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Chornyak & Associates moves up in Barron's rankings
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We are pleased to announce that not only did we make the Barron's list of the top 1,000 financial advisors in the United States, we moved up from number 24 to 18 on the Ohio list. The rankings are based on data provided by over 4,000 of the nation's most productive advisors. Factors included in the rankings are: quality of practice, regulatory record, philanthropic work, along with assets under management and revenue produced for the firm. Investment performance is not an explicit component because not all advisors have audited results and because performance figures often are influenced more by clients' risk tolerance than by an advisor's investment-picking abilities.
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Five things to know about car leases
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 Do those car-leasing ads on television look tempting? You can get great deals on car leases these days, but a few wrong turns will cost you. Zain Asher of CNN Money tells you what you need to know:1. Leasing is especially attractive today.The cost of a lease is the difference between what a vehicle is worth now and what it's expected to be worth when you return it (the residual value), plus interest and fees. The more a car is forecast to hold its value, the less you pay. "Manufacturers believe the supply of used cars is on the low side, so they've priced residual values higher," says Jesse Toprak of TrueCar.com. You can lease some new cars for less than the loan payments on a gently used model. 2. You can negotiate any lease offer.A dealer will typically drop the sticker price (called the capitalized cost) by at least 5% if you haggle, says Alec Gutierrez at Kelley Blue Book. Even the "money factor" -- the number that determines your interest rate -- is up for grabs. But you'll have to scour the fine print to find it so you can compare offers (lower is better). With today's low rates, though, agreeing to put more money down in exchange for a price break may not be a good deal. 3. Long-term leases can cost you more in the end.Leases often last three years, but some car makers let you stretch payments out longer. Toyota has five-year deals on the Yaris, Corolla, and Camry. Steer clear. Most comprehensive warranties last three years, which could leave you with costly repairs, says Ronald Montoya, consumer advice editor at Edmunds.com. Plus, car makers want you back for new wheels, so short leases are more likely to be subsidized. 4. You need to dodge a few costly traps.Leases cap the miles you can drive -- typically 10,000 or 12,000 a year. Travel more, and you'll owe as much as 20� a mile later. Heavy drivers can save by paying $10 or so more a month for a higher mileage cap. Also, you may have to pay extra for gap insurance, which covers the difference between the insured value and the higher amount you may owe the leasing company if you total the car. Dealers typically include it for free, but banks don't always. 5. An early exit is easier than ever.Assuming the car maker lets you transfer the lease (Honda allows you to do so only under special circumstances; BMW bans it in the final six months), you can find a new owner at sites like LeaseTrader.com and Swapalease.com. With used-car prices high now, you have another option, says Toprak. Make the remaining lease payments, buy the car for its residual value, and then resell it. In today's market, says Gutierrez, "you might be able to end up with a profit." |
Money-saving secrets of super savers
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 Money Magazine interviewed 100 dedicated savers to learn their stories and find out the tactics they employ to save 35-60% of their income. All of these couples and individuals are well on their way to a very comfortable early retirement.1. They set goals, and they make them specific.Behavioral finance experts have found that earmarking accounts for particular goals can have a dramatic effect on savings rates. In a 2009 study, Amar Cheema of the University of Virginia and Dilip Soman of the University of Toronto found that labeling a college fund with the child's name nearly doubled how much was saved. "When you know what you're saving for, it's close to your heart and you'll feel regret if you stop," says Cheema. 2. They live below their means.They purchase homes and cars based on what they need versus what they can afford. 3. They delay gratificationSuper savers don't make impulse buys and often save for months in order to pay cash. 4. They avoid debt.They pay cash, even on big ticket items like cars and houses avoiding thousands, even tens of thousands in interest. 5. They save on the everyday expenses.They are diligent in comparing prices, clipping coupons and scouring Craigslist for deals. 6. They have multiple streams of income.The have two salaries, live on one and save the other. Or if they are a single income earner they have a side hustle to earn extra cash. 7. They track their spendingIn a study of 50 undergraduates, Amar Cheema had students write down every expense for a month. All 50 cut their spending that month by an average of 14%. Six months later, 34 of them were still spending less. 8. They automate savingThey automatically fund 401K, Roth IRA, 529 and savings accounts. They don't miss the money because they never see it. How about you? Do you employ any of these strategies? |
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Helpful tools for preparing your 2012 tax return.
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With April 15 on the horizon, we wanted to let you know that, if you're using the popular tax software TurboTax�, Investor360�� can save you time and aggravation by gathering and accurately inputting the investment account information you'll need to complete your federal tax return.
Take a look at this helpful brochure for instructions on how to access, select, and import everything you need safely and easily.
