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What's Happening Now
 

Is whole life insurance an obsolete product? What are the best alternatives?

 

     
How much could you quickly cut from your monthly budget if you experienced a financial crisis? A sudden job loss, or a medical emergency could leave a family without it's usual income.

 

 
Is organic food worth the extra cost? While the organic label on food means that it was grown according to regulations, there is still rampant debate about the health implications of organic growing. 
  
 


Don't like it? Tips on how to make holiday gift returns.


  


"Star Wars: The Force Awakens" is poised to set a new world record... for what?

   

 
How to make 2016 a financially fantastic year. Now is a great time to step back, look at what you did-or didn't do-with your money and make any necessary changes to make the most of your money in 2016.

 

     
The dysfunctional state of the US consumer credit-score model: The use of hundreds of credit-score models across U.S. means your score can swing by 100 points or more.

 
  
It's been a tough year for most investors, including the most legendary one out there. Why did Warren Buffet have a year to forget?
 
 


What are the five cities that most billionaires call home? There's a big surprise in this list!
 
 

     
"Who's an expensive boy? You are!" Here are six ways to save money on your furriest family member.

 


Research before you give! Here are seven non-profits to avoid and why.

 


Twelve things to buy used: You can save a lot by buying used rather than new. Many pre-owned items cost 50% to 75% less than comparable new items. 
 
 


Here's how to save $526 on restaurant meals. Is there a way to avoid paying full price at restaurants you already regularly go to? 

 


An alarming number of big U.S. stocks lost half their value in 2015. Which ones were they? The stunning declines come despite the fact that the broader U.S. market ended the year not far from where it started. 
 
   


Seven things you need to know about your money. To get ahead in life - to take control - you have to get real and see things for how they really are. 
 
 


Why is there a chip In my debit/credit card? You need to know what this new technology is all about. 
 
 
January 2016

 

We're starting off the new year with a newsletter I think you'll really enjoy.
 
I was intrigued by the article (Here's How I Saved $526 on Restaurant Meals) by a woman who lives in New York City. She's in her 20's and realized just how big a portion of her budget she was spending on food. She made it her goal to figure out how to continue going out with friends (and/or ordering in), while also bringing down overall food expenses. Why not check out some of the apps and links to articles that she suggests?  Let us know if you were able cash in on the savings as well as she did!   

Please contact us at at 614-888-2121 or 877-389-2121 toll free, or by e-mail at [email protected] with any comments or questions.

 Do you admire Warren Buffet as an investor? He had a rough year in 2015, like many. The last time his company did so poorly was in 2008, when both classes of Berkshire's stock fell 32%. But as bad as 2008 was for Berkshire, Buffett still wound up out- performing the broader market that year. The S&P 500 plunged 38.5%. This year, Buffett is lagging the market. Here at Chornyak & Associates, we like to remind investors that we must have a long-term perspective.  If history is any guide, Buffett will bounce back next year.
 
These stories are only a few examples of all of the interesting and informative articles we've gathered for you this month in What's Happening Now. Don't miss the the feature articles below that deal with new year's resolutions, your career, and living with millennials.

Sincerely,

Joe


Nine things you can stop doing in 2016


Emma Court of MarketWatch tells us that many of the things we're planning to do better in the new year - eat healthier, exercise more, procrastinate less, be smarter about money -  may not be necessary.
 
Your gluten-free diet

In the life cycle of food trends, gluten-free diets could be headed the way of pomegranates: in every supermarket but past the trendy-food expiration date.

Only about 1% of the population has celiac disease, an autoimmune disease that makes it difficult to process gluten products. For the rest of us, Yale University lecturer Vikram Mansharaman says, the gluten-free choice is neither healthier nor cheaper.

But no diet may be safe - the World Health Organization recently reported meat-heavy diets like the paleo and Atkins diets could have high cancer-causing potential.

