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What's Happening Now

Twenty factors to consider when deciding whether to work after retirement. Beyond the paycheck, what do you hope to get out of working?

A neuroscience researcher reveals four rituals that will make you a happier person. UCLA's Alex Korb has some insights that can create an upward spiral of happiness in your life.

Here are ten fashion websites that you're probably unaware of. What makes them unique?

Americans' views of the pharmaceutical industry have taken a tumble. It is now rated one of the worst industries. How did this happen?

Edible landscaping: using food plants as part of a decorative landscape. Replacing grass and ornamental plants with fruits, vegetables, and herbs offers beauty and many benefits.

Ten ways you're hurting your kids financially. You might be surprised to learn that you could be dooming your child's financial future.

This is NOT a Van Gogh painting! What is it?

Here's what life will look like if you don't save enough. New report by J.P.Morgan: over any 10-year period, more than three-quarters of adults aged 50-60 experience job layoffs widowhood, divorce, or new health problems.

For the most part, car buying remains a tough negotiation. And you're at a disadvantage: The sales representative does deals every day, and you don't. He knows what to say; you don't. Here are six things car dealers never want to hear you say.

Grocery delivery services are exploding, and here's why you might want to give them a try.

This clothes closet of the near future acts as an in-home dry cleaner.

Television watchers no longer need to feel bound by cable companies and their high monthly bills. With services such as Amazon Instant Video, Hulu Plus, and Netflix, you can save money by streaming many of your favorite shows to your computer, tablet, mobile phone, or even your actual television set.

With much tougher Corporate Average Fuel Economy standards looming from the U.S. government, many car brands are lining up to introduce electric vehicles. Should you have "range anxiety?"

An ancient Japanese art is transforming solar power. The paper art form, kirigami, permits better exposure of solar cells to the sun's rays.

"Your doctor will skype you now..."
Your employer may soon let you have virtual medical visits, but should you?

Attention, parents of third graders: If demographic patterns hold, your children could be in the largest, most diverse U.S. college freshman class ever.

October 2015

Our video this month features Joe, Jr. in a piece we call "Recharging the Batteries." Please have a look and let us know how you like to recharge your batteries.

Is an electric car for you? You might be surprised to learn that Nissan announced this month it delivered its 75,000^th Nissan Leaf in the United States. Electric car sales are booming. Should you join the movement? See the link in the left-hand column.

We would like to call your attention to an important article below which may affect your financial planning. Learn some options and facts about home fire insurance below. Or click here.

Autumn in Central Ohio can be magnificent. All of us at Chornyak & Associates hope you enjoy the colors and traditions that the season has to offer!

We invite your comments or questions. You can contact us at 614-888-2121 or 877-389-2121 toll free, or by e-mail at chornyak@chornyak.com.

Sincerely,

Joe

Recharging the batteries

I feel very strongly that doing good work for our clients requires that we also plan some down time in an environment totally removed from our daily work situation.

Every year Joe, Jr. and I take some time to get away together to Alaska where the air is fresh and the scenery is amazing. We come back renewed, focused, and ready to dedicate our best thinking to our clients.

We hope you enjoy Joe, Jr.'s narration of this experience.

Please click on this link to view the video, or click on the image below.

How would an interest rate increase by the federal reserve board affect average consumers?

How much do you know about the effects of an increase in interest rates by the Federal Reserve? Travis Pizel of MoneyNing.com explains the various types of interest rates.

The Federal Reserve Board announced last week that they would not be raising interest rates. All eyes seem to be on them when they meet to discuss the economy and what to do about interest rates, so it must be important. After all, the announcement sent stock soaring (though only briefly). But what interest rate is it that we're really talking about here, and how would a rate hike affect the average consumer like you and I?

Interest Rate Types

There are actually three separate interest rates that affect the rates that you and I pay when we borrow money, and the Federal Reserve Board only affects the first two:

Federal Funds Rate: Also known as the overnight rate, is the rate at which banks borrow money deposited in the Federal Reserve to each other.

Federal Discount Rate: The rate at which banks can borrow directly from the Federal Reserve instead of from each other. This rate is typically higher than the Federal Funds Rate to encourage banks to borrow from each other before borrowing from the Federal Reserve.
The Prime Rate: Set by banks, and is the rate at which banks borrow money to their best customers. This rate may vary slightly from bank to bank, and is what most consumer loans are based upon. The Wall Street Journal publishes the WSJ Prime, which is meant to be representative of what banks have their Prime Rate set to on any given day.

Ripple Effect

When the Federal Reserve Board increases the Federal Funds Rate and the Discount rate, it becomes more expensive for banks to borrow money. They pass that expense on to consumers by raising their Prime Rate, which affect the interest rate on things people borrow money for every day.

