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What's Happening Now

Take a mini-retirement
     
Should you take a mini-retirement? In the last few years, there has been a lot of attention given to the idea of lifestyle design. As part of this attention, more people are taking career sabbaticals.  Here are some things to think about.    

Winnie the Pooh banned!

Winnie the Pooh banned from a Polish playground!  Is it something he said? 

 

Aging population in Japan.jpg

Are you concerned about the fact that the world population is aging? If so, you're likely to live in Japan
 
  How to get fired from Google

Could you get fired from Google?  Here's how (without doing anything illegal).
   Get children to do better in school
This father bribes his son to do better in school without using money.  You might get some ideas
 
iWatch
      
The apple iWatch will appear soon and developers are fast at work on exciting new apps.  HOWEVER, there is one big catch.

  Beer is good for you

Good news for beer drinkers - eight reasons why beer is good for you.
 
Christmas credit card traps  

As consumers gear up for holiday spending, they'll have plenty of opportunities to get into trouble with credit cards. Credit-card users can find themselves with lower credit scores, high interest payments and more. Here are the credit-card pitfalls  you need to avoid.

        Millennials work span       
Millennials will comprise nearly half (45%) of the U.S. workforce, the largest generation of American workers.
You'll be astonished at how soon they expect to move on to the next job. 

Smart Service World Future Project     
 
The Smart Service World Future Project may develop a way for you to check, on your smartphone, what's in your refrigerator while you're in the grocery store.  What else does this highest of high tech groups have in store for us?

  Stop elephant slaughter        
The toll taken by elephant slaughter is appalling. Over 40,000 African elephants are killed each year so that ivory can be sold in curiosity shops in China and around the world! Find out here what's being done and how you can help.

  Facebook at Work

Facebook's latest innovation,"Facebook at Work" could rival LinkedIn and change the way you do business.



Get ready to have many of the health rules you've clung to over the years (either from mom or by word of mouth) debunked.  Here are 20 that are sure to surprise, from "bundle up before going outside or you'll catch a cold" to "take your vitamins!" 

Decreasing legroom in airlines

Why is airfare going up even as costs are going down? Now even JetBlue is planning to cut down on leg room.  Are they prepared for consumer reaction?

 
December 2014
JoeSrNewJune12
Chornyak & Associates is preparing for a joyous holiday season and we extend our personal wishes that your celebration will be rewarding and happy.



This month I want to be sure you are aware of an important service provided by Commonwealth Financial Network: Investor360�. It's a useful and thorough way of keeping in touch with your investment account(s) that will give you deeper insight into how things are progressing.  Extra enhancements have been added recently to let you focus in on a specific time period and customize the view of your investment history. To sign up for this service, you need an ID number and password provided by your advisor at Chornyak & Associates.

There are several articles that I found interesting and even surprising, especially the fact that beer is good for you! I had been told that by some German friends, but remained doubtful.  Don't miss our short-takes sidebar.

Please contact us with questions or comments.  We enjoy hearing from our clients and friends. Please let us know if there's any way we can improve our service to you: (614-888-2121 or 877-389-2121) or e-mail to: [email protected].

Happy holidays,

Joe  




Winter preparation checklist
Relax over the holidays  

Commonwelath Financial Network warns us to avoid making the end of the year more stressful than it needs to be. By checking some items off your list earlier, you'll be free to focus on what's important during the holidays-spending time with family and friends.

Are you ready for colder weather and the end-of-the-year rush? Consider using some of these tips to help you save money and time as winter approaches.

Ready your home and car
  • Heating and cooling account for almost half of home energy costs. Ensuring that your windows and doors are sealed tight and that you have sufficient insulation will go a long way toward keeping heating bills in check.
     
  • Have your home heating system serviced by a professional to avoid emergency problems down the road. Drain your irrigation system to ensure that water won't freeze in the lines. If you have an old furnace, consider upgrading to a more efficient model. You may even want to schedule an energy audit to help you identify ways to boost your home's efficiency.
     
  • Be sure to clean out your gutters. Clogged gutters can cause water to back up against the house, damaging roofing, siding, and wood trim. Debris-filled gutters can also lead to leaks and ice dams.
     
  • Check your car battery and tires. Be sure that your car's emergency kit is fully stocked with extra gloves, hats, socks, blankets, boots, washer fluid, a flashlight, a car charger for your cell phone, a shovel, and flares.
Shop smart
  • Get a head start on your holiday shopping. Making a list well ahead of time and budgeting for each item can help you cut back on spontaneous last-minute spending. Plus, fall can be a good time to find deals on certain items, such as appliances, patio furniture, jeans, candy, cookware, cars, electronics, and toys.
     
