.25%

Sources:,, – 3/31/172,23,24,25
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

With this great quarter now history, investors wonder what to expect out of Q2. A bullish outlook still predominates on Wall Street; though, questions linger. Is the market overbought, with a correction ahead? Is the market at a top? How much of a lift can stocks get from this next earnings season? Unless yearly earnings growth is dramatic, perhaps only a minor one. The stock market has once again outperformed the economy, but that has not troubled Wall Street to significant degree. This old bull market has already surpassed analyst projections – in March, Fortune reported that the consensus forecast for 2017 had improved to a yearly gain of somewhere between 4-10%. Could the bulls run all through this next quarter and, perhaps, for several more to come? As CFRA chief investment strategist Sam Stovall recently commented, “Bull markets don’t die of old age, they die of fright. And what they are most afraid of is recession.” With no hint of recession on the near-term horizon, the upward stock market trend may continue through spring.26

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