Are major US consulting firms such as Mckinsey, BCG, Bain, Booze & Company, and others with operations in China providing trade secrets to the U.S. government? China thinks so.
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Would you like to increase your reading speed to 1,000 words per minute? That means you could read War and Peace in a day. Here's how.
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Do you want to get back 96.6% of what you spend on a home upgrade? This article tells you which home improvements really pay off.
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Are we about to enter an era of Jetsons-like technology where everything in home can be controlled by the press of a button on a remote control?
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Is there a link between wealth and happiness? This article describes eight scientifically proven principles of happiness.
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 Eight things the world's most successful people all have in common - IQ is no replacement for hard work.
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The Pew Research Center's 2013 Global Attitudes survey asked 40,117 respondents in 40 countries what they thought about eight topics often discussed as moral issues. What are the issues and which ones are considered the worst?
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 We've outdone ourselves this month to give you a unique combination of practical, amusing, and surprising news in a vast variety of areas.
On the practical side, be sure to read Commonwealth Financial Network's report on how to save money on summer vacations and
the story on women as investors. The latter article you may not agree with, but, on the other hand, it may give you some useful information to consider,
Here at Chornyak & Associates we're sure that spring is here. A little optimism never hurts! Please contact us by phone at 614-888-2121 (toll-free, 877-389-2121) or e-mail at chornyak@chornyak.com. We'd be glad to have your opinion on any of our newsletter articles or to answer any financial questions you may have.
Sincerely,
Joe
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The budget traveler: Tips for booking your summer vacation online
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If a summer getaway is on your agenda, doing some online research is a great way to find deals. But is it better to book through a third-party travel website, like Expedia or Orbitz, or directly with the airline, hotel, or car rental agency? Although there's not always a clear-cut answer, using a variety of online tools can help you find a good value.
Let's take a look at some of the advantages and disadvantages of each method.
Third-party websites: An excellent starting point
- Convenience. These sites let you research options from a number of companies all at once, making it easy to compare prices. Plus, many offer handy features like price predictors that alert you if the cost of a particular flight drops.
Of course, using these websites as your sole vacation planner can have drawbacks. For example:
- Canceling or rebooking can be tricky. If your plans change, it may be difficult to get a refund or modify your reservations. Airline tickets booked through third-party sites may be nonrefundable. Be sure to understand the site's policies before you book.
- You may miss out on perks and promotions. Airlines and hotels often offer deals on their websites that aren't available anywhere else. You may also sacrifice some frequent flier miles or loyalty points by booking at a third-party site.
- Seating options are limited. Third-party sites usually can't guarantee airplane seat choices, which could be a problem if you're particular about the aisle or window seat.
Booking directly: Often the safest bet
Though using a third-party website is a great way to explore your options, booking directly allows you to avoid a middleman in the transaction-a valuable benefit if your plans change.
Other advantages include:
- The most up-to-date information. Besides running specials that aren't available elsewhere, the companies' own websites tend to have the most accurate pricing and availability information. Plus, purchasing directly with an airline helps ensure that you receive timely updates on cancellations or delays.
- Price matching. Companies like Delta, InterContinental Hotels, and Starwood Hotels offer best-rate guarantees to encourage travelers to shop on their sites. Delta, for example, will make up the difference and throw in a $100 travel voucher if you find a price lower than what's published on its website.
Third-party websites are a useful place to start your vacation research, and many offer great deals, but booking directly with the airline, hotel, or car rental agency may be your best bet if you want a good value and peace of mind.
© 2014 Commonwealth Financial Network®
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Things not to buy at a warehouse club
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The editors at Kiplinger tell us that shopping at warehouse clubs, such as Costco, Sam's Club, and BJ's Wholesale Club, is a great way to save money. However, consumers often make the mistake of assuming they're getting the best price at a warehouse club or of buying things they don't need just because the price is good.
When making your warehouse-club shopping list, keep these 11 items off it. You can find them cheaper elsewhere, or you won't reap value by buying them in bulk.
