New feature on our website:
FINANCIAL TIPS FACT VS. FICTION
Each month we are now featuring a true/false question that will aid you in navigating through the world of financial services. Click here to see the latest tip.
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The latest " Bond girl" is 50! The age gap between her and Daniel Craig - who plays Bond in "Spectre" - is just three years.
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For $725 million, you can buy this Texas ranch that's the size of a small nation.The price includes 1,000 oil wells, 6,800 head of cattle, and 500 quarter horses.
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Can certain foods double as medicine? A growing number of physicians are "prescribing" foods not only for weight management, but also to prevent and treat chronic diseases.
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These superhumans are real and their DNA could be worth billions.
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Can you think of 10 TV stars who went off script and ruined their careers? The most obvious is above. |
Take this quiz to find out if you have a happy brain. You can train your brain to be happy.
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The UK's classic Bentley is expanding its line with an SUV (pictured above). Click here to see what the Bentley sports car looks like.
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 The Rust Belt is undergoing a resurgence. Detroit is leading but employment data also show a shift in U.S. industry to smaller cities and suburban areas.
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After your mortgage or rent, car loan/lease payments are likely to be the next-biggest item in your monthly budget. Here's how to calculate carefully what you can really afford.
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True friendships are unbreakable, depending on your perspective on what friendship means. Here are 10 signs that you're in a truly unbreakable friendship.
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Forget the "spoiled" stereotype: This study finds millennials to be the demographic group most welcoming of intellectual disabilities.
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This month we have a special video for our readers in which I talk about market volatility. You may be surprised to hear me say that volatility is good for you. Your portfolio needs it like your body needs oxygen.
I hope you'll view this video by clicking on the image below. You'll learn more about market swings and the need to ride out the storm. We have a new videographer who has included graphics to illustrate the points I'm making.
 Summer is a great time to take a break from your routine and visit new places. Commonwealth Financial Network has some useful information on how plan a vacation and economize. Portofino, pictured on the left, is an Italian fishing village and vacation resort famous for its picturesque harbor and its reputation for attracting celebrity and artistic visitors.
Click here for more getaway suggestions and be sure to read the article directly below. Our articles this month are jam-packed with good advice (buying an extended warranty on a car; considering a Health savings plan) and interesting news/facts (the latest Bond "girl;" medicinal benefits of certain foods; "superhuman" DNA; how to train your brain; and many more). Please let us know if there are certain articles you really appreciated or ones you found less interesting. You can always reach us at 614-888-2121 or 877-389-2121 toll free, or by e-mail at chornyak@chornyak.com.
Sincerely,
Joe
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Planning an affordable vacation abroad
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If you're considering taking a trip outside the country, a little research and savvy budgeting can go a long way toward a memorable vacation that doesn't break the bank.
From where (and when) you choose to travel to the type of accommodations you book, there are plenty of opportunities to make budget-conscious choices as you plan your foreign getaway.
Keep your destination options open
If you're not set on a particular vacation spot, look into slightly off-the-beaten-path locales that still offer the experience you're after. For example, if spending time in the sun tops your wish list, you might find better value in Puerto Rico or the northern shore of the Dominican Republic than in other Caribbean resort areas. For inspiration, check out Budget Traveler's list of relatively affordable vacation spots for 2015.
Also consider how much activities, tours, and entertainment in various locations will set you back. For instance, a destination where you'll want to visit many museums and cultural attractions could end up being pricier than a low-key vacation with a focus on rest and relaxation.
Be flexible when booking travel
Of course, how much it costs to get there may play into your destination decision as well. Lower oil prices haven't translated to lower airfares, but it's still possible to find good deals on international flights. Try these tactics:
- Research airport options. Compare rates at different airports if there's more than one near your destination. (Don't forget to factor in any additional ground transportation costs.)
- Consider off-peak travel. Timing your visit outside of your destination's prime travel season is a good way to secure a lower fare.
- Book early. According to a study by CheapAir.com, it's best to book international flights at least three months in advance, if not earlier, depending on the season. If you want to travel to Europe in the summer, for example, you may get the best deal by booking as soon as tickets go on sale (about 11 months in advance).
Look beyond the typical hotel room
Compare room rates on different travel search engines, as well as directly on hotel websites. If you're vacationing in a resort area, it may make sense to book an all-inclusive package that covers meals, beverages, and activities, especially if you're traveling as a family. Renting a house or condo through a site like VRBO may also be less expensive (and more comfortable) than a hotel room, especially since you can cook some of your own meals.