  • If you're traveling by air for the holidays, start looking for flights as soon as possible. You may find that booking one-way tickets on separate airlines is cheaper than purchasing a round-trip ticket from one carrier.
     
  • Make your supermarket points work for you. If you bounce from store to store, weigh the possible benefits of sticking to one during the holiday season and applying your points to a larger purchase.
     
Max out your retirement contributions
  • Are you taking full advantage of your retirement account? The end of the year is a good time to reevaluate your contributions based on what your employer is willing to match. Check the 2014 retirement plan limits below to ensure that you're making the most of your contributions.

Invest in your health
  • Don't put off getting in shape until the New Year-start now! Check with your employer and health insurance provider about discounts or reimbursements for fitness and wellness activities.
     
  • Review the balance in your flexible spending account (FSA). FSAs require special attention so that you don't lose unused funds at year-end. Under a new law, companies may allow employees to roll over $500 in FSA funds to the next year. Be sure to check the rules of your FSA plan and review your available balance.

Take a break
  • More than a third of companies don't allow employees to roll over vacation days into the next year. If this is the policy at your workplace, make a plan to take advantage of your vacation days before year-end.

Investor360�� - What's New!
Investor 360
 
Are you taking advantage of Commonwealth Financial Network's Investor360�?  Investor360� is a web-based application that contains portfolio information including topic areas such as Overview, Holdings, Activity, Statements, and Confirms. A Documents section allows your advisor to share documents with you. It also includes an Administration tab, where you can update your password, name, and security information.

Investor360� has been updated recently to give you even more access to the information you need.

Enhancements include:

1. View account information for a date range:

We've given you the ability to view your account balance,
holding, and activity information for any date range. You can select from standard options, which we've provided in the dropdown menu, or choose your own custom date range.

2. Account balances now grouped by type of account (i.e., retirement, joint, etc.):

This reorganization allows you to quickly locate specific account balances, as well as easily see the total value of each account type grouping.

3. Zoom in on account history going back to the date an
account was opened (see chart below):

You will still see three years of history by default on the Overview page. But now you also have the ability to view a specific period of time-going all the way back to when you first opened the account-by highlighting a time range on the
lower portion of the chart.

Investor360 investment history
4. Get holdings results faster and customize your view:

We've made adjustments to the Holdings page so that you get your position results faster. You also have the ability to customize this information in a way that makes sense to you. You can sort and change the order of the columns. You also have the ability to pick from more than 20 columns by clicking on the layout link.

5. Take advantage of more flexible activity views:

By clicking on the Activity Filter link, you can now choose to view items on the Activity page using any combination of the following filters: Type (Additions, Withdrawals, Buys, Sells, Dividends/Interest/Capital Gains, Income/Expense), Symbol/CUSIP, and Price.

6. Find information easily on the new Account Profile screen:

The layout of the Account Profile screen now displays information in three columns instead of two so that information is easier to scan and find.

7. Leverage the new Statements & Documents tab:

Statements, confirms, and shared documents are now centrally located in the Statements & Documents tab, making it easier for you to find what you need when you need it. Similar documents are grouped into folders, so advisors and clients both see the same
organizational folder structure, for ease of use.

8. Get easier access to your personal settings:

We've moved administrative functions, including personal
information and paperless preferences setup, to a central Settings page, which can be found in the header and is accessible from anywhere in Investor360�.

If you're not signed up for Investor360�, contact your advisor today at (614-888-2121 or 877-389-2121) to obtain your login ID and password.

Full information on how to manage the system and take advantage of all of Investor360�'s benefits, click here to view the complete User Guide.



Seven ways auto-pay can cause you trouble  

beware of auto payment.jpg  
Carrie Kirby of wisebread.com points out the pitfalls in setting up auto-pay accounts and how to vigilant.

 

Setting up automatic bill payments can be a great way to avoid late fees and save time. But if your attitude is "set it and forget it," auto-payments can also come back and bite you in the butt. (See also: 5 Ways to Automate Your Finances)


Watch out for these seven auto-pay betrayals.

1. Overdraft fees

Personally, I only set up automatic payments using my credit cards, not my checking account. The reason is that if my account is ever on the low side, I don't want to risk having an automatic payment sink me down into the red, triggering an overdraft charge. Consider setting up account alerts to notify you of low balances in order to avoid this snafu.

2. Account closure

A good friend was recently prey to the all-too-frequent scourge of credit card fraud. Her card issuer assured her she was not responsible for the fraudulent charges, so she wasn't worried about that. Her worry was that if she closed the account, she would have to call all her recurring billers - the gym, the cable company, etc. - to give them the new number. What's worse, if any of the billers mess up and don't switch to the new card number, you could end up with late fees on those accounts. And if you're me, you'll probably forget to notify at least one biller, and end up missing several payments before you realize your oversight.

