Feeling good! Consumer sentiment, those feeling economic "good times" is at 15-year high.
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The average American consumes nearly 18 pounds of bacon per year. Here's why we like bacon so much!.
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Do you know what your spouse's salary is? American couples aren't on the same page when it comes to money.
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Gallup asked recent college graduates, "When it comes to success in work and in life, what are the most important elements?" You will be surprised at the results of the survey.
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Teenagers still have time to get summer jobs, and they might even learn a thing or two about managing money along the way.
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Mad Men has gone from our lives, but it's impact lives on. Was it the most pro-feminist show on TV?
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The U.S. has been churning out healthy job gains of more than 200,000 a month for over a year. The pickup in hiring is great, but is it enough by itself to push the economy to greater heights.
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 How much do online advertisers really know about you? Few of us understand what's actually happening behind the scenes when we do an online search.
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I always enjoy the short takes in our left-hand column. From the women of Mad Men to economic and tech news, these articles are sure to strike you as informative and entertaining.
Have you ever wondered why you have a hunger for bacon? This traditional comfort food causes a longing in most of us, just when the food is mentioned. It turns out that the answer is chemical. This article can be found at the left also.
On a more serious note, Commonwealth Financial network gives us some advice on the necessity of establishing an emergency fund, and Forbes magazine introduces a new e-book on how to get rid of credit card debt, written by an ex-banker. Check out these articles below. 
Enjoy July and feel free to stay in touch with us with comments and/or questions: 614-888-2121 or 877-389-2121 toll free. You can always reach us by e-mail at chornyak@chornyak.com. Sincerely,
Joe
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Emergency funds: Preparing for the unexpected
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Do you have an emergency fund? According to Commonwealth Financial Network, you should have funds set aside to cover three-to-six months' living expenses.
You've probably heard how important it is to establish and maintain an emergency fund. Unfortunately, most people don't fully realize this until a money emergency is upon them. Are you financially prepared for a leaky roof? How about a broken-down car? If you lost your job, how long would you be able to support yourself and your family until you got a new one?
An emergency fund is money that you've set aside for these unexpected situations, be it to handle a minor home repair or to pay for something more serious, like medical bills. Despite the clear importance of having an emergency fund, however, more than three in five Americans have accumulated no savings for unforeseen expenses, according to a recent Bankrate report.
Set a goal
How much you need to save depends on a variety of factors. Generally speaking, your emergency fund should cover three to six months of living expenses. (Start with three months and aim to work your way up to six months.)
There are plenty of free online tools that can help you figure out how much you should have on hand. HelloWallet's emergency savings calculator, for example, offers instant insight into this planning consideration.
Keep your funds accessible
It's important to have easy access to your emergency fund when you need it. Consider keeping a portion of your money in a regular savings account, as it will provide some return and you'll be able to withdraw it at any time without penalty. For longer-term funding, you might want to use a savings vehicle with higher interest, such as a certificate of deposit (CD) or multiple CDs.
Avoid savings pitfalls
Naturally, there may be obstacles to overcome as you build your emergency fund. Take a look at some of the most common pitfalls and ways to avoid them:
- Using your credit card as an emergency fund. Although credit cards are convenient, there is a lot to consider before turning to plastic. Using your credit card may resolve the immediate need, but when you consider interest on the debt and possible penalties, it may not be worth it in the long run.
- Cheating other accounts to fund your emergency stash. Withdrawing money allocated to other resources, particularly your retirement savings account, can do long-term damage to your financial picture. For example, if you borrow from your retirement account and default on the loan, you could face serious tax implications and penalties. Think of it this way: taking cash out of your retirement account is like stealing from yourself in your golden years.
- Thinking you can't afford it. The most common excuse for not maintaining an emergency fund is that you don't make enough money to save. Although your budget may be tight, you don't need to put away hundreds or thousands of dollars all at once. Starting small works just as well. Try brewing your morning coffee at home instead of buying it or bringing a bag lunch to work instead of going out. The savings may not be dramatic initially, but they will add up.
Start today!
Establish your savings goal, figure out how much money you need to put away every month, and stick to the plan. Remember: it's better to have an emergency fund and never use it than to face hard times with no means to support yourself and your family.
� 2015 Commonwealth Financial Network�
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Doing well, but not feeling rich? You're a "high net worker"
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 The Street warns us that "Based on the net-worth statistics it appears that retirement may be disappointing to the average high-net worker." Does this apply to you?
What do you call someone pulling in an incredibly comfortable salary, but sitting on assets that fall just short of "rich?" Financial advisors call them "high net workers," and they have all the headaches of high net worth with almost none of the benefits.
Financial firm EverBank coined the term "high net worker" to describe folks who are affluent enough to need private banking services, but not affluent enough to fall into the high-net-worth category. On average, they're 41 to 63 years old, they work more than 50 hours a week, they're in households making roughly $374,000 a year and they have $750,000 to $1 million in investable assets. They're also far more likely to be in health care, finance or science, technology, engineering or math careers than the rest of the population.