Mortgage Rates

If you already have a fixed rate mortgage, there's nothing to worry about here as your interest rate would be unaffected by a rate hike by the Federal Reserve Board. However, those aspiring to buy a home in the near future may see interest rates go up, making their payments higher and more difficult to afford.

Auto Rates

Interest rates on automobile loans have been low for quite some time. For example, I financed my last vehicle with a 1.99% interest rate. If the Federal Reserve Board raises rates, automobile interest rates will also climb.

Credit Card Rates

Credit card interest rates are variable and based on the Prime Rate. If rates go up, so will your credit card payments. The Federal Reserve changes interest rates infrequently, so one rate hike wouldn't cause a spike in your monthly payments. But many rate increases over time could make credit card payments difficult to handle. Also, if rates start to increase, expect to see less of those 0% interest promotional offers.

Savings Account Rates

One of the few benefits to consumers of having the Federal Reserve Board raise interest rates is that it also causes savings account rates to go up. Current interest rates on savings accounts are a mere fraction of a percent. Money sitting in a savings account actually devalues every day because the interest earned is less than the rate of inflation.

The effects of the Federal Reserve Board's actions are complex, and how they affect the average consumer is difficult to understand exactly. The next time the news reports that interest rates may be going up, thanks to the information in this article you'll have the tools to understand what exactly that means for you and your finances.

Read the rest of the article here.

Back-to-school budgeting

When handling financial matters with a college student, parents often struggle to find the right balance between hovering over the child's every decision and granting too much financial freedom, too soon. Here, we'll explore some common expenses that college students and their parents should factor into the back-to-school budget, as well as simple ways to stay on track.

Carefully consider off-campus housing

Is your student living off-campus this semester or considering it as an option in the future? If so, you'll want to keep these tips in mind:

Establish a rental payment plan. Determine how much you'll contribute to monthly rent costs and draft a feasible plan with your student. Be sure to read the fine print of the lease agreement in order to avoid any surprises down the road. And don't forget to account for utilities, Internet, and other additional costs.

Coordinate with roommates. After formulating your plan together, your student should reach out to his or her roommates to ensure that all cosigners are on the same page regarding who pays for what. Clarifying expectations now will help avoid future confusion and stress.

Inquire about renter's insurance. Renter's insurance helps protect your student's property in the event of fire, theft, or other dangers. Although the landlord most likely has insurance for the house or apartment, such policies usually don't apply to tenants' personal possessions.

Plan for general expenses

In addition to housing costs, be sure to budget for other key expenses, including:

Transportation. Research the area and discuss how your student will get around campus, as well as how he or she will travel home for breaks. Will your child need to purchase a pass for public transportation, a parking permit, or a bike? If the college is far from where you live, how often will he or she return home?

Textbooks and supplies. According to the College Board, the average cost of books and materials runs about $1,200 per year at a four-year public college. Sites such as Amazon and Half.com carry new and used titles, often at significant discounts, and rental websites like Chegg.com or Bookrenter.com may offer up to 80 percent off standard textbook prices. Encourage your student to shop around for the best deals.

Entertainment and incidentals. Who will cover the costs of entertainment and other personal expenses while your child is at school? Again, it's important to set reasonable expectations with your student about how much you plan to contribute. To cut costs, challenge him or her to look for discounts and inexpensive alternatives.

Future student loan repayment. If you cosigned a private student loan for your child, it's wise to make a repayment game plan ahead of time. Keep in mind that the endorser is effectively responsible for making the payments if the student cannot. Be sure to consider the risks to your own finances in the event your child is unable to repay his or her loans on schedule.

� 2015 Commonwealth Financial Network^�

Continue reading the article here.

Ten tips for buying a house in any market condition

In an article in foxbusiness.com, Samantha Alexander tells us that when it comes to threats to your home, there is little that's quite as damaging as a fire. In a matter of minutes, a small flame can spread out of control, destroying the structure of your home, as well as everything inside it.

Unfortunately, house fires aren't all that rare. In 2013, 387,000 residential fires occurred in the U.S., causing $7 billion in property damage, according to the National Fire Protection Association (NFPA).

The NFPA reports numerous causes for house fires, ranging from kitchen appliances being left on to lightning strikes. Since fires are not always preventable, it's vital that homeowners protect their property investments with the right insurance coverage.

Fire insurance coverage

Depending on what type of property insurance you have, you may already be covered for fire damage. However, it doesn't hurt to be sure.

Providers offer different coverage options, so you'll want to review the details of your policy to see what kind of protection you have. Here's why it's important: The average fire claim, according to the Insurance Information Institute, exceeds $37,150.