� 2015 Commonwealth Financial Network�
Continuereading the article here.
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Should you buy an extended warranty on a car?
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 You're sitting in the car dealership's finance manager's office. You are offered an extender warranty on the car you just bought - what do you do? This article from mydollarplan.com takes you through the ins and outs of car warranties.
For many purchases in life, the warranty that comes with the product from the manufacturer is sufficient. But there are times when you want an additional warranty on top of the standard warranty that the item comes with. While in many cases, the extended warranty is a money ploy for the retailer, there are times when an extended warranty does make sense. I am going to focus on automobile extended warranties.
The Game of Extended Warranties In General
I used to work for an electronics retailer after graduating college. One of my monthly goals was to sell a certain number of extended warranties on products. Personally, I think that based on the warranty, many of these extended warranties are not worth it.
For example, many times the extended warranty allows you to bring in the item to the store and the store will ship it off to their repair center to fix. If it cannot be fixed, then it will be replaced. Sadly, many salespeople only mention the part about the item being replaced. When the customer comes back to the store, they are upset that they aren't simply getting a new item. Other times, the customer isn't told what is and is not covered under the warranty. When they bring the item back to get fixed, they are upset when they learn it is not covered due to negligence. In all, stores push the extended warranty because many times, the item never breaks (or the customer forgets they have the warranty). In this case, it is purely profit for the retailer. Extended Car Warranties
In many cases, extended warranties for cars can be looked at the same way. For the most part, they are purely profit for the dealer, or the third party company that sells the warranty. Below are a handful of advantages and disadvantages to consider before buying the extended warranty. Advantages
- Helps reduce the cost of repairs once the standard warranty runs out (assuming you keep vehicles for a long time)
- Potentially transferrable when selling car, helping to add to resale value
Disadvantages
- Not worth it if you buy new cars every few years
- No added resale value when trading in car
- Many don't cover a lot of the expensive repairs when buying a warranty from a third party
Let's take a look at all of these. If you tend to buy a car and keep it for a long time, then buying the extended warranty could make sense for you. But if you only keep a car for 5 years or less, then buying the extended warranty doesn't make much sense because you will be covered under the standard warranty during most of this time. Additionally, you have to look at the car you are considering as well. Some cars are more reliable than others. It might not make sense to buy the extended warranty on a car that is very reliable. But, it might make sense to buy it for a car that is not as reliable. Lastly, be sure to take into account the transferability of the warranty. Many times you can transfer a warranty to the new owner when selling your car. This could lead to a higher asking price when selling your car privately. Just know that a dealer will not offer you more for the car because you have the extended warranty when trading the car in. How to Buy an Extended Warranty
If you are looking to get the best deal on an extended warranty, then negotiating it with the total price of the car is your best bet. When you agree to a price and then consider the warranty while sitting in the finance manager's office, you won't get as good of a deal. But all hope is not lost. Know that in many cases, you don't have to decide on the extended warranty right then and there. Many times you can buy the extended warranty up to 30 days after buying the car. In some cases, you may even be able to negotiate and buy the warranty from another dealer.
Read the rest of the article here.
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Health savings accounts: Is an HSA right for you?
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 The staff of the Mayo Clinic tells us everything we should know about HSAs - Health Savings Accounts. Get the entire story - why they were created, advantages, disadvantages, how to establish an HSA, IRS implications, and more.
Health savings accounts (HSAs) are like personal savings accounts, but the money in them is used to pay for health care expenses. You - not your employer or insurance company - own and control the money in your health savings account. The money you deposit into the account is not taxed. To be eligible to open an HSA, you must have a special type of health insurance called a high-deductible plan.
Why were health savings accounts created?
HSAs and high-deductible health plans were created as a way to help control health care costs. The idea is that people will spend their health care dollars more wisely if they're using their own money. In addition, doctors and other health care providers will have an incentive to lower their rates because they're competing for business.
Is a health savings account right for me?
Like any health care option, HSAs have advantages and disadvantages. As you weigh your options, think about your budget and what health care you're likely to need in the next year.
If you're generally healthy and want to save for future health care expenses, an HSA may be an attractive choice. Or if you're near retirement, an HSA may make sense because the money in the HSA can be used to offset costs of medical care after retirement. On the other hand, if you think you might need expensive medical care in the next year and would find it hard to meet a high deductible, an HSA might not be your best option.