3. Fraud

I had a stored-value card for our local public transit system, set to automatically replenish its funds from my credit card account. This is very convenient - for people who are good at keeping track of their card. I lost mine, and since I don't take public transit daily, it was a couple of months before I realized it was missing.

It was only after I noticed one month that our credit card had been billed for over $100 for transit card refills that I realized something was going on. Once I looked into it, I realized that my card had been used by someone else for several months and I had been defrauded by more than $300. I have an investigation pending with the system, and I have a new card - which is not on auto-pay.

4. Vendor errors or vendor fraud   

 

Once you have given a vendor your credit card or checking account number, they can, in some cases, continue billing your account - even more than you agreed to. Check out this Q&A cell phone company US Cellular had to publish last year to deal with the fallout after their auto-pay system went haywire and billed people for two months' service at once. Then there are disreputable companies that might sign you up for one service and then start billing you for things you didn't order. Read the fine print and double-check that no additional charges will be forthcoming without your express permission


5. Cancellation Difficulties   

 

This one happened to me with the phone company. I moved and canceled service, but they just kept right on charging my c redit card every month. At first, the charges went unnoticed in the chaos of a cross-country family move, but by the time I noticed it, I had to call customer service again and again before it stopped. Each month, the agent would say the problem was taken care of and that a refund was being processed. But the next month, lo and behold - I was billed again. Consider getting confirmation in writing of cancellations.

6. Forgetting to cancel

The flip side of the above is when you put a service on auto-pay, then completely forget you are paying for it. If you don't study your credit card bill or bank statement carefully each month, you might pay for years of that music streaming service or beer of the month club without remembering that you never listened to it or you stopped drinking beer.

7. Lack of vigilance


When you have to manually pay a bill each month, you tend to look at the amount you're paying and the statement. When I pay my electric bill, I compare it to the past month and the year-before's bills, and if it went up, I think about what we might have been doing differently to use more electricity. But I tend to slide on watching bills that get paid automatically, like our phone bill. Even if we still receive a paper statement, if I know the bill is paid it's too tempting to just recycle the bill without opening it. This could lead to unpleasant surprises if your bill goes up or fluctuates. Fight the temptation to ignore the amounts billed, and pore over your statements on occasion. You might be glad you did.   

 

 

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.

Market Update
Market Watch

Strong month for U.S. markets

After a volatile October, U.S. stock markets turned in a very strong November, with almost all indices showing strong gains. The Dow Jones Industrial Average was up 2.86 percent for the month, while the S&P 500 Index showed a slightly smaller gain of 2.69 percent. The Nasdaq was the champion again, gaining 3.47 percent.

The best-performing stocks were those of large companies, with smaller firms achieving much smaller gains or even losses in the case of the smallest stocks. Although the U.S. markets in general did well, turmoil in the rest of the world continued to raise investors' focus on risk, which made smaller companies less attractive.
 
The gains for most markets were driven by strong fundamentals. Per FactSet, as of November's end, with 99 percent of companies reporting in the S&P 500, more than three-quarters had beaten estimated earnings and almost three-fifths had announced higher revenues than expected. The earnings growth rate for the third quarter came in at 8 percent, much higher than the 4.4 percent expected at the end of the quarter, due to positive earnings surprises. Gains in the market were supported by growth in actual earnings.

Markets have also been well supported technically. All major indices are well above their 200-day moving average trend lines, often a sign of continued strength. Seasonal factors are also supportive, with the end of the year historically a strong time for the markets.

U.S. fixed income also did well, with the Barclays Capital Aggregate Bond Index up 0.70 percent for November. Performance was driven by a decrease in rates, as the U.S. Treasury 10-year bond yield dropped from 2.36 percent at the start of November to 2.18 percent at month-end. Low yields in Europe and Japan, resulting from economic weakness, acted as an anchor on U.S. rates.

International markets did not fare as well. The MSCI EAFE Index, which covers developed countries outside the U.S., gained 1.36 percent, but it wasn't enough to make up for its loss in October. The MSCI Emerging Markets Index, on the other hand, declined 1.12 percent for the month, erasing its October gains. Technically, both indices are trading below their respective 200-day moving averages, suggesting potential further weakness ahead.

U.S. economy strong but exhibiting signs of slowing

The U.S. economy continued to improve. Economic growth for the third quarter was revised up in November to 3.9 percent from an already strong level of 3.5 percent, driven by higher-than-expected consumer spending and business investment. Consumers in particular have benefited from lower gasoline prices.