Skim milk, quinoa, chia seeds and sriracha are other foods that have passed from food-blogger staples to mainstream plates - and so could be on their way out of your local Whole Foods' aisles. We could also be saying sayonara to labeling trends like "organic" and "GMO-free" in the near future, although food-company executives told the Wall Street Journal earlier this year that these trends are difficult to predict.

"You just can't always tell between a Moroccan stew and Thai curry what is going to be a hit," Michael Goodman, Campbell Soup Co.'s director of innovation, was quoted as saying.

Doing sit-ups

Ah, the old gym-class standby.

The reason to stop is the risk of back injuries, many in the world of fitness say. The repetitive motion can put force on spinal discs and consequently, nerves, a professor of spine biomechanics told the Wall Street Journal.

Fitness experts instead recommend trying crunches, modified sit-ups using exercise balls or - even better - the plank pose, which uses the broadest range of muscles.

The sit-up, Pete McCall, spokesman for the American Council on Exercise, told the Wall Street Journal, is "an antiquity of exercise best left in the dustbin of fitness history." Something to consider at your next appointment with New York Sports Club CLUB or Planet Fitness.

Making your bed

Dust mites are just about as repugnant as they sound. They are microscopic bugs that eat discarded skin flakes and thrive in warm, humid places. So if making your bed is a planned New Year's Resolution, think about how cozy dust mites will be in the warmth of those pulled-up covers.

By contrast, United Kingdom scientists found "something as simple as leaving a bed unmade during the day can remove moisture from the sheets and mattress so the mites will dehydrate and eventually die." Dust mite buildup can also trigger reactions in those with allergies or asthma.

So in not making your bed, you may simultaneously keep your nasal passages happy and the dust mites at bay.

Flossing

This one could break your dentist's heart.

Ellie Phillips, a dentist and the author of "Kiss Your Dentist Goodbye," told the Daily Mail that you can give up on flossing. But to fight gum disease, you need to replace flossing with mouthwash - and she recommends a three-step process (with three different products) before and after brushing.

To be sure, the desire of most dentists is that you'd stop flossing the wrong way. The floss is supposed to curve against one tooth in a C shape, where it should be rubbed up and down, according to the American Dental Association.

Drinking diet soda

Turning to Diet Coke or Diet Pepsi for help losing weight? It may be time to think again. A study this year found the amount of diet soda consumed by study participants was closely associated with escalating stomach fat over time. It's part of a growing body of evidence that drinks previously viewed as guilt-free may have negative consequences after all.

Scientists still aren't sure exactly why low-calorie drinks may result in weight gain, but the study's senior author told Time that the results are especially acute for those who are already overweight.

Dr. Helen Hazuda, professor of medicine at the University of Texas Health Science Center at San Antonio, described it as a situation of "double or triple jeopardy."

"By drinking artificially sweetened beverages, it's actually totally counterproductive," she was quoted as having said.

Continue reading the article here.



"Hanging in there" is not a career strategy


Most of us grew up in a working world that doesn't exist anymore. It used to be a good thing to stay in one job for a long time. Now it's neutral at best, and often a negative thing. The longer you stay in one job, the less you learn, unless you are lucky or make a point of seeking out new experiences. Liz Ryan of Forbes gives us the lowdown on the current career marketplace.

When you aren't learning something new, your resume is degrading.

When you stay at one job for too long, you become afraid of the outside world. We see this in our coaching work. People say "I'm afraid to job-hunt." Who can blame them? In the old working world, we only had to job-hunt every five or ten years, or even less often.

Now we are learning that in the new-millennium workplace, we're always job-hunting. We always have to keep one eye on the talent marketplace, because our job could go away or become untenable at any moment.

We have to treat every job like a consulting engagement. We have to know exactly what we're trying to learn, acquire, and accumulate in each assignment. We can't afford to go to sleep on our careers!

We'll be fine if we know how to jump from lily pad to lily pad, but most of us don't. We want to hunker down and make the best of a bad situation, instead. We cling to the past instead of marching into the future.