1. Books and DVDs
It's tempting to pick up books to read on vacation or DVDs for the kids while you're shopping at the warehouse club. But the deals on these items aren't as good as you can find elsewhere, says Andrew Schrage, co-owner of the personal finance blog Money Crashers. You can usually buy books, CDs and DVDs for 15% to 20% less online at sites such as Amazon.com, he says (and get free shipping on qualifying orders of $35 or more).
2. Clothing and Shoes
Just because an article of clothing or a pair of shoes is cheap doesn't mean you're getting a deal. There's a reason clothing and shoes sold at warehouse clubs are so inexpensive: Even with designer brands, they're often lower quality, using cheaper fabric and weaker embellishments, such as buttons and zippers, that won't last as long.
3. Condiments
That one-gallon jar of mayonnaise or three-pack of 44-ounce ketchup bottles might seem like a good buy if you're having a cookout or you eat sandwiches or burgers on a regular basis. But most condiments have a shelf life of only six months to a year, says consumer expert and Offers.com founder Howard Schaffer. Unless you're running a restaurant (or have a condiment-only diet), you probably can't consume such a large volume before it goes bad. Plus, you're not saving that much by purchasing condiments in bulk, Schaffer says.
Also be careful with bulk purchases of olive oil (which has a six-month shelf life) and spices (which are good for about a year).
4. Diapers
Generic diapers from the warehouse club can be a big money-saver because they work as well as the name-brand ones at a much lower cost. But if you're really pinching pennies, you won't find the best deal on generic diapers at warehouse clubs. In fact, they're typically about 4 cents more per diaper than Target and Walmart's generic diapers, says Lauren Ward, a research analyst for personal finance site CreditDonkey.com.
5. Electronics
The prices on televisions, computers and other electronics are good at warehouse clubs, but you usually can get even better deals elsewhere, says Offers.com's Schaffer. Comparing prices can be a little difficult because electronics sold at warehouse clubs tend to be bundled with accessories or have slightly different features than similar models sold at other retail outlets. So you might not find the same product, but you'll likely find something similar for 10% to 15% less at Best Buy, Sears and other electronics retailers.
6. Liquid Bleach and Detergents
These products lose their efficacy after six months, says RetailMeNot's Bodge. So if you don't have a big family and don't wash lots of laundry, you won't get through a warehouse club's supersize bottle of bleach or detergent fast enough. Instead, Bodge recommends looking for deals on these items at the grocery store or big-box store. The dollar store also is a great place to buy cleaning supplies.
7. Name-Brand Cereal
Warehouse clubs' prices on name-brand cereal are comparable to cereal prices at grocery stores, Ward says. However, warehouse clubs generally don't have sales on cereal. So you're better off stocking up on your favorite cereal when it goes on sale at the supermarket, she says.
8. Milk
You usually can buy a gallon of milk for 50 to 60 cents less at the grocery store, Ward says. Plus, you can find this perishable item in much smaller quantities at the grocery store, which will lower the risk of it going bad before you can drink all of it.
9. Paper Products
Although a warehouse club might seem like the logical choice for a big pack of paper towels or toilet paper, consumer and money-saving expert Andrea Woroch says you'll actually get a better deal on paper products at the grocery store the first and third weeks of the month, when they typically go on sale. She recommends using manufacturer coupons to get an even deeper discount.
10. Soda
You can always find soda on sale for less at a grocery store than at a warehouse club, says Jeff Yeager, author of four popular books on frugal living, including his most-recent How to Retire the Cheapskate Way. For example, Yeager says that Coke products go on sale every other week for $2 or $2.50 per 12-pack at the grocery where he shops. However, a 24-pack costs $7 or $8 at the warehouse club -- which can be twice as much as two discounted 12-packs purchased at the grocery.
11. Sunscreen, Lotions and Creams
These items are often cheaper elsewhere. Schrage says that you usually can find sunscreen at a drugstore for 10% to 15% less than at a warehouse club. Plus, if you're buying sunscreen just for a short beach vacation, you might not need the volume you'll be required to buy at a warehouse club.
Bodge also cautions against buying large quantities of beauty products -- especially facial cream -- at warehouse clubs because they have a limited shelf life. For example, anti-aging creams expire in three months to a year.
