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What's Happening Now
unscrupulous auto mechanic
     
Do you turn up the car radio when your vehicle starts making a strange noise?  Here are some online suggestions for keeping your mechanic honest and repair costs down.
 
 


Soon you will have a new way 
to make money transfers online - via Facebook!

 

      
Don't be satisfied with a mere 1% back on credit card purchases. Some cards give you up to 6% back for certain types of purchases such as groceries. 
 
 


Lufthansa tragedy reveals European loophole in pilot screening. Should personality testing be required for airline pilots? 

  

 

     
American astronaut, brother-in-law of Gabby Giffords, begins history-making mission. NASA wants to know more about the impact of long-duration spaceflights on the human body.

 

     
Would you be interested in a $150 Windows 10-based laptop? Do you own and love a Chromebook or hate them?.

 
 

Which tax records should you keep and which can you get rid of?
 
 


Did you know that the average cost of a small dog in its first year is $1,314, while thew cost of a cat is $1,035. Here's how you can save on pet costs.

 


Surprising news about the dangers of feeding birds with an outdoor bird feeder.

  

 


Why a female Walmart employee was unexpectedly put on the on-call schedule and told by her supervisor, "If I see you here, I'm going to send you home."  

  

 


Protect your teeth. They have to last a lifetime. Here are the seven worst foods for your teeth.  

  

 

 
New way to get free hotel rooms without redeeming rewards: the best rate guarantee. 

  

 


New study: An apple a day may not keep doctor away.


 

 
April 2015

Joseph Chornyak, Sr.jpg
Do you still stand by time-tested proverbs? This month's What's Happening Now section in the left sidebar features an article on the questionable truth of the old "apple-a-day" adage. This section has lots of fascinating pieces, including one about the next space probe that will put a man in space for an entire year.

Are you benefiting from lower gas prices? Commonwealth Financial Network tells us that this effect has not spread across the board to all industries in the US. I guess we just have to enjoy this break as long as we can.

Our other main article on preparing for financial planning gives some useful help. Ask yourself "Why?" before meeting with a financial adviser.  That is, "Why do I spend so much time or money on X and so little on Y?" The article is a summary of the book One-Page Financial Plan by Carl Richards.

We had a good response to last month's e-newsletter and it's new format.  Please call or e-mail us with any comments or questions at 614-888-2121 or 877-389-2121 toll free, or  [email protected].

Sincerely,

Joe



What do lower oil prices mean for you?

Lower prices for gasoline at the pump have spurred consumer spending, according to Commonwealth Financial network.

Since mid-2014, crude oil prices have been on the decline, causing gas and other oil-product prices to drop significantly. Although the long-term economic impact remains to be seen, this dramatic price change is affecting Americans' everyday lives in a number of ways.

 

Big savings at the pump 


The most notable change is that it costs a lot less to fill your car's tank these days, with the average gas price in the U.S. hovering just below $2.30 per gallon. Overall, U.S. consumers save about $1.5 billion for every penny that the price of gas falls, according to Gluskin Sheff & Associates .

 

Thanks to the extra cash in Americans' pockets, personal spending jumped 4.3 percent in the fourth quarter of 2014, up from 3.2 percent in the third quarter. In January, consumer confidence was at its highest level in more than seven years.

What are Americans doing with all this newly found cash and confidence?

  • Buying new cars. Auto sales climbed in January (typically a slow month), and the Conference Board reported an uptick in the number of people planning to buy a new car in the next six months. According to Kelley Blue Book, sales are expected to rise 13 percent, to 1.14 million, in 2015.
     
  • Booking international travel. Combined with the strong dollar, lower international airfares have many people planning trips abroad in 2015.
Click here to continue reading the article.


Chornyak & Associates again named to Financial Times 400 Top Financial Advisers

For the third year in a row, Chornyak & Associates has been named to the Financial Times 400 Top Financial Advisers, which recognizes the top financial advisers at broker-dealers across the US.