Employment numbers continued to show substantial growth. November marked another month of more than 200,000 job gains-214,000 to be exact, plus a revision upward of an additional 31,000 jobs for previous months. The Employment Cost Index, a better proxy for wage growth than the more commonly reported numbers, grew at very high levels for the second month in a row, and the level of voluntary quits rose to a six-year high. Business confidence remained high across the board. Additional supporting factors for continued growth include low oil and gas prices, which should help support consumer spending.

Coming after the October end of the Federal Reserve's bond-buying program, November's results were subject to concern and uncertainty, but they showed continued growth nonetheless. One potential area of concern was reports of slowing toward month-end. Although still high, consumer and business confidence surveys reported pullbacks, and employment figures also showed declines, though remaining at healthy levels.

Much of this can probably be attributed to weakness elsewhere in the world, rather than in the U.S., as export markets weakened. The question going forward will be whether the U.S. can continue to grow in the face of economic weakness around the globe.

Rest of world continues to weaken

Japan, for example, announced an unexpected return to recession last month and followed that with an announcement of a greatly expanded quantitative easing program designed to create inflation and reduce the value of the yen. This program is an expansion of previous programs, which have not succeeded in accelerating growth, and suggests a real chance that the Japanese economy will continue to grow slowly, at best.

Similarly, Europe, while not actually moving back into recession yet, has shown very slow growth levels. It remains quite possible that the continental economy will start to contract, as even German growth has declined and major economies such as France and Italy face the need to cut spending. Given these factors, Europe is approaching a decision about a quantitative easing program of its own.

Other countries with economic worries include Russia, which is suffering from low oil prices, as well as sanctions because of its actions in Ukraine, and China, which continues to report growth but at the cost of continued central bank-financed stimulus. In both cases, the likelihood is for slower rather than faster growth.

   

U.S. recovery moves forward despite headwinds 

 

The consequences of these factors will be to hurt U.S. exports, either through lower sales or a stronger dollar, and both are already happening. Exports are, however, a relatively small part of the economy, so any damage should be limited.

Further limiting the damage will be the positive effects of a stronger dollar. Among the largest of these is to make imports, especially oil, cheaper in dollar terms. Because prices are already down and U.S. oil production continues to grow (see chart), lower oil prices may be with us for a while. This could potentially boost growth enough that it offsets the losses from reduced exports.


The drop in oil prices could be a significant boost to U.S. growth. With a $10 change in the price of oil corresponding to roughly a 0.2-percent change in growth, the drop from $95 to $80 a barrel in October could add another 0.3 percent to growth in the next couple of quarters, on top of the already strong figures we now see. 

 

Geopolitical turmoil strengthens the dollar
Continued oil price declines are quite possible, not only from a supply-and-demand perspective, but also as a result of a strengthening dollar. As the price of oil dropped over the past three months, the value of the dollar compared with other currencies increased.

A strong dollar helps hold down the prices of all imports, including oil and commodities, and strengthens the purchasing power of the U.S. consumer. The dollar's appreciation comes from the growing strength of the U.S. economy, especially compared with the economies of other countries, as well as the Fed's decision to stop buying bonds, even as Japan continues to do so and the prospect of the European Central Bank starting becomes more likely. With the Bank of Japan's surprise decision at month-end to increase its bond purchases, and the ongoing economic troubles in Europe, continued dollar strength is likely, which should keep putting downward pressure on oil prices.

The downside of the strong dollar, however, is the probable negative effect on U.S. corporate earnings. Revenue from overseas, when translated to U.S. dollars, will be negatively affected, and this could be a headwind for earnings in the next couple of quarters. Overall, though, the net effect of a strong dollar could continue to benefit the economy and therefore the market.

For example, lower oil prices should put additional money in the pockets of American shoppers, with some estimates showing that a $0.10-per-gallon decline in the price of gas could drive another $120 per year, per consumer, in spending. With prices at current levels, that is material.

Positive trends should persist through year-end
Despite the many concerns in the rest of the world and the very real risks to the U.S. economy and markets, the signs at this point are positive. Trends for financial markets, employment, and economic growth are all positive. Moreover, even the risk factors-primarily the strong dollar and weakness elsewhere in the world-have offsetting advantages for the U.S. Still, the positive conditions have led to U.S. markets being richly priced and open to the possibility of a correction, as we saw in October.

Because of this, a diversified portfolio remains the best solution for most investors, with regular rebalancing to harvest gains from fully priced areas and to invest in areas that are more attractively priced. Despite the risks elsewhere in the world and current pricing levels here in the U.S., the long-term perspective remains the best one to adopt in an uncertain world.



Authored by Brad McMillan, Senior vice president, chief investment officer at Commonwealth Financial Network.

 

All information according to Bloomberg, unless stated otherwise.

 


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