We hope this makes preparing your return for 2012 just a little less stressful. As always, we encourage you to call us with any comments or questions that you may have.
We prepare nearly 400 tax returns for our clients every tax season and would be pleased to assist you with yours. However, if you prefer to go it alone, or if you're already working with another tax professional, we want to offer a couple of helpful tools that will save you time and streamline the process.
If you plan to use either the web-based or desktop version of TurboTax, you can now import your tax information from Investor360˚.
With just a few short steps, all the key tax data you need are safely, accurately, and easily transferred directly into your electronic return.
With Investor 360˚ and TurboTax, you'll do away with:
- the need to gather together a year's worth of statements
- the task of keying in data from multiple sources
- the worry associated with either missing or incorrectly transcribing important tax information.
As you may already know, one of the more difficult schedules to create is the one required to claim the portion of dividends earned from U.S. government securities, which may be tax exempt at the state level (Ohio, for instance).
Chornyak & Associates tax professionals have prepared an Excel worksheet to assist in this calculation, which we would be happy to e-mail to you or your tax professional for use if requested.
We are pleased to provide a full service of financial and tax planning assistance to our clients, so don't hesitate to ask for our help. Contact us by phone at 614-888-2121, toll-free at 877-389-2121, or e-mail: chornyak@chornyak.com.
If you haven't already signed up for Investor360�, there's never been a better time to do so. Just give us a call to get started.
We're here to help,
Joe
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What's happening now
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Google has released its second teaser video for Google Glass, the company's futuristic augmented reality glasses that may be slated for release later this year. THIS IS AMAZING! Click here to see what it's like to video the world through your own glasses. Old, used iPhones can bring you up to $200 each.
Get out a pen and some paper and write down what you think are the 10 worst American cities for driving. Then check your guesses with this list. Hint: L.A. isn't number one.
The U.S. auto industry is actually very good at the three Rs of green credibility: reducing, reusing, and recycling raw materials, and has been for a while. Click here to learn why.
What are the 20 most miserable cities in the U.S. for 2013? Ohio has three on the list, but so does Michigan, including number one.
Shopping when you are sad may be more like bad medicine than therapy.
A study published in the journal Psychological Science found that sadness causes people to make poor financial decisions.
If you haven's filed your 2012 tax return yet, you should view this slideshow of the most overlooked tax deductions. Did you know that if you are self-employed, you can deduct Medicare premiums?
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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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March 2013
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The Barron's magazine top financial advisor rankings are out again for this year, and we are proud to be in the national top 1,000, as well as having moved up to number 18 in the Ohio list. We want to thank our clients for keeping us in this elite group.
Sometimes offers for automobile leases look too good to be true, so we thought our readers might like to get the lowdown on the ins and outs of the process. In some cases you may be able to transfer the lease. Make sure you take a look at the article from CNN Money. What are the habits and characteristics of "super savers?" Are you one of them or do you aspire to be? Money magazine recently did a national survey and discovered what these people have in common. You might get some ideas for your own savings habits by reading more about this group. We hope you are aware that Chornyak & Associates offers you a helpful tax-preparation tool. If you hold accounts directly with us through Commonwealth Financial Network and use the web-based or desktop version of TurboTax, you can import your tax information from Investor360�. Read the article below for more information on how you can transfer your key tax data directly into your electronic IRS return. Google's new augmented reality glasses are causing quite a stir. The 20 most miserable cities in the U.S. have been named. The idea of using shopping as a "therapy" has been debunked. All of this and more in this month's "What's happening Now?" section.
Please feel free to contact us at 614-888-2121 (or toll- free 877-389-2121), or send an e-mail to:
chornyak@chornyak.com if you have questions about investing or your personal financial matters. We are here to serve you. Sincerely, Joe
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Market Update
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Markets take a roller-coaster ride
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After a strong January, the markets started February in much the same way but ran into trouble in the middle of the month. In the end, U.S. markets still finished in the black, although international markets were not as lucky. The S&P 500 Index rose 1.36 percent, closing at 1,514, somewhat below its mid-month high of 1,530 but well above its low of 1,487. The wide swings reflected investor recognition of the continuing risks in Europe and in Washington, DC. The results of the Italian elections, pending sequester spending cuts, and uncertainty surrounding the recent Federal Open Market Committee (FOMC) meeting minutes all contributed to the volatility.
U.S. corporate earnings remained strong, with about two-thirds of S&P 500 companies beating expectations and about one-fourth of them missing the mark, which was in line with previous quarters. Valuations continued high based on longer-term metrics, but they also appeared fair based on shorter-term metrics. Given the rise in valuations, investors will likely begin to look to earnings growth rather than multiple expansions as a source for continued stock gains.