What are some potential advantages of health savings accounts?
- You decide how much money to set aside for health care costs.
- You control how your HSA money is spent. You can shop around for care based on quality and cost.
- Your employer may contribute to your HSA, but you own the account and the money is yours even if you change jobs.
- Any unused money at the end of the year rolls over (stays in your account) to the next year.
- You don't pay taxes on money going into your HSA.
What are some potential disadvantages to health savings accounts?
- Illness can be unpredictable, making it hard to accurately budget for health care expenses.
- Information about the cost and quality of medical care can be difficult to find.
- Some people find it challenging to set aside money to put into their HSAs. People who are older and sicker may not be able to save as much as younger, healthier people.
- Pressure to save the money in your HSA might lead you to not seek medical care when you need it.
- If you take money out of your HSA for nonmedical expenses, you'll have to pay taxes on it.
Who can set up a health savings account?
Your employer may offer an HSA option or you can start an account on your own through a bank or other financial institution. To qualify, you must be under age 65 and carry a high-deductible health insurance plan. If you have a spouse who uses your insurance as secondary coverage, he or she also must be enrolled in a high-deductible plan.
This high-deductible health plan must be your only health insurance - you can't be covered by any other health insurance. However, having dental, vision, disability and long-term care insurance doesn't disqualify you from having an HSA.
Continue reading this article by clicking here .
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Market Update
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U.S. markets bounce back
After a difficult June, U.S. markets bounced back in July. The June decline had been largely due to fears about the Greek crisis, and the subsequent agreement brought confidence and the markets back. The S&P 500 Index closed July up 2.10 percent, and the Nasdaq did even better, gaining 2.84 percent. The Dow Jones Industrial Average did worst among the three, returning just 0.52 percent, the result of weak performance by the energy stocks Chevron and ExxonMobil.
The recovery of U.S. markets was mostly driven by positive earnings news. Per FactSet, as of July 31, almost three-quarters of reporting companies had beaten their earnings estimates, while a little more than half had beaten sales forecasts. Overall earnings were down 1.3 percent. Though certainly not great, that number is much better than the 4.6-percent decline forecast at the start of the month. Thus far, all sectors have reported positive earnings surprises, with the exception of energy, which is still underperforming expectations. Eighty percent of sectors now have higher growth rates than was estimated as recently as June 30.
Sales growth has not been as strong, with fewer companies beating estimates than average. As with earnings, however, actual overall results for the quarter have so far been better than expectations, declining 3.3 percent compared with an expected drop of 4.4 percent anticipated at the end of June. Sixty percent of sectors now show revenue increases, with decliners led by the energy sector. Broad growth in revenue and earnings validates the continuing economic recovery and should provide further fuel for it, despite weakness in the energy sector.
Technical factors were mixed at month-end. Both the S&P 500 and Nasdaq recovered to well above their 200-day moving averages, a sign of longer-term trends, but the Dow remained below that technical level. Even though two of the three averages are still well above problematic levels, the fact that the Dow is stuck in the worry zone suggests potential weakness ahead.
Like their U.S. counterparts, the developed international indices rebounded in July, with the MSCI EAFE Index up 2.08 percent. The strong results came from both a reduction in political uncertainty, as the Greek crisis was resolved for at least the short-term, and continued economic improvement, as the European and Japanese economies still showed growth. This recovery is likely to persist, spurred by improving economies and ongoing stimulus from the European and Japanese central banks. Technical factors have been marginal, with the EAFE bouncing around its 200-day moving average.
Emerging markets, on the other hand, as represented by the MSCI Emerging Market Index, had a very bad July, losing 7.26 percent. The month was something of a perfect storm, with a market crash in China, continued strength in the U.S. dollar, and commodity weakness combining to hit all of the weak points of emerging markets. Although the Chinese markets did show signs of recovery, commodity markets were still weak and the dollar gave no indication of returning to previous lows. Technical signs for emerging markets also remained weak, and, with the Chinese markets still volatile, this looks to be a risky area at this time.
Fixed income also bounced back off of its June losses, due in large part to a decrease in intermediate and long-term rates. The 10-year Treasury rate moved from 2.43 percent at the start of July to 2.20 percent at its end, as concerns over commodity prices and lowered growth forecasts weighed on investors' minds. The Barclays Capital Aggregate Bond Index returned 0.70 percent for July, regaining most of what it had lost during June.