"Many of the individuals known as high net workers have substantially developed since the recession," says Frank Trotter, executive vice president of EverBank. "By primarily working in STEM occupations they have been a segment who have benefited from those parts of the economy that have recovered well. In addition, to the extent they have homes and equities, both asset classes have done very well in the past five to seven years."
But high net workers also extremely conservative investors (69% label themselves as such), despite being in the middle of their peak earning years, desperately in need of a financial advisor (31% never used one, but 91% see the merits of their services) and loath to retire. On average, 13% say they'll never stop working. A full 23% of those making $500,000 a year or more and investing upward of $2.5 million say they'll stay on the job.
"These folks are usually concerned with advice of concern to younger people, such as college funding for children, and protecting the family with insurance coverage," says Eric Meermann, certified financial planner and portfolio manager with Palisades Hudson Financial Group in Scarsdale, N.Y. "Protecting the income stream of one or both earners in the family is an important consideration, not just with life insurance but also disability."
As a result, high net workers are five times more likely to invest in a 529 plan for their child's college fund than the average U.S. worker. Considering half of American families haven't put aside any money for college, as Sallie Mae discovered last year, they're well ahead of the curve.
"In terms of saving for their children's education this does appear to be a priority that they understand and execute on," Everbank's Trotter says. Looking at the median net worth one might think that a majority of their current savings might be earmarked for education."
They're also twice as likely to invest in their company's 401(k) as the average American and three times as likely to put money in the stock market. But where the latter is concerned, high net workers are still a bit rattled after the recession and aren't quite ready to wholeheartedly trust the market. Despite huge gains in the U.S. stock market during the economic recovery, almost half of high net workers cling to the somewhat outdated notion that their best investment returns over the next five years will come from Asia.
Read the rest of the article here.
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How to crush credit card debt, from an ex-banker
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 Nick Clements of Forbes, formerly a banker at Citibank and Barclays, has published a new e-book on the dangers of amassing credit card debt. He warns us, "The credit card has been designed to lull you into debt."
We are a nation addicted to credit card debt. Americans have amassed $857 billion of it. As we begin to forget the 2008 financial crisis, banks have once again started aggressively marketing credit cards. I receive mail every week promising me bonus points, extra cash back, and a lifetime of plastic-induced happiness. The marketing is working. In April, credit card debt grew at 11.5%, its fastest pace in years.
Credit cards can be remarkably useful and lucrative spending tools, when used responsibly. If you pay your balance in full and on time every month, you are receiving an interest free loan, often with some airline miles on top. However, over 40% of Americans are not able to pay their balance in full. Instead, they are borrowing money at interest rates that are usually well above 15%. That means the typical family is paying over $1,500 of interest every year. In a world where middle class families feel increasingly squeezed, this is too much money to be lost to interest. Why do credit cards have this power over us? Why does the average household have more than $10,000 of credit card debt at interest rates well above 15%? And how can we break the cycle and get out of debt? Today I am publishing a Forbes eBook, "Secrets from An Ex-Banker: How To Crush Credit Card Debt." This book uses my nearly 15 years of insider experience as a credit card executive to help you become debt-free forever. I helped introduce credit cards to the Russian market with Citibank. I ran the UK consumer credit card franchise of Barclays. But now I am focused on using my knowledge of how the industry works to help people avoid the tricks, traps, and pitfalls of credit card debt. Being in debt does not need to be a life sentence. You can break the debt cycle. Traveling the country, I have helped countless people put together plans to become debt-free. And most people were surprised at how much power and how many options they actually had. It is very easy to sit back and let credit card debt control your life. But I want to help you take control of your life and crush credit card debt forever. Why Are Credit Cards So Tempting? Diners Club invented the credit card in 1950. The purpose of the Diners Club was to make it easier to make payments. Diners would no longer need to carry cash. And restaurants could reduce the amount of cash they needed to keep in their registers. It was a great deal for both sides. Over time, credit cards evolved from being a payment tool to a borrowing trap. Most of the money is now made from the interest charged on balances. Continue reading this article by clicking here . |
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Market Update
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World markets hit by political uncertainty
June was a difficult month for U.S. equity markets. The S&P 500 Index was down 1.94 percent, and the Dow Jones Industrial Average was down even further, losing 2.06 percent. The Nasdaq did best, though it declined 1.64 percent. Markets were generally flat for most of June but dropped precipitously toward month-end as the Greek crisis worsened.
For the quarter, results were better but still lackluster. The S&P 500 was up slightly, by 0.28 percent, though the Dow lost 0.29 percent. The Nasdaq again performed best, up 1.75 percent. For the Dow, the month-end decline in June erased gains for the quarter and most of the year, while the S&P 500 and Nasdaq continued to post gains for the quarter and year-to-date.
A major contributor to the poor market performance was a further decline in expected corporate earnings. Per FactSet, analysts estimate a 4.5-percent decline in earnings year-over-year for the second quarter, down from an expected decline of 2.2 percent forecast on March 31. The increase in the estimated decline was primarily due to anticipated weakness in foreign markets. There has been a preponderance of negative guidance for the quarter, with 77 negative announcements and only 30 positive. The last time that earnings declined on a year-over-year basis was in the third quarter of 2012.
