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Joe Chornyak interviewed at the New York Stock Exchange
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Money-Media, a subsidiary of the Financial Times, recently invited select economists and portfolio managers to a summit at the New York Stock Exchange for the purpose of sharing investment strategies among this elite group. The following video includes excerpts of an interview with Joe Chornyak, Sr., summarizing key questions discussed during this one-day exchange. Click on the image below to view the video. 
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New year's resolutions: Toning your financial health
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This article is provided by Commonwealth Financial Network. It's that time of year when many people set goals in the hope of changing their lives in the year to come. Whatever your plans, you may want to add a few small financial changes to your resolution list to help you turn 2012 into an even better year.
Pay down debt
As you start the year, make a plan to pay off debts with the highest interest rates first. Also, it's always wise to pay more than the minimum payment, so if you're financially able to pay a bit more, do so. You'll pay off your debt faster and save more on interest in the long run.
Increase your savings
Set a goal; perhaps you'd like to save for a dream vacation, a down payment for a new home, or an emergency fund to cover the unexpected. Then, establish a timeline for accomplishing the goal and outline a strategy for reaching it. You'll find the results easier to achieve.
Develop a budget
When developing your new "budget," it may help you to think of it as a spending plan instead. By planning out your food, entertainment, education, and other expenditures, you'll have a better understanding of where you're allocating your income and how much is available to spend on each activity.
Review your credit report
You are entitled to one free report a year from each of the three major credit-reporting agencies-Equifax, Transunion, and Experian. Use a website such as www.annualcreditreport.com to request your reports at the beginning of the year (or request one at a time throughout the year). This way, you can file disputes regarding any erroneous information, as well as evaluate how you might increase your overall credit health during the year. Click here to read the entire article.
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Important financial planning dates in 2012
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To help you prepare to manage your finances in 2012, we've put together a list of important financial planning dates to be aware of. You can mark them on that calendar you received as a gift. Or, better yet, you can enter them into your virtual calendar (where you can also set up reminders to keep you on track).January
Fourth-quarter (prior-year) estimated tax payment: If you are self-employed or have other fourth-quarter income that requires you to pay quarterly estimated taxes, the payment must be postmarked by January 17, 2012.
Federal financial aid: For students entering college in September, the new Free Application for Federal Student Aid (FAFSA) is available beginning January 1. Families should plan to complete the FAFSA form as soon as possible in January.
February
Nonfederal financial aid: The priority deadlines for most college scholarship and financial aid programs occur in early to mid-February. College-bound students should plan to submit their CSS/Financial Aid PROFILE applications by these dates.
March
Corporate tax returns: The filing deadline is March 15, unless you file for a six-month extension.
April
IRA required minimum distributions (RMDs): If you turned 70� during 2011, you have until April 1 to take that year's RMD. (You will also have to take your RMD for 2012 by December 31.)
Prior-year IRA contributions: Fund your retirement account for 2011 by April 15-the deadline for contributions to traditional IRAs (deductible or not) and Roth IRAs. If you have a Keogh or a SEP-IRA, however, and you get a filing extension to October 15, you can wait until then to put prior-year dollars into those accounts.
Taxes, taxes, taxes: Individual, gift, estate and trust, partnership, and estimated first-quarter tax returns are due in April. Talk to your tax professional to discuss which deadlines apply to you and get them on your calendar!
MayNonprofit informational return: The filing deadline is May 15. You may request two 90-day extensions to file. Extension deadlines are August 15 and November 15.JuneSecond-quarter estimated tax payment: If you are self-employed or have other second-quarter income that requires you to pay quarterly estimated taxes, be sure your payment is postmarked by June 15.September
Third-quarter estimated tax payment: If you are self-employed or have other second-quarter income that requires you to pay quarterly estimated taxes, be sure your payment is postmarked by September 15.
October
Recharacterizing a prior-year Roth IRA conversion: If you converted a traditional IRA to a Roth IRA during 2011 and paid tax on the conversion, October 15 is the deadline for recharacterizing (undoing) the conversion.
Medicare enrollment: October is open enrollment for Medicare Advantage and Part D prescription drug coverage plans.
Employee benefit plan enrollment: Open enrollment season begins for certain employee benefit plans. Take time to consider how much to contribute to a flexible spending account.