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Three major financial planning issues facing women
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Do you think that women deal with finances differently from men? Emily Guy Birken of moneyning.com proposes they do. Are these differences real or imagined? Judge for yourself.
There's no denying that men and women often come at financial planning from different perspectives. The reasons are varied - everything from cultural expectations to practical considerations. It's clear, however, that ignoring the differences between how men and women plan for their financial futures can put women at a disadvantage. Here are three money issues that often affect women, and how you can work around them: 1. Women live longer and tend to make less moneyThe pay gap between men and women has been in the news recently. It's disheartening, to say the least, that women still earn about 20% less than men do for the same job. This means women are already at a financial disadvantage in planning for retirement, as they have less money to put aside. Add to that the heartbreaking statistic that "80 percent of men die married and 80 percent of women die single," and it's clear that women have a big potential problem in planning for their financial future. Namely, they have to plan for a longer amount of time and will have less money to put away. Farnoosh Torabi, author of the new book When She Makes More, suggests that women should plan on being very aggressive with their retirement savings: "We need to make sure that we're really stocking our 401Ks, that we're doing everything we can to protect ourselves, that we have disability insurance, and that we take full ownership of our income." Unfortunately, this is easier said than done, with one reason being how women often view their money. 2. Women tend to think of their money as benefiting their familyWomen are often culturally encouraged to share their income with their family. On the surface, there's absolutely nothing wrong with this: of course you want to spend your income on your children, or to help out your elderly parents. The problem arises when a woman continues to feel responsible for family finances while neglecting her own financial future. She may feel as though she has no choice but to send money to her adult children, help pay for their college education, or bankroll her parents' retirement. Remember the standard airline advice to put on your own oxygen mask before assisting your child? It's also sound advice for women planning their financial future. You can't help your family if you're struggling, so take care of yourself before offering a hand to your family. It may feel cruel, but it is better for everyone. 3. Women are often intimidated by investingMany behavioral finance studies have shown that women tend to have less confidence when it comes to investing than men do. A Prudential Financial study on the phenomenon referred to it as "the confidence gap," and it can severely hinder a woman's investment portfolio. According to NASDAQ.com, "Women's lack of confidence can lead to inertia when making investment decisions, aggravating women's tendency to underinvest in risky assets." If you don't feel confident about your ability to make good investments, partner with a trusted financial adviser. Even if you never feel as though you can pick your investments by yourself, a smart and trusted adviser can help you realize your goals without having to step too far outside your comfort zone. (Though don't forget to vet your prospective advisers before working with them!) The most important thing to remember? No one else will care about your financial future as much as you do - so make investing in your future a top priority.
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This communication is strictly intended for individuals residing in the States of: AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, IA, IL, IN, KY, LA, MA, MD, ME, MI, MN, MS, MT, NC, NH, NJ, NV, NY, OH, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, 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.
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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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Market Update
A strong close to a quiet month
U.S. financial markets had a relatively quiet month, with little volatility, except for the Nasdaq, which was down close to 2 percent mid-month. All U.S. equity markets finished May strongly, however, with the Dow Jones Industrial Average up 1.19 percent, the S&P 500 Index up 2.35 percent, and the Nasdaq up an even stronger 3.11 percent, despite the mid-month drop.
The weak start to May was driven largely by earnings. Despite a 2.1-percent increase over the previous year, earnings growth for the first quarter was down significantly from the fourth quarter of 2013. In addition, earnings guidance from companies for the second quarter was much more negative than usual. On top of these factors, the U.S. economy suffered from severe weather, with poor data points reported during the first part of the month.
The strong close to the month owed a lot to the much stronger economic reports that became available toward the end of the period, which supported investor hopes for faster earnings growth later in the year despite the corporate warnings.
Technical factors remained supportive for the Dow and the S&P 500 after the weakness of April, but the Nasdaq broke below both its 50- and 100-day moving averages before recovering. In the broader context, this is not too worrisome, but the development is worth noting.
Developed international markets performed very similarly to the S&P 500, with the MSCI EAFE Index up 1.62 percent, partially closing the gap between international and U.S. returns year-to-date. Emerging markets showed very strong performance, with the MSCI Emerging Markets Index up 3.26 percent for the month, although earlier weakness this year means total performance for 2014 still trails developed and U.S. markets. Technical factors were supportive for both.