In my columns and podcasts I share advice for people in bad situations, and I often tell them to look outside their own company for a new opportunity. The more we view ourselves as consultants and business owners, the bigger our muscles will grow.

We'll become more valuable to employers and clients, but people who are stuck in fear can't see those benefits. They may feel that any kind of change is always a bad thing.

They can't see how their fear of change colors their thinking. They'll tell you "Don't look for a new job. Stay put!"

Friends and family members will tell you "So, your job isn't that great, but what is? Hang in there!"

What could "hanging in there" possibly get you? What would you be "hanging in" for?

Is there a pot of gold at the end of that rainbow? Of course not!

Even the traditional corporate retirement package and the gold watch are no longer available to most people,  except for government employees. When's the last time you were invited to a non-government worker's retirement party?

"Hanging in there" is not a career strategy - it's just the opposite.

It's a fruitless, pointless attempt to keep reality at bay. Companies fail when they try to ignore reality, and people hurt themselves the same way.

Continue reading here.
 

How to stop bankrolling your grown child


Are you facing a life situation that involves millennials living at home after college? Andrea Woroch of nextavenue suggests seven ways to guide your grown children toward financial independence.

Facing record student loan debt and challenging earning potential while representing a whopping 40 percent of nation's unemployed, it's no wonder today's young adults are struggling to get a foothold on their personal and professional lives after college. As a result, these Gen Y'ers are delaying major life events like buying a home, and are often relying on Mom and Dad for money.

To alleviate some of the financial pressure their Millennial kids are experiencing, many boomer and Gen X parents keep bankrolling them well into adulthood.

While handouts may seem helpful, experts advise against excessive financial support without a strategic plan in place, since doing so may further hinder self-sufficiency.

Shannon Ryan, a certified financial planner and founder of TheHeavyPurse.com, points out that parents may not have created an adequate sense of ownership around money when their children were young and need to start.

Incentivize your child by offering a savings match - like an employer's 401(k) match - upon reaching a specific goal or milestone.

"Though it may be difficult to initiate change with adult children after decades of being a human ATM, holding yourself accountable about the role you played is important," she says. "Creating a game plan together will trigger the move toward financial independence."

If you're among the millions of parents footing the bills for your adult children, it's time to reevaluate this approach and figure out a better way to guide your children toward a secure financial future. Consider the following seven tips to break the dependence:

1. Let your child know the most financial assistance you'll provide. It's important to set a limit on how much money you're giving, advises Jeff Rose, a certified financial planner and founder of GoodFinancialCents.com. He suggests parents treat financial support like an allowance and cut it off at a certain point.

An endless flow of cash enables poor spending decisions and doesn't teach money management. Work with your son or daughter to devise a budget by reviewing essential living expenses and debts. Then, determine a reasonable amount for support and be ready to say "no" if your kid asks for more.

2. Schedule monthly financial reviews. Use them to review the newly established budget and your child's financial progress. Not only do regular money meetings keep your kid accountable, but they can be motivational, especially if he or she realizes the gains made toward slashing expenses or paying down debt.

The reviews are also good times to ensure your money is being used wisely. Over time, gradually reduce your contributions so you can get your child to financial independence.

3. Set goals and match savings. Learning how to establish short- and long-term savings goals is crucial. Help your son or daughter outline these goals, like buying a car or saving for a down payment, along with the steps needed to reach these objectives.

Incentivize your child to stick with the plan by offering a savings match - like an employer's 401(k) match - upon reaching a specific goal or milestone.

4. When loaning money, make it a business transaction. If you're planning to loan your child money, don't do so without some type of written agreement. Rose suggests that you make your children sign a promissory note to ensure you get paid back - with interest. Outline a repayment plan along with a deadline so your kid knows to take your money seriously.

5. Suggest a side gig. When I was living and working in New York City in my early 20's, I could hardly make ends meet. Though my job kept me at the office past 9:00 pm most nights, I still found time to babysit and waitress on the weekends, which helped me pay down debts faster.