Technical factors also weakened during June. Even though all three major U.S. indices closed the month above their 200-day moving averages, the sharp decline at month-end brought them closer to that level than they had been for quite a while. In fact, the Dow dropped below its 200-day moving average before recovering.
Developed international markets declined more than U.S. indices for the month but did better for the quarter. The MSCI EAFE Index was down 2.83 percent in June, though it was up 0.62 percent for the quarter and up 5.52 percent year-to-date. The very weak June results came from the significant impact of the Greek crisis on European assets, even as the stimulus action by the European Central Bank had supported previous strong results. Technical factors remained weak, as the index dropped below its 200-day moving average at month-end.
Emerging markets, represented by the MSCI Emerging Markets Index, lost 3.18 percent in June, which led to a small 0.24-percent decline for the quarter. Emerging markets were damaged by a substantial market decline in China, as well as continued fear about the consequences of the Federal Reserve's pending increases in interest rates. Technical factors, too, were weak, as the index dropped below its 200-day moving average at the end of the month.
Fixed income markets experienced a volatile June, with the Barclays Capital U.S. Aggregate Bond Index reporting a loss of 1.09 percent over the month.
The notable decline in the Barclays Capital High Yield Municipal Index came after the surprise announcement at month-end by Puerto Rico's governor, Alejandro Garcia Padilla, that the island could not pay its $72 billion public debt load without dramatic restructuring. Further calls from Padilla to potentially halt payments on the debt for three to five years rattled the relatively small high-yield municipal market and caused much of its dramatic under-performance.
U.S. economic recovery continues despite weak first quarter
U.S. economic news during the second quarter was quite strong, and even the first quarter turned out to be better than initially thought. First-quarter gross domestic product (GDP) growth was revised upward to a decline of 0.2 percent-considerably better than the previous estimate of a 0.7-percent decline. Much of the weakness, as in 2014, was due to extremely harsh winter weather; a strong U.S. dollar, which hurt exports; and a West Coast port strike that disrupted supply chains across the nation.
Both winter and the strike have ended, and second-quarter results have been much more positive, largely dispelling questions of whether the recovery had been faltering. Employment growth continued strong, with annual job growth above 3 million jobs per year for the past six months, a level last seen in May 2000. Strong employment growth has driven the unemployment rate down to 5.3 percent, and wage growth finally seems to be responding. Average hourly earnings grew by 2.3 percent year-over-year in May, which is the highest level since 2009.
The strong labor market is also finally translating into improved consumer confidence and a rise in spending growth. Consumer confidence in May was at the second-highest level since January 2007, and personal spending growth was at its highest level in six years. Other economic indicators at multi-year highs were housing sales-the best numbers since before the crisis for both new and existing homes-and vehicle sales, at a nine-year high.
Not all the news, however, was good. Manufacturing growth remains weak, although positive, and the energy sector continues to downsize in response to low oil prices. Nonetheless, current data indicates that the recovery goes on and is increasingly benefiting the average worker, which may lead to accelerating growth through the rest of the year.
International risks return to the forefront
Despite the strong economic data out of the U.S., markets largely shrugged off the good news. The real risks for the quarter were international. Negotiations between Greece and its creditors had been a concern throughout the quarter, but worries intensified in late June as discussions became more heated. Market concerns peaked when talks broke down entirely on June 27, after Greece's prime minister, Alexis Tsipras, announced a public referendum on a proposed deal with European lenders. This led to significant market downturns around the world. Figure 2 shows the declines in the U.S., German, French, Spanish, U.K., and Japan stock markets at month-end.
Figure 2. Performance for Leading International Equity Indices, June 2015
Source: Bloomberg
Although the Greek crisis continues, and worries remain, market reaction has been relatively modest thus far. Looking forward, a deal remains quite possible, and even in the event of a Greek exit from the eurozone, the systemic damage will likely be contained. Beyond Greece, other international issues were on investors' minds. Chinese stock markets moved into bear territory at the end of June, with substantial declines in Shanghai, in response to a continued slowing of China's economy. The Chinese government has looked to address the situation with both rate cuts and reduced reserve requirements, a combination last seen in 2008, suggesting both the level of their concern and commitment. This situation remains an area of most concern for global markets. Concern is appropriate, but the big picture remains positive
The weak results from U.S. equity markets in June and through the second quarter have been concerning, though largely a response to political risks in Europe. Underlying economic fundamentals are strong in the U.S. and improving in Europe, suggesting that any market adjustment may be limited. Moreover, both the U.S. and the world at large are better prepared to weather challenges than they have been in years.
It is quite possible that we will see further turbulence, particularly in international markets, but at this point it appears that it would be more of a normal adjustment to changing conditions. Even a larger correction would be normal in the grand scheme of things and nothing to worry about in the medium to longer term. We remain confident in the U.S. economy, our excellent positioning in the world, and the strength of our financial markets. We believe that a well-diversified portfolio with regular rebalancing is still the best way to meet financial goals over the long run and should be maintained through good times and bad. 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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