Fixed income markets showed surprising strength at the end of May, with an unexpected decline in interest rates. Yields on 10-year U.S. Treasury bonds dropped from 2.63 percent at the start of the month to 2.48 percent at the end, driving gains in the long end of the curve while causing underperformance in spread-based and shorter-duration products. The Barclays Capital Aggregate Bond Index was up 1.14 percent for the month.
Winter's last gasp as U.S. economy thaws
The revised gross domestic product (GDP) number released at the end of May showing that the U.S. economy had actually shrunk by 1 percent in the first quarter of 2014, rather than growing slightly, highlighted the difference between the first quarter and the past two months. While the economy suffered from severe weather in January through March, more recent reports have been substantially better.
April showed a gain of 288,000 jobs, the highest since January 2012 and much higher than expected. This gain was partially fueled by a rise in the number of private employees, which reached a new all-time high. Initial unemployment claims dropped to a seven-year low in April-another good sign of the strength of the employment market-and average hours worked recovered to normal levels following a drop in the first quarter. Housing prices continued to increase at double-digit rates, despite predictions of a slowdown. Construction did slow in the first quarter but showed signs of a recovery as weather warmed.
Given the strength of the employment and housing markets, consumer confidence unsurprisingly also continued to improve, with the significant result that confidence for those under age 35 recovered to pre-crisis levels for the first time. Rising confidence and employment led to further gains in consumer spending and increases in lending.
Because of all these positive factors, most economists expect growth in the second quarter to be quite strong-and to accelerate for the rest of 2014.
The Federal Reserve and interest rates
No news was good news from the Federal Reserve (Fed) in May. As the normalization process of the taper continues, the Fed reportedly remains confident in a strengthening recovery. A surprising drop in interest rates at the end of the month may call that view into question, but analysis of the supply-and-demand balance for Treasury securities suggests the drop is market-driven, rather than a sign of economic weakness to come. Even with the taper, the reduction in the federal deficit means that the Fed is still buying a large proportion of the total debt issuance-and that sustained Fed purchasing, combined with growing demand from other buyers, is pushing rates down.
International risk remains
Even as conditions in the U.S. improve, risk remains substantial at the international level. The recent elections for the European parliament led to a much higher number of parliamentarians representing explicitly anti-European Union parties, with results in both England and France described as political earthquakes. Although the slow European recovery continues, unemployment remains at depression levels in many countries, and the election results suggest that Europeans are running out of patience with current austerity policies. Expect to see considerably more uncertainty around Europe through the rest of the year.
China seems to be stabilizing and lowering perceived economic risks, but domestic terrorism has become much more prevalent, or at least reported, in the country. Perhaps in response to domestic concerns, China has become much more aggressive with respect to other nations, placing an oil rig in waters contested with Vietnam, which has led to direct naval confrontation. China's rise, which is leading Japan to consider a more aggressive defensive stance, continues to raise the geopolitical risk level.
Finally, even as Russia has seemed to pull back on Ukraine, it signed a multibillion dollar natural gas supply deal with China. This deal should benefit both sides but was explicitly designed to strengthen both countries in their dealings with the West. This could ratchet up uncertainty even further.
Back to the old normal
With the U.S. economy continuing to mend, and with the bulk of the risk coming from international issues, it almost seems as if we are moving back to the old normal. We are not quite there yet, but the absence of many of the crisis issues of the past several years seems to be leading the market to a potentially unhealthy degree of complacency.
It would be a mistake to take the current improvement in the real economy and appreciating financial markets as a sign that risk has disappeared. Although we expect the recovery to continue, financial markets remain richly valued and subject to correction risk. Further, both Europe and China retain the ability to generate negative surprises. Finally, even though the recovery seems to be strong, it could certainly weaken again.
We certainly acknowledge the positive changes-which are many and substantial-but we are not complacent and remain on the lookout for risk, as you should too. With that said, we believe that a properly diversified portfolio should allow investors to achieve their goals over time.
Authored by Brad McMillan, vice president, chief investment officer at Commonwealth Financial Network.
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