The FT 400 was developed in collaboration with Ignites Research, a subsidiary of the FT that provides specialized content on asset management. The full report, along with deep insight into the financial advisory space, is available by clicking here .

This elite group embodies some of the leading trends in the investment management industry: 4 out of 5 work in teams, a growing part of the business; 70% are on LinkedIn; and two-thirds of the advisers hold advanced industry certifications such as the CFP or CIMA.

The average financial adviser in the FT 400 has 26 years of experience and manages $1.7 billion worth of assets. Less than three-quarters of the prior year's FT 400 returned to this year's list, which is a sign of how difficult the job of financial adviser has become.

 

To qualify for the list, advisers had to have 10 years of experience and at least $200 million in assets under management. Qualified advisers were then scored on six attributes: assets under management, assets under management growth rate, compliance record, experience, industry certifications, and online accessibility.

 

The Financial Times 400 is based on each advisor's performance in six primary areas, including assets under management, asset growth, compliance record, experience, credentials, and accessibility.  

 

Loren Fox, head of the FT 400 project, said: "As the investing world gets more complex, affluent investors increasingly turn to financial advisers. This third annual edition of the FT 400 highlights the growth of the investment advice industry, at a time when the average FT 400 adviser has seen their managed assets grow by 30% in one year."

 


The most important money question: WHY? 


Lauren Foster content director at the CFA Institute reviews the book, One-Page Financial Plan by Carl Richards. Lauren presents a convincing argument for looking at your personal financial planning from a new perspective. 

 

Ever wondered: What's the most important money question?

Carl Richards has the answer: It's "Why is money important to you?"

 

That's right. Not "Should I draw down savings or investments to prepay my mortgage?" or "Should we wait to take Social Security?" or "If my retirement accounts are fully funded, how should I invest the rest of my cash?" But "Why is money important to you?"

 

Richards is a long-time financial adviser who is well-known for his simple napkin sketches explaining complex financial ideas. He is also the author of the best-selling book, The Behavior Gap. (My colleague Charlie Henneman, CFA, included it in his post, "Eight Books That Changed the Way I Think About the World.")

 

Richards firmly believes the foundation of any financial plan lies in addressing the "Why?" question, even if it makes you (or your clients) squirm - as it no doubt will - or think you mistakenly stepped into a therapy session.

"Before you plan," he writes in his new book, The One-Page Financial Plan, "you have to know why you're planning."

 

Richards compares the discovery process that follows asking "Why?" to a doctor's visit. Which would make you feel more comfortable: a doctor who began writing a prescription after barely hearing your symptoms? Or the doctor who took the time to really understand what was going on before making a diagnosis and handing over a prescription?

 

"Obviously you'd feel better with the doctor who took the time to walk through the diagnosis process," he writes. "You shouldn't expect anything different from your financial life."

Richards says asking why money is important is a bit like "applying the rigor or a doctor's examination to your financial health. It's no crazier than going to the doctor's office for a check-up before you get a prescription . . . Logically, we know that doing the last thing first - asking a financial adviser for a solution before identifying the problem - makes no sense, yet that's where the traditional financial services industry would have us start: at the end."

 

Start at the beginning and then use what you've learned about your values to come up with a financial plan that is right for you, he says.

 

Here's a simple process Richards recommends for getting to the bottom of the "Why?" question.

Ask yourself:

  • Why do I invest so much of my money and time on X?
  • Why do I spend so little on Y when I claim it's important?
  • Why do I save as much (or as little) as I do? What am I hoping to achieve?

If you hit a "dead end" when trying to figure out what's important to you, he says there are two areas where you might find the clues:

  • How do you spend your time?
  • How do you spend your money?

Continue reading this article by clicking here.

 


Market Update

A weak end to a turbulent quarter

 

March ended with U.S. indices down, as the Dow Jones Industrial Average, S&P 500 Index, and Nasdaq declined 1.85 percent, 1.58 percent, and 1.26 percent, respectively. After brief gains at the start of the month, markets moved lower and remained there for most of March.