As part of your support agreement, encourage your son or daughter to seek part-time work, like a retail or bartending side hustle. There's always TaskRabbit.com for hourly work, like helping move boxes or grocery shopping. The extra cash comes in handy and teaches the benefit of maintaining multiple income streams.

6. If your son or daughter is living at home with you, charge monthly rent. Stow the money away in a high-yield, online savings account. When your kid is ready to move out, you'll then be able provide him or her with some money toward buying a home or paying for grad school.

7. Teach smart spending habits. After years of penny pinching, many college grads fall into the trap of living large as they begin earning steady income. So offer ways to help them take a big bite out of their monthly budget. Provide a resource of tools to save on everyday purchases like Couponsherpa.com for grocery coupons and the RedLaser app for in-store price comparison.

The sooner you do these things, the better for you and for your grown child.


Market Update

A disappointing year for financial markets

U.S. markets disappointed for the first time in years, with weak results for December and 2015 as a whole and despite closing with a very solid fourth quarter. The Dow Jones Industrial Average, S&P 500 Index, and Nasdaq were down in December-1.52 percent, 1.58 percent, and 1.98 percent, respectively. But all were up strongly for the quarter, with the Dow rising 7.70 percent, the S&P 500 gaining 7.04 percent, and the Nasdaq doing best, up a robust 8.38 percent.

For the year, the Dow was up a modest 0.21 percent and the S&P 500 did only slightly better, gaining 1.38 percent. The Nasdaq was up 5.73 percent for the year, though this was well below average annual return levels.

The disappointing results also came despite a slow-but-steady economic recovery. After a weak first quarter, economic growth accelerated, with year-over-year gross domestic product growth running at between 2 percent and 3 percent. Even with this continued growth, however, corporate revenues and earnings actually decreased in the most recent quarters. Moreover, expectations for future corporate growth were adjusted downward. Still, stock prices stayed high until year-end, as did market valuations. Technical factors were generally weak at the end of December, with both the Dow and S&P 500 closing below their major moving averages and the Nasdaq approaching those levels.

Looking forward, conditions may prove more favorable. With the energy industry adjusting to lower oil prices-and the possibility that those prices might increase-one major headwind may abate. Similarly, growth in consumer spending should help domestic results, even as companies adjust to the effects of the strong dollar. If these factors merely flatten out, they will pose less of a headwind to markets than they did in 2015.

International markets underperformed U.S. markets over all time periods in 2015, with December a weak month just as it was in the U.S. The MSCI EAFE Index, which represents developed international markets, was down 1.35 percent for December, leaving a gain of 4.71 percent for the fourth quarter. The MSCI Emerging Markets Index fared worse, down 2.48 percent for December and posting a marginal 0.26-percent gain for the quarter.

For the year as a whole, international developed markets were down 0.81 percent, and emerging markets were down 16.96 percent. Technical factors remained weak, with both indices ending the year well below their 200-day moving averages. Lukewarm economic factors, coupled with political difficulties around the world, suggest that the technical weakness may hang on through 2016. Continued low prices for oil and other commodities hit emerging markets hard, while rising political conflict and economic stagnation, particularly in Europe, weighed on developed markets.

Fixed income also had a relatively weak 2015 in the U.S. The Barclays Capital U.S. Aggregate Bond Index was down 0.32 percent for December and down 0.57 percent for the fourth quarter, which resulted in a gain of only 0.55 percent for the year as a whole. This weak performance was largely driven by volatility in interest rates throughout 2015. Rates on the benchmark 10-year U.S. Treasury bond increased from 2.12 percent to 2.27 percent during the year, with interim declines to a floor of 1.68 percent in January and a peak of 2.50 percent in June. Rates in the last quarter showed a greater increase, from 2.05 percent to 2.31 percent, spurred by the Federal Reserve's (Fed's) decision to increase short-term rates in December.