November
Student loans: The grace period for May graduates is coming to an end. Recent graduates still looking for employment may want to investigate their options for deferring payments.
December
Reporting a loss on the sale of stock: A trade to sell a long position must be executed by the close of the last trading date of the current year. A short position closing trade must be executed so that the trade settles by the final trading day of the current year.This is not an exhaustive list of all of the planning dates throughout the year. Call Chornyak & Associates to inquire about deadlines that are most relevant to your personal situation: 614-888-2121 or toll free 877-389-2121. Click here to view this article on our web site and bookmark for future reference.
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What's happening now
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A sushi restaurant from Yekaterinburg, Russia tried to establish a record making a 1.5-mile-long sushi roll. To make this megaroll, it took 60 chefs 1.5 tons of rice, 1,100 lb. of cucumbers, 14 thousand pieces of nori and 55 lb. of sesame. Click here to see more photos.
Fears about Europe's debt crisis will continue to dominate in 2012, as will concerns about slowdown in emerging markets, particularly China. To read about this and other investment concerns for 2012 click here. Sales of existing homes in the U.S. rose in November to a 10-month high, showing demand may be starting to stabilize following a plunge over the past four years that was steeper than previously calculated. Click here to read the article.
Nine completely worthless collectibles - sadly, Hummel tops the list. Click here to find out the other eight.
Issues to consider when developing housing for the next generation - Gen Y: smaller, energy-efficient homes near work. Click here to learn more.
Now is the time to buy a new car. Major U.S. and Japanese car manufacturers plan an average of 13% increase in prices for 2012, with Chrysler at 20.5% and GM at 21.2%. Read More.
How Germany builds twice as many cars as the U.S. while paying its workers twice as much. Click here.
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This communication is strictly intended for individuals residing in the States of: AL, AR, AZ, CA, CO, CT, FL, GA, IA, IL, IN, KY, LA, MA, ME, MI, MT, NC, NY, OH, PA, SC, TX, VA WI, WV. No offers may be made or accepted from any resident outside these States due to various state requirements and registration requirements regarding investment products and services. Securities and Advisory Services Offered Through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser Fixed - insurance products and services offered by Chornyak & Associates, LTD are separate and unrelated to Commonwealth. This informational e-mail is an advertisement. To opt out of receiving future messages, follow the "Unsubscribe" instructions below. Disclosures: Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor's. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The Dow Jones Industrial Average is computed by summing the prices of the stocks of 30 large companies and then dividing that total by an adjusted value, one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. The Russell 2000� Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Barclays Capital Aggregate Bond Index is an unmanaged market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The U.S. Treasury Index is based on the auctions of U.S. Treasury bills, or on the U.S. Treasury's daily yield curve. The Barclays Capital Mortgage-Backed Securities (MBS) Index is an unmanaged market value-weighted index of 15- and 30-year fixed-rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA), Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC), and balloon mortgages with fixed-rate coupons. The Barclays Capital Municipal Bond Index includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than 2 years) selected from issues larger than $50 million. The Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index measures the performance of intermediate (1- to 10-year) U.S. TIPS. |
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January 2012
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Our video portion this month consists of an interview I gave while attending a recent summit held at the New York Stock Exchange. I was asked to comment on such topics as new investment products, asset allocation, mutual funds, and investment challenges. Click here or on the image at the left to watch. This month we have some suggestions for financial new year's resolutions to help you get through a successful 2012. As with most undertakings in life, it is best to begin with a plan. The article will guide you through some steps you should take. The new year can also a time for making lists of important dates of financial deadlines which must be met during the upcoming 12 months. We've provided a month-by-month reminder of these deadlines. Make sure you read through the list to be sure you know about all of the milestones. You can bookmark and save a copy of the document by clicking here. Many of you seem to have enjoyed our new feature "What's Happening Now" containing short news items with links to longer articles on the Internet. Be sure to take a look at the quick takes in this month's selection - a mixture of amusing and interesting stories. Best wishes for a prosperous new year from Chornyak and Associates!