 

Weak economic reports hit the market during the month, with declines in personal spending and vehicle sales in early March setting the tone. Weak retail sales reported later in the month preserved the downbeat atmosphere, despite the strong employment growth reported.

 

For the first quarter as a whole, the news was better, with U.S. markets reporting gains in the face of weak March results. At quarter-end, the Dow had a marginal gain of 0.33 percent, while the S&P 500 did somewhat better, gaining 0.95 percent. The Nasdaq was the winner for the quarter, up 3.48 percent, on strong results in technology and biotechnology stocks.

 

Fundamentals were weak during the quarter, as earnings projections dropped for the first half of the year. Between the strong dollar, which adversely impacted foreign sales and profits, and the collapse in oil prices, which hammered energy companies, first- and second-quarter earnings estimates went negative, although growth estimates for the second half of 2015 remain strong. Declining growth expectations-combined with rising perceptions that first-quarter U.S. growth would also be below expectations, as well as speculation about the timing of a pending Federal Reserve (Fed) increase in short-term interest rates made investors more cautious.

 

Technical factors were generally strong, although the Dow and S&P 500 closed the quarter close to their 100-day moving averages, and markets closed the quarter well above levels that could be considered red flags.

 

International markets performed similarly for the month, though much better for the quarter. The MSCI EAFE Index was down 1.52 percent in March but up a much stronger 4.88 percent for the quarter based on indications of a nascent recovery in the European economy. The MSCI Emerging Markets Index was down 1.59 percent for the month but up 1.91 percent for the quarter. Both indices benefited from an improved trade position, as the U.S. dollar strengthened.

 

Technical factors

were weak for international markets during most of the quarter, although they improved toward quarter-end. Developed international markets closed above their 200-day moving averages at the end of March. In addition, although the emerging markets index spent most of the three-month period below this critical level, at quarter-end it was moving back up and getting close to its 200-day moving average. Arguably, this could be considered a positive sign for international markets going forward.

 

Within fixed income markets, March showed significantly different results in different sectors. The Barclays Aggregate Bond Index had another strong month, up 0.46 percent and capping a gain of 1.61 percent for the quarter. But weakness in the energy sector, weighed on the high-yield sector, a previous outperformer; the Barclays Capital U.S. Corporate High Yield Index posted a 0.55-percent loss for the month despite gaining 2.52 percent for the quarter.

 

U.S. economy takes a winter nap


A principal cause of the March decline in U.S. markets was a series of poor economic reports during the quarter. Personal spending dropped, driven by declines in vehicle and retail sales. Business investment also dropped, with spending on durable goods down as well. Another factor driving weakness was the effect of the strong U.S. dollar, which hit exports and drove factory activity down. Manufacturing surveys also indicated lower business confidence.

 

Probably the biggest negative economic data, though, was the March employment report, which showed job growth well below expectations, at 126,000, along with downward revisions to the previous two months. Employment had been the one area of the economy that had continued to perform strongly, so this weak report was concerning.

 

But the weak data notwithstanding, the underlying trends continued positive. Job growth over the past year has remained above the highest level of the mid-2000s and consistent with the late 1990s (see chart). Other data suggests that the employment market remains strong, with voluntary quits at a seven-year high and the unemployment rate, at 5.5 percent, approaching normal levels. Moreover, initial jobless claims as a percentage of the labor force have dropped to the lowest level on record. Robust job growth has also led to strong growth in personal incomes, up a healthy 0.4 percent at the end of March.

 

Despite the gap between income growth and spending, fundamentals remain strong. In fact, as the savings rate rises, the sustainability of the recovery actually becomes stronger.

 

Housing also showed improvement during the quarter. Sales volume for new and existing homes ticked up during March, despite snow and cold weather in the Northeast. Moreover, prices continued to increase for new and existing homes, suggesting that demand is still strong. Although the data has been mixed, the overall conclusion is that, despite some seasonal weakness and supply factors, the housing market remains healthy.

 

Click here to continue reading the article.
  

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

 

All information according to Bloomberg, unless stated otherwise.