Technically, the S&P 500 remained above its 50- and 200-day moving averages, and, despite the dips in the middle of the month, there doesn't seem to be any technical reason to expect a decline. There does, however, appear to be a resistance level at 1,565, the index's high-water mark, which it reached in 2007, suggesting that future gains might be challenging. As of month-end, the S&P 500 was only 3.4 percent below its 2007 high.
International markets got hit harder than U.S. markets, reflecting their greater exposure to European political and economic problems. The MSCI EAFE Index posted a loss of 0.95 percent for the month, while the MSCI Emerging Markets Index declined even more, losing 1.35 percent. Among the factors affecting foreign markets were the results of the Italian elections, which were interpreted as a vote against the country's austerity-based economic stabilization plan. This raised the possibility that the eurozone might face another political crisis.
Events in Asia also contributed to weak performance in the international markets. The Japanese plan to boost inflation and weaken its currency pushed the Nikkei average higher. China, however, led emerging markets downward, as manufacturing slowed and investors worried about central government efforts to contain property prices. Temporarily, both the MSCI EAFE and the Emerging Markets indices fell below their 50-day moving averages. Although both bounced back, this suggests that further weakness is possible.
Long-duration bonds performed very well in February, as the 10-year U.S. Treasury yield contracted from 2.01 percent at the beginning of the month to about 1.9 percent at its end. But the movement wasn't uniform across the yield curve, as short-term rates actually rose slightly. Treasury yields had been on an upward trajectory since last December, with investors leaving safety assets in search of higher returns. This trend was reversed somewhat last month, as a minor flight to safety occurred. The Barclays Capital U.S. Aggregate Bond Index returned 0.5 percent. On a sector basis, investment-grade bonds performed best, while Treasury Inflation-Protected Securities (TIPS) and mortgages lagged.
U.S. economy continues to strengthen
Despite market turbulence, the U.S. economy continued to strengthen, as 157,000 new jobs were added in January. Even more encouraging were upward revisions to previously released data, which showed that payrolls had increased at an average monthly rate of 201,000 jobs in the fourth quarter of 2012. This was much stronger than had been thought. Other revisions showed much stronger job growth throughout 2012. Although employment is still well below its historic peak, the trend is clearly moving in the right direction.
Housing also continued its recovery, with price increases accelerating and available supply continuing to decline. Sales of new homes sped up as well, as the supply of existing homes diminished. Improvements in home prices, stock prices, and employment opportunities also caused consumer confidence to rise for the first time in four months.
But the news was not all good. Negative factors included tax increases and the steady rise in gasoline prices, which served to reduce consumer incomes. In light of these, the tiny 0.1-percent increase in January retail sales was actually a fairly positive development.
Watch out for Washington, DC
Washington continued to grab more than its fair share of headlines. Although fiscal-cliff tax increases were seemingly absorbed smoothly, sequester spending cuts were scheduled to hit the economy in early March. Despite ratcheting up the rhetoric, politicians on both sides of the aisle seemed resigned to allowing the cuts to proceed. Like the tax increases, however, this will be a one-time hit, which will hopefully be absorbed by growth in other areas.
Less easily tolerated would be a decision by the Federal Reserve to back off of its bond market intervention. The most recent release of FOMC meeting minutes spooked investors, who learned that some committee members had concerns regarding the effectiveness and long-term effects of continued debt purchases. Nevertheless, most members still appear to believe that the economy is better off with continued monetary easing than it would be without it, so it appears that no policy change is imminent.
International risks resurface
As previously noted, some of the risks that plagued Europe last year have recently resurfaced. A Spanish government mired in political scandal, a newly split Italian parliament, and a 0.6-percent contraction in Germany's gross domestic product have all added to uncertainty-both political and economic.
Other areas of the globe also face headwinds. The China/Japan faceoff over disputed territory, North Korean nuclear testing, and the civil war in Syria are all geopolitical risks worth watching. One further concern has been the ongoing efforts by Japan and other countries to weaken their currencies, prompting talk of "currency wars." Although overstated, the risks of competitive devaluation are real and are likely to remain an issue.
Signs remain positive, but caution is still important
In spite of renewed risks, particularly in Europe and Washington, DC, U.S. stock markets closed the month with a gain. Investors can take comfort in continued U.S. economic growth and the persistent health of U.S. companies. Yet volatility is a reminder of the need for caution. Investors should continue to balance their long-term goals against their ability to tolerate the risks that come with investing.
Authored by Brad McMillan, vice president, chief investment officer, and Sean Fullerton, investment research associate, at Commonwealth Financial Network.
Click here to get today's market activity.
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