The increase in rates was smaller than it might have been, largely engendered by uncertainty elsewhere in the world and ongoing stimulus from central banks in China, Japan, and Europe. As the Fed slowly moved out of the market, others stayed in or moved to stimulate further.

Economic recovery continues slow but steady

The major economic story for the fourth quarter was the Fed's decision to raise target interest rates, signaling that, in its judgment, the economy was strong enough to accommodate a move toward normal interest rates. Although concerns remain and the Fed continues to keep short-term rates at very low levels, the question has now moved to how quickly those rates will increase-and that depends on the continued improvement of the economy.

Despite weakness in manufacturing and energy, the service sector-which roughly constitutes seven-eighths of the economy-performed strongly, generating substantial improvement in employment. More than 2.6 million jobs were created in 2015, extending a strong run from 2014. Further, November's employment report showed 13.7 million jobs created since the 2008 financial crisis versus 8.8 million jobs lost. The report also showed that 2015 will be the third year in a row with an average of more than 200,000 jobs created per month and that the overall unemployment rate has dropped to the precrisis level of 5 percent.

At the end of the year, even the major remaining employment concern-slow wage growth-was showing signs of improvement, accelerating to new highs. Still better, wage income growth was substantially faster than wage growth itself, based on strong job creation and labor demand. And even though consumer spending growth was slower than wage income growth, savings rates were approaching previous high levels, suggesting that spending could accelerate. With consumer spending accounting for more than two-thirds of the economy, the foundation for economic growth looks solid heading into 2016.

Low oil prices support continued growth

Most observers had expected oil prices to rebound sometime in 2015, but they remained low. After declining about 50 percent from their 2014 peak, spot prices stabilized in mid-2015 at $55 to $60 per barrel, only to drop again in the second half of the year to below $40 per barrel.

Although we have no direct evidence of increased consumer spending as a result of lower gas prices, the fact that auto sales rose to more than 18 million vehicles in 2015 suggests that their effect has been positive. Lower energy prices also benefit companies, in the form of lower costs, which helps profit margins and potentially stock prices.

Looking ahead, even though the previous decline in oil prices has worked its way into the economy, most of the more recent decline has probably not, suggesting that economic growth may continue to accelerate. Certainly there are downsides to declining energy prices in the forms of lower investment and hiring, but many of these drawbacks have made their marks, so the overall impact of lower oil prices should continue to be positive.

Lower oil prices will also benefit other countries, especially China, Europe, and Japan. These economies continue to stagnate, and lower energy costs will act as a much-needed stimulus, just as in the U.S. Even in countries that will suffer from lower prices, such as Russia, Iran, or Venezuela, the net effect for the U.S. is likely to be positive.

To sum things up: low oil prices won't last forever, but at this point it seems likely that prices will remain low through most of 2016, which should act as an ongoing stimulus to the U.S. and global economies.

U.S. outlook remains good, but there are risks

With the U.S. economy recovering and indicators looking good for continued growth, we begin 2016 with a positive outlook. At the same time, substantial risks remain, and investors should be cautious.

Viewing the world as a whole, China's growth continues to decline, and both Europe and Japan remain at risk economically. In the case of Europe, the risks are also political, as the tide of Syrian refuges still stresses the European Union. Perhaps most worrisome is the Middle East, where ISIS is expanding and exacerbating the Sunni/Shia confrontation.

Here in the U.S., even with the strong economic fundamentals, there are signs of a slowdown. Corporate fundamentals may be weakening, though stock market valuations remain high. Expected earnings growth has already been downgraded for 2016, and further downgrades are possible.
 
All of these risks notwithstanding, we enter 2016 in a much better place than we were one year ago. The U.S. economy is solid, and the trends are good. Risks are omnipresent, but with a solid foundation we are well positioned to overcome challenges. As always, a long-term perspective and diversified portfolio remain the best ways to take advantage of investment opportunities and overcome risks.

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

All information according to Bloomberg, unless stated otherwise.