Here are two of the most common ways to insure your home against fires:

1. Standard home insurance

If you own a home, your mortgage lender likely required you to purchase a home insurance policy. If so, your home probably is protected from fire damage. Standard home insurance policies typically include coverage for a variety of perils such as fire.

A standard policy not only can protect the structure of your home but also the contents inside it - furniture, electronics and other personal possessions. Many policies also include loss of use coverage. This will kick in if your home is uninhabitable due to a covered claim, and can reimburse you for extra living expenses while the home is being rebuilt or repaired.

If you live in an apartment or rent a home, your landlord likely purchased coverage for the building itself. It's up to you, however, to protect your belongings. Fortunately, standard renters policies are relatively inexpensive and can provide coverage for your personal property in the event of a fire.

2. Dwelling fire coverage

Dwelling fire coverage is a bit different than the coverage in a standard home or renters insurance policy. The main difference is that dwelling fire coverage is generally less comprehensive. Like standard home insurance, dwelling fire coverage protects the building itself and other structures on the property, and offers loss of use coverage.

Unlike standard home insurance, however, dwelling fire coverage often doesn't include protection for your belongings, and offers no personal liability protection. Dwelling fire coverage generally is best used to protect a vacation home or vacant home.

How to file a claim

No matter how much insurance you have or how careful you are, fires can happen. If your home is damaged by fire, you'll need to file a claim.

First, take photos of the damage. Proper documentation can help the claims process go smoother. Then, you'll need to contact your insurer to actually file the claim. Make sure you do this promptly. Afterwards, your insurer will likely send a claims adjuster to your property to assess the damage and put together an estimate.

Next come the repairs. The whole process can take anywhere from weeks to months, and it's important to stay organized throughout. Keep all emails, invoices, estimates, and any other documents related to your fire damage claim.

To make the process smoother, it helps to have an up-to-date home inventory. A home inventory is a detailed list of all the items in your home. If yours ends up being a pile of ash, a home inventory can help you remember everything that needs to be replaced.

To prevent the list from being burned up with the rest of your home's contents, store an electronic copy somewhere. There are even home inventory apps that help you create and keep the list right on your smartphone.

Be sure to continue reading this article here.

Market Update

U.S. markets weak

September was a weak month for U.S. markets, with the Dow Jones Industrial Average posting a loss of 1.35 percent; the S&P 500 Index declining further, down 2.47 percent; and the Nasdaq dropping 3.27 percent. All three indices bounced around breakeven levels throughout most of the month before finally declining in the last week.

All three indices were also down for the quarter, with September extending the losses from August, after first seeming to show a recovery. For the quarter, the Dow was down 6.98 percent, the S&P 500 down 6.44 percent, and the Nasdaq down 7.35 percent. This was the weakest quarter since 2011.

Monthly weakness was driven by both fundamental and technical factors. Per FactSet, at September's end, the estimated earnings decline rate for the third quarter was 4.5 percent-well below the expected 1-percent decline forecast as of June 30. Nine of ten sectors, led by materials, now have lower expected earnings growth due to downward revisions. If earnings decline as expected, it will be the first back-to-back quarterly earnings decline since 2009.

Technical factors that led to weakness include the S&P 500's strong decline through the 2,000 level in August and consequent inability to recover in September. Historically, the stock market has either moved strongly through major breakpoints or hesitated and dropped, and the S&P 500 has had a difficult time rising back above 2,000.

Another sign of technical weakness is that, in recent weeks, growth companies and smaller stocks have under-performed, with investors shifting focus to larger, safer companies rather than betting on continued growth. Growth companies in all size ranges have under-performed and smaller companies have under-performed their larger counterparts, suggesting that investors have become increasingly risk-averse, which is a poor foundation for a sustained advance.

International markets suffered much more than U.S. markets. The MSCI EAFE Index continued its weak performance from August, declining 5.08 percent in September on growing political stress regarding Europe's refugee crisis. Although the European Union (EU) is requiring its member nations to accept refugees, the mass movements have threatened a breakdown of the EU's open borders policy and led to political confrontations over where refugees will be placed. The political conflicts have been mitigated, however, by continued slow economic recovery. For the quarter, the EAFE was down a steep 10.23 percent.

Emerging markets performed worst of all, with the MSCI Emerging Markets Index down 3.26 percent for the month and down a significant 18.53 percent for the quarter. In addition to troubles in Europe, China's growth continued to slow, causing damage not only to China's markets but also to the economies of other emerging markets dependent on China's growth. Just as with the U.S. indices, the drop in September continued losses from August; in this arena, however, July also was a losing month.

