www.chornyak.com                                                                                     [email protected]

What's Happening Now


This is what's causing the new housing crisis.

 
 

The current situation with eldercare does no
t serve seniors well nor does it those who provide them care. Our medical system caters to extremes, taking care of you most quickly if you are critically ill, covering you financially only if you are destitute.  
 
 


Newspapers have settled on a strategy to stop withering away: feast on each other for survival over digital apocalypse. Pressure to merge grows as U.S. publishers divest TV assets.

 

 
Chinese companies, driven by favorable government policies and a desire to gain overseas assets, are on an unprecedented acquisition spree in the U.S.  
  
 

 
When it comes to your health, you already know how important it is to eat well and stay active. But other hobbies and lifestyle changes - that have nothing to do with diet or exercise - can also offer a big payoff for your well-being. 
 
  


If you have ever worked for a micro-manager you'll probably never forget the experience. The challenge is keeping your spirits high while having your work questioned. 
 
   


Can we retrieve memories lost to Alzheimer's? Scientists have recovered memories in mice. What about humans? 
 
 

 
Who wins with a $15 minimum wage? California's proposal would be the highest minimum wage we have seen in the United States.

 

     
Are millennials early adopters of a marriage-free future? There's something going on with marriage in America. At a time when it's available to so many, it appears to be taken seriously by so few.

 
 
Seven great part-time jobs for retirees: Once you retire from your career job, you'll have time to make that fantasy happen. 
 
 


Twenty-five purchases you'll never regret: You won't be a victim of buyers' remorse when you spend your money on one of these items.
    
 


American dream redefined: Good-bye picket fence, hello financial stability.
 
 
  

How big Is the underground economy in America? While the underground economy - also known as the shadow or black economy - may conjure up images of drug deals and prostitution rings, the term actually has much broader scope.

 


Here are some dead brands from the '90s that are making a comeback.
 
   

Which country proves that the wealth of a nation has nothing to do with the quality of health care?
 
 


See why this 800-square-foot home is on the market for $500K. 
 
 
April 2016

Welcome to another issue of our newsletter.

This month Brittany Hogue, Director of Community  Relations for Homewell Senior Care, reminds us that caregiving for a loved one, both short term and long term, can be a stressful and overwhelming task both financially and physically. Choosing the right home-care company can really alleviate stress of that burden, while keeping your relationship with your loved one intact.

Be sure to read the article below, entitled "Need help at home for a loved one?" for some essential suggestions to help you in this difficult life situation. If you would like additional information about HomeWell and the services that they provide, please contact Brittany or Lisa at 614- 528-0088 (HomeWell Senior Care, 6649 N. High St., Suite 200 Worthington, OH 43085).

In our feature article from Commonwealth Financial Network (below), we provide some important guidelines for shopping around for the best deal on a home mortgage loan.

For example, you would be advised to do your looking on a Friday because if you want more time to consider your options, you can relax because prices will generally hold through the weekend.

Other articles on the left that are worth your time include: a breakthrough in the treatment of Alzheimer's disease,
the future of print newspapers, hobbies and lifestyle changes required to stay healthy, quality healthcare in a third-world country, and much more.
 
You can contact us during working hours at Chornyak & Associates with questions about financial management or comments on our newsletter: 614-888-2121 or 877-389-2121 toll free, or e-mail at [email protected]. 
 
Sincerely,

Joe

Need help at home with a loved one?

 
 
Being suddenly faced with the decision on how to get help with a loved one can be challenging. We often don't know where to start navigating the healthcare world. Many times when someone is looking for some type of healthcare, it is the result of a trauma or change in condition due to surgery or an illness. Home care is an ever-growing solution for this need.

Home care refers to personal care services that occur in your home. These services may be medical in nature, or may include non-medical, hands-on support like patient transfers or personal care assistance. Home care may also include domestic tasks, such as cooking or cleaning. Most individuals prefer to stay in the comfort of their own home, whether you are recovering from an illness, elective surgery or simply want to age in place home care is a great option. People often fear the possibility of home care because it symbolizes a loss of dignity. It is important that home care services are an enhancement of dignity, not a loss of it. Each act should enhance the lives of patients in their home, allowing them to experience life without the struggles of daily tasks. 
When choosing a non-medical company in your area, make sure to always do the appropriate research. Do an Internet search by going first to the Better Business Bureau and any other sites that have ratings and reviews. This will give you good guidelines on whom to call and ask further questions.

Once you acquire the names of several providers, you will want to learn more about their services and reputations. Following is a checklist of questions to ask providers and other individuals who may know about the provider's track record. Their insight will help you determine which provider is best for you or your loved one.
  • How long has this provider been serving the community?
     