Please feel free to call or e-mail me with any comments or questions - 614-888-2121 (or toll free 877-389-2121), e-mail: Sincerely, Joe
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Market Update
| Market volatility persists
Sustained market volatility in November confirmed our outlook that large swings in asset prices were likely to continue. Equity markets traded mostly lower during the month, dragged down by concerns over the worsening European debt crisis. Indeed, stocks were set for a historically poor month of performance, but a strong three-day rally at month-end-which saw the Dow Jones Industrial Average gain 7.35 percent and the S&P 500 Index rise 7.69 percent-reversed the selloff.
When the dust settled, the Dow had gained 1.18 percent for the month; year-to-date, as of November 30, it is up 6.70 percent. The S&P 500 managed to gain back almost all of its earlier losses to finish down a nominal 0.22 percent for the month. Year-to-date, it is up 1.08 percent.
Global markets and risk assets
The fate of international equities was similar to U.S. stocks throughout much of November, although market movements, in either direction, were amplified. Troubles in Europe took center stage, causing global markets to whipsaw. In particular, the financial sector experienced extreme volatility because of its exposure to European sovereign debt. Despite a month-end rally, the MSCI EAFE was down 4.85 percent for November, leaving it 11.30-percent lower for the year.
The riskier MSCI Emerging Markets Index lost 6.75 percent for the month, leaving it down 19.37 percent for the year. Higher-risk assets in the fixed income space also struggled. The Barclays Capital U.S. Corporate High Yield Index was down 2.74 percent in November. Meanwhile, the more conservative Barclays Capital Aggregate Bond Index lost just 0.09 percent.
Concerns over Europe's debt intensify
Bond yields have risen to unsustainable levels across the continent-particularly in Italy-causing politicians to scramble for a plan to deal with the crisis. The accompanying chart shows how the yield on Italy's 2-year government bond has spiked. Because Italy's debt level is in excess of $2 trillion, it is extremely challenging for eurozone leaders to find a solution that won't harm European banks or slow already anemic economic growth.The central issue is actually more of a fiscal problem than a monetary problem. This means that it will have to be tackled by politicians and not simply dealt with by the European Central Bank. That said, central bank actions can still have an effect. On the last day of November, we saw coordinated intervention by central banks to inject liquidity into the eurozone. Global markets embraced the move and rallied sharply higher. Here in the U.S., markets saw their biggest up day since March 2009.
The fact that this simple step helped markets so dramatically is of real interest. It seems, at least for now, that investors are content with liquidity, even if the ultimate solvency of sovereign issuers remains in question.
Nevertheless, the longer-term problems still need to be addressed. As the largest European economy, the responsibility appears to have fallen on the shoulders of Germany. While measures such as bolstering the European Financial Stability Facility have helped, getting 17 eurozone countries to agree on anything has been difficult, to say the least. Germany itself is internally divided as to how much assistance it owes to its fellow European nations. Given these headwinds, we expect continued market disruptions to emanate from Europe.
Businesses cautious, mixed signals from consumers
A divergence appears to be developing in the U.S. economy. While businesses are showing signs of caution, consumers seem willing to spend. Black Friday sales rose 6.6 percent over the prior year, to an all-time high. Retail sales data has also been strong, although overall spending was lower than expected in October. Some economists have spoken of "savings fatigue" as a potential explanation for why Americans are spending despite negative headlines. This trend suggests that pent-up demand over the past three years could become a tailwind to U.S. growth going forward.
On the other hand, business management teams still have a vivid memory of 2008. The possibility of a second crisis could be causing them to be more vigilant in the current uncertain environment. Investment in inventories was weaker than expected in the latter half of the third quarter, causing a downward revision to gross domestic product (GDP) estimates from 2.5 percent to 2 percent, annualized. In addition, manufacturing and CEO confidence surveys have both demonstrated that business leaders continue to be conservative in their outlooks.
Setting aside measures of sentiment, the U.S. economy continues to toil along. Housing remains depressed, but manufacturing and the employment situation have shown small signs of improvement. Initial jobless claims have trended lower in recent months, and ISM manufacturing improved in November.
So, while the U.S. economy remains lukewarm, European debt and economic worries are likely to continue to drag on investor confidence. Bloomberg consensus estimates are for GDP to grow just 0.5 percent in the eurozone in 2012. Meanwhile, austerity measures have already pushed some periphery countries into recession; Portugal, for example, has experienced negative growth in every quarter this year.
Authored by Simon Heslop, CFA�, director of asset management, at Commonwealth Financial Network.
� Commonwealth Financial Network�
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