Unlike equities, core fixed income showed a small uptick for the month, with the Barclays Capital Aggregate Bond Index up 0.68 percent, taking the quarter as a whole to a small 1.23-percent gain. The increase was driven by a decline in interest rates in September, with the yield on the 10-year U.S. Treasury bond dropping from 2.17 percent to 2.06 percent.

Despite the drop in rates, other sectors of the bond market declined. The Barclays Capital U.S. Corporate High Yield Index, in particular, lost 2.60 percent for the month and 4.86 percent for the quarter on weakening credit conditions in the energy and materials spaces.

U.S. economy shows signs of slowing

Good news for the U.S. economy continued in September, but signs of slowing growth were apparent. Positive data points included rising auto sales-at 10-year highs-and very strong results from the service sector, which constitutes seven-eighths of the economy and where the primary business surveys remain at close to 10-year highs. Personal income and spending also showed reasonable gains, with strong underlying details.

Other news, however, was mixed. New home sales continued to grow at a strong rate, and confidence in the home building industry set a new high, but existing home sales were down. The pattern of mixed data continued in retail sales, which grew less than expected, although that was largely due to declines in gasoline prices.

The weakest part of the month was employment. Job gains were well below expectations, at 142,000, far less than the 200,000-plus levels of recent months. At the same time, other employment metrics were strong, with a record number of job openings posted and initial jobless claims remaining low. In addition, the NFIB Small Business Optimism Index rose, which is important, as small companies are a major driver of hiring. All in all, this suggests that employment continues to grow, but it does inject a note of caution.

Consumer confidence also showed mixed results for September. The University of Michigan Consumer Sentiment Survey dropped significantly, from 91.9 to 85.7, the largest decline since the government shutdown of December 2012. On the other hand, the Conference Board's Consumer Confidence Survey, which was released later in the month, showed a surprise increase from already strong levels. Even given this discrepancy between the two measures of confidence, growth appears likely to continue, as the Michigan survey indicated continued spending growth.

Despite economic gains, given the signs of a U.S. slowdown and risks elsewhere in the world, the Federal Reserve (Fed) decided to postpone raising rates, a somewhat surprising decision that rattled markets. The Fed did indicate that it would likely raise rates this year, but the continued uncertainty about timing, along with fears regarding what the Fed is seeing that prevented it from raising rates, likely contributed to September's market turmoil.

Geopolitical turbulence hits markets

As previously mentioned, a big international story for September was the growing tide of refugees fleeing the Middle East and heading for Europe, creating new confrontations between Germany and other EU members, even as the continent still faces economic concerns. Beyond Europe, the story of slowing growth in China continued to have an impact well beyond China's borders, with the slowdown extending to emerging economies.

Commodity prices continue to decline

A big part of the economic impact from China's slowing growth has been commodity price declines. Many emerging markets, in particular, have built their economies around a constant growth in demand for commodities. But with China's economy slowing and its leaders moving away from their focus on infrastructure and exports, there has been a double hit to demand, with the consequent damage wreaked on commodity-selling countries and companies.

In addition, the fallout from China's slowdown has been particularly bad because the current recovery marks the first time that China's economy-not that of the U.S.-has provided the majority of global growth. With China slowing, there is no replacement for the lost demand from its spending. For oil, especially, prices have remained low both because of a drop in demand-as China's and Europe's growth has slowed-and an increase in supply from the U.S. and other countries.

Low prices have also led to negative consequences both for countries, as employment and revenue from commodities have declined, and for companies, which have experienced losses to their profits and balance sheets. In the short term, this trend has forced countries to struggle to adjust to the new reality and companies to try to match production with demand. In the longer-term, lower commodity and energy prices typically lead to faster growth, which suggests a potential positive impact that may in the future offset the current carnage.

Investors pull back as risks rise

September is historically a difficult month, and that has been the case this year, particularly in international markets. Although the U.S. has suffered less damage so far, we have experienced market declines and are still exposed to growing geopolitical and economic turbulence. As China adjusts to lower growth rates and Europe struggles with the refugee crisis, the U.S. recovery will likely continue but at a slower pace. Markets can be expected to adjust to lower growth rates, and companies can be expected to adjust their expectations based on conditions in the rest of the world.

Although market price adjustments are never pleasant, they are an inevitable result of investors adjusting risk exposures and in the long run are usually not significant. Investors with properly diversified portfolios have enjoyed the market run-up in the past several years and should be prepared to take an inevitable downturn in stride.

On balance, more turbulence looks quite possible; however, the U.S. remains well positioned for the future, and U.S. investors should continue to participate in the growth.

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

All information according to Bloomberg, unless stated otherwise.