  • Does this provider supply literature explaining its services, eligibility requirements, fees, and funding sources? Many providers furnish patients with a detailed "Patient Bill of Rights" that outlines the rights and responsibilities of the providers, patients, and caregivers alike.
     
  • How does this provider select and train its employees? Does it protect its workers with written personnel policies, benefits packages, and malpractice insurance? Do they provide workers' compensation insurance or are you responsible to pay if a caregiver should become injured on the job?
     
  • Does this provider include the client and his or her family members in developing the plan of care? Are they involved in making care plan changes?
     
  • Is the client's course of treatment documented, detailing the specific tasks to be carried out by each professional caregiver? Does the client and his or her family receive a copy of this plan, and do Care Managers update it as changes occur? Does this provider take time to educate family members on the care being administered to the client?
     
  • Does this provider assign supervisors to oversee the quality of care clients are receiving in their homes? If so, how often do these individuals make visits? Who can the patient and his or her family members call with questions or complaints? How does the agency follow up on and resolve problems?
     
  • What are the financial procedures of this provider? Does the provider furnish written statements explaining all of the costs and payment plan options associated with home care?
  • What procedures does this provider have in place to handle emergencies? Are its caregivers available 24 hours a day, seven days a week?
Home care services such as HomeWell offer "care management." This provides a higher quality level of care in this challenging industry. Each client is assigned a nurse as his or her care manager. The care manager insures that all the clients' needs are being met by communicating with the client, the caregiver, and the primary contact person. 
  

Mortgage-shopping basics


In this month's feature article, Commonwealth Financial Network points out that whether you're buying your first home or looking to purchase a vacation home or another property, it's important to determine how much debt you can comfortably take on and to compare mortgages to find the most appropriate option for your situation.

The following tips can help: 

  • Be realistic about what you can afford. 

    As with any purchase, it's important not to spend more than your budget allows. This is especially true with a mortgage. Review your essential expenses to estimate what you can reasonably pay on a monthly basis-and be sure to factor in not only your mortgage payment, but property taxes, utilities, insurance, and maintenance as well. You should have enough left over to be able to set aside money for an emergency fund. And don't forget to consider your discretionary spending habits and hobbies; taking on a home is a big financial commitment, and it may not be worth it right now if you have to give up too many of the things you love to do.
     
  • Know the difference between a mortgage lender and a mortgage broker.
     
    Mortgage brokers find mortgage lenders for you; they don't lend money directly. Brokers have access to numerous lenders and choices, but they charge a fee for their services. If you plan to work with a broker, be sure to ask about this cost. You can use more than one broker at once-or even a combination of brokers and lenders-to help you in your search.
     
  • Shop around, especially on Fridays.

    In addition to checking with your bank, shop around
    for mortgages at credit unions, mortgage companies, and even online. Since mortgage prices change daily, it's important to review mortgage terms on the same day. If you want more time to consider your options, do your looking on Fridays, as prices will generally hold through the weekend.
     
  • Compare.

    Be sure you understand the complete cost of each mortgage, including mortgage rates, points, and fees. Ask all prospective lenders for the same information-loan amount, loan term, and type of loan-so you can effectively compare your options. For adjustable rates, ask lenders to calculate how much your monthly mortgage payments will be for one year, five years, and so on.
     
  • Negotiate.

    Once you've found a mortgage lender and loan, start negotiating for the best possible deal. Don't hesitate to ask your mortgage lender or broker to put all the costs of the mortgage in writing, and consider asking them to waive or reduce the mortgage fee or to lower the rate or points.
     
  • Lock in your rate.
     
    After negotiations have been finalized, ask your broker or lender for a written lock-in to protect you from an increase in the rate while you complete the mortgage process. If you have to pay a fee for this, you can generally get a refund at the mortgage closing. If the mortgage rate decreases before closing, you may be able to ask for some kind of adjustment.
     
In addition to following these tips, get advice from people you trust who've been through the process before. Friends and family members are one resource; your real estate agent can also provide referrals to trusted lenders with whom he or she may have long-term relationships. You might also wish to consider hiring a real estate attorney to help you review documents before you sign them.

Taking on a mortgage is one of the biggest financial commitments you'll make in your lifetime, yet there is no denying the feeling of independence that comes with purchasing a home. With research and help from trusted sources, you'll be well on your way to fulfilling the dream of home ownership.



Four aggressive moves in your 40s to achieve long-term financial goals


Kiplinger focuses on the 40s as a time to concentrate on your financial planning.

The kids are old enough to drive themselves to band practice, and you're planning an anniversary getaway with your spouse. Life is good. But college bills loom, and you're neglecting your retirement accounts as you sock away money for college.

Beef up investing.