U.S. economic recovery slow but steady
July's economic data indicated continued recovery. At the start of the month, employment reports showed an increase of 223,000 jobs, slightly below expectations but enough to drive the unemployment rate down to 5.3 percent. More good news included the announcement of the highest number of job openings ever-5.363 million-in the JOLTS report, indicating the strongest labor demand since 2000. Moreover, the initial unemployment claims number of 255,000 was the lowest level since 1973.
Even as job growth was good, wage growth-the missing piece of the recovery so far-was disappointing. Average hourly earnings were flat in July, bringing the annual increase down to 2 percent. Worse, the Employment Cost Index report, released at month-end, showed a significant slowdown in compensation growth, from 0.7 percent in the first quarter to 0.2 percent for the quarter ending June 30. This reading represents the lowest quarterly change since the measure was first calculated in 1982 (see Figure 1). Still, the expectation is that wage growth will accelerate, though there are no consistent signs of that happening yet.
Housing remains a bright spot. Prices have continued to rise, with the S&P/Case-Shiller Index showing an average increase of just under 5 percent in June. In addition, housing starts were up 9.8 percent from May to June; including the figure for April, this led to the highest three-month average since December 2007. Existing home sales grew well above expectations, at 3.2 percent for the month of June. Weak signs included a decline in new home sales, which appeared to be due more to supply constraints than market weakness, and a decline in pending home sales after a strong increase in May. Even with that decline, however, the year-over-year increase was 11.1 percent.
Overall, the housing market is considered to be strong. Moreover, industry confidence has increased, with the National Association of Home Builders Confidence Index at its highest level since November 2005.
Not all the news was good. Consumer confidence, after a bump up in early July, appeared to slacken at month-end, with two of three surveys reporting declines. Retail sales growth was also disappointing, declining 0.3 percent in June compared with the May number, which was also revised downward. Core retail sales, excluding autos, building materials, and gas, also decreased for the second month out of the past three. Finally, the Small Business Optimism survey, conducted by the National Federation of Independent Business, indicated a downturn in business confidence, with drops in 9 of 10 regions.
Despite these headwinds, the Federal Reserve appeared to be reasonably positive about the U.S. recovery. The statement issued after the FOMC July meeting made several positive changes in its economic references, and the consensus of many economists was that the expected initial rate increase in September remains on track, which would be an important signal of continued recovery.
International risks recede for the moment
During July, international risks took center stage. The Greek crisis raised the possibility of a eurozone collapse, and Chinese stock markets crashed. Either of these could easily have led to systemic dislocations. The fact that neither did is a good sign of the stability of the current recovery.
The Greek crisis, in particular, was seen as a potential replay of 2011, which shook markets around the world. This time, however, although markets did react, they did so in a measured and rational way. Years of work to reduce risks by European governments and financial institutions, as well as by U.S. and world banks, limited the damage. Likewise, even as the decline in Chinese stocks shook that country's markets, the effect outside of China was very limited.
With a deal in place between Greece and the eurozone and Chinese markets no longer plunging, it appears as if international risks are lower than they have been for some time. Uncertainty remains, but the recent events constituted a stress test, which has had encouraging results. We may well see both Greece and China show up again in the headlines, but, for the moment, both appear to have calmed down.
Good summer weather
continues, though storms remain likely
Although U.S. economic growth continues, signs of slowing are apparent, and areas of concern such as missing wage growth remain. Nonetheless, leading indicators are positive, and the second half of the year could likely be stronger than the first. Beyond the improving economy, the better-than-expected results for corporate earnings and revenue are encouraging for the U.S. market. Strong performance in July despite international turbulence also provides confidence.
Even so, we have been reminded that substantial risks remain. Investors have benefited from a just-right mixture of economic acceleration, economic and monetary policies, and geopolitical calm over the past couple of years. Now, however, because Fed policy is likely to change, Europe remains unsettled, and Chinese growth continues to decline, favorable conditions may well become less so.
Moreover, the current high-valuation and low-volatility levels of U.S. markets serve to increase risk. Both factors could lead to significant adjustments if economic and market conditions become less favorable.
In the big picture though, risk is normal, and the U.S. is well positioned to ride out any uncertainty, despite potential volatility. As we have seen in the past month, the U.S. economy and financial markets are among the most solid in the world. We believe that a well-diversified portfolio with regular rebalancing is still the best way to meet long-term financial goals 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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