Saving for retirement is the priority. First, max out contributions to your workplace retirement plan. In 2016, you can contribute up to $18,000 to a 401(k) or similar employer-provided savings plan (or $24,000 if you're 50 or older). But be careful. If you stash all of your retirement savings in tax-deferred accounts, you could find yourself facing a big tax hit when you retire, says Jon Meyer, a CFP in Minneapolis. Withdrawals from 401(k) plans and traditional IRAs are taxed at your ordinary income tax rate.

If you aren't contributing to a Roth IRA, this is a good time to start. Contributions are after-tax, but withdrawals are tax- and penalty-free as long as you're at least 59� and have owned the Roth for at least five years. In 2016, you and your spouse can each stash up to $5,500 in a Roth ($6,500 if you're 50 or older) if your adjusted gross income is $184,000 or less; if your AGI is between $184,000 and $194,000, you can contribute a reduced amount.

Taxable savings accounts will also help minimize your tax bills in retirement. Most investors pay 15% on long-term capital gains and dividends; investors in the 10% and 15% tax brackets pay 0%. Choose tax-efficient index funds or actively managed funds with low turnover to hold down your tax bill even further, Meyer says.

Save at least enough in your retirement plan to take full advantage of the company match. After that, says Meyer, the breakdown between taxable and tax-deferred accounts depends on your tax bracket. Workers in lower tax brackets are better off diverting some of their savings to a Roth and taxable accounts because the immediate benefit of tax deferral is less valuable. If you're in a high tax bracket--say 35%--sock away as much as you can in tax-deferred accounts because you'll probably be in a lower tax bracket when you take withdrawals.

It is also an excellent time to sit down with a financial planner and review your investment mix. Over long periods, stocks deliver higher returns than bonds. You need a healthy share of stocks and stock mutual funds in your portfolio to build a nest egg that will last 30 years or longer.

Juggle saving for college and retirement.

It's tempting to put retirement savings on hold in order to give your children the best college education that money can buy. But financial planners are nearly unanimous in their belief that this is a bad idea.

The reason is simple: You (or your children) can borrow for college, but you can't borrow for retirement, and it's difficult to make up for lost time. Working longer isn't always an option: Many people are forced to retire earlier than they planned because of health problems or corporate downsizing. If you reach retirement and you've saved more than you need, you can help your children pay off their student loans, says Andrew Houte, a CFP in Brookfield, Wis. Plus, "it's not the worst thing in the world for your kids to have some skin in the game," says Houte.

Max out your earnings. Remain technologically nimble, even if you don't work for a high-tech company. There are plenty of online courses you can take to improve your social media and digital skills. Constant Contact offers online seminars (some of them free) on how to use social media for a variety of business purposes. Many local community colleges and university extension offices provide courses designed to enhance your digital skills. You can find YouTube videos on everything from computer coding to Adobe Photoshop.

Don't focus just on how much money you take home every week.

Make sure you're taking advantage of employee benefits that could build wealth and contribute to your retirement security. Does your employer match contributions to a health savings account? Offer retiree health benefits? A pension? Houte says some of his clients have switched jobs---and even taken a pay cut---in order to work for an employer that provides better retirement benefits.

Pay off debt.

Retiring mortgage-free is a worthy goal. You'll eliminate one of your largest expenses, which means you won't be forced to take large withdrawals from your retirement savings during market downturns to pay the bills. But at this point in your life, there may be better uses for your money, especially if you have a mortgage with a low interest rate. Focus on paying off debt with higher interest rates, such as credit card balances and parent college loans.

If you still have money left over, consider accelerating your mortgage payments. You could refinance to a 15-year mortgage, or you could simply make extra payments on your current mortgage. You'll pay the equivalent of 13 monthly payments instead of 12 by dividing your payment by 12 and adding that amount to each monthly bill. Or you could simply make an extra payment at year-end. On a 30-year mortgage, making an extra monthly payment each year would reduce the term of your loan by about four years.
 

Market Update
Markets bounce back...

After a dismal start to the year, financial markets bounced back in March. For the month, the Dow Jones Industrial Average was up 7.22 percent, the S&P 500 Index gained 6.78 percent, and the Nasdaq was up 6.94 percent. For the quarter, the Dow moved into positive territory for the first time this year, gaining 2.20 percent, as did the S&P 500, gaining 1.35 percent. The Nasdaq is still down for the year, having lost 2.43 percent for the quarter.

A return of investor confidence was responsible for the March recovery. Major fears that had driven markets down earlier in the year began to ease. For example, the dollar started to pull back from its gains and the price of oil started to rise, suggesting that the global economy was not headed for a crash. With prospects for the future on the rise, investors reentered the market and bid prices back up.

Fundamentals, however, remain weak, though there are signs that they may be improving. Corporate earnings for the first quarter of 2016 have been revised down substantially, from an expected gain of 0.8 percent to a decline of 8.5 percent, according to FactSet. If this forecast becomes a reality, it would be the first time since 2009 that earnings have been down four quarters in a row. Revenues are also expected to decline, for the fifth quarter in a row, which would be the worst performance since 2008. All ten sectors are expected to show declining earnings. In short, expectations for the first quarter are very low across the board.

On the other hand, although it is quite early, 13 of 15 S&P 500 companies that have reported earnings for the first quarter have beaten expectations. During periods of low confidence such as the past couple of months, expectations often drop so low that they can be easily beaten, and that may be happening here. If so, it could well continue to be a positive for U.S. markets.

From a technical standpoint, things are on the upswing. All three U.S. indices have moved back above their 200-day moving-average trend lines, often a sign of continued strong performance. Moreover, the improvement over the first two months of 2016 has been substantial.

Developed international markets also performed strongly in March. The MSCI EAFE Index rose 6.51 percent, slightly below the results for U.S. indices but still a good result. Although risks remain in Europe-notably the possible exit of the U.K. from the European Union (EU)-strong action by the European Central Bank (ECB) helped ease financial and economic fears.

Meanwhile, the MSCI Emerging Markets Index recovered from previous poor results in a spectacular fashion, gaining 13.26 percent, based largely on a weakening dollar, which greatly reduced perceived systemic risks in those markets. For the quarter, the EAFE stayed in the red, losing 3.01 percent. Emerging markets, however, climbed back into positive territory, up 5.75 percent, making this the best-performing category.

Technically, the EAFE remains well below its long-term moving average, so risk is still there. The emerging markets index, however, moved just above its long-term trend line, suggesting that the outlook may be changing to positive for those markets.

Stock market gains did not prevent the fixed income sector from also doing well. The Barclays Capital Aggregate Bond Index was up 0.92 percent in March, spurred by improvements in credit spreads, as buyers became more confident and interest rates remained relatively unchanged. High-yield bond returns were evidence of this, as reflected in the Barclays Capital U.S. Corporate High Yield Index, which posted a substantial 4.44-percent uptick. For the quarter, however, returns for the aggregate bond and high-yield indices were comparable, up 3.03 percent and 3.35 percent, respectively. This reflected the decline and recovery of the high-yield market, which moved much as the stock market did.

...While the economy slowly improves
 
Despite the more dramatic recovery in the financial markets, the real economy continued to show signs of only slow growth. Even though job growth remained strong, averaging gains of more than 200,000 per month for the quarter, details were less supportive. Wage growth data has been mixed, and labor demand in hours worked per week has ticked down. Consumer confidence has therefore not grown at the same rates as employment during the quarter, and spending growth has suffered.

This differential was clearly reflected in personal income and spending releases. Personal income growth dropped to 0.2 percent, and spending growth was even weaker at 0.1 percent. These pullbacks after a strong previous month suggest that sustained growth in spending remains elusive. This situation matters because other sectors have also been in a slowdown.

Even as consumers continued to stagnate, there were signs of improvement in the business sectors. The ISM Manufacturing survey returned to positive territory at March-end, and regional manufacturing surveys also showed substantial improvement. With industry stabilizing as the dollar weakens, a major headwind for the economy is fading. Housing continued to show price increases, helping consumer net worth, and both housing starts and sales were well above the levels of a year ago.

Overall, in the first quarter, the economy continued to suffer from the same headwinds-a strong dollar and low oil prices-that had previously pulled the stock market down. In many respects, the damage has been deeper, as it has affected consumer confidence. We did, however, see positive signs as of March-end; for example, both major consumer surveys beat expectations, showing rising confidence levels for the period. So there appears to be a real chance for improvement into the spring.

Global recovery risks remain

Economic reports for the quarter for the rest of the world were mixed, but sentiment improved on continued governmental policy support. China's lower economic growth became less of a concern, as its government continued to increase policy stimulus, which should decrease short-term risks there. In Europe, ECB action was broader than expected, as it increased bond purchases by one-third, which should support the real economy there, although the effects on the stock markets were mixed. A sour note came from Japan, as it continued to disappoint during the quarter, with extended policy stimulus having had no apparent effect on real growth.

Despite the general improvement in the international economic picture, political risks remain-primarily in Europe. With Britain committing to an "in-or-out" referendum on EU membership, the risk of an EU breakup rose to unprecedented levels. With the continuing refugee crisis eroding the continent's open-border policy and anti-EU parties gaining strength in France, Germany, and other countries, the EU's ability to survive politically looked even more difficult.

In the short term, Europe's economic situation continued to stabilize, with Germany and other major countries still evidencing signs of growth. Smaller countries also showed general signs of progress. Nevertheless, although an EU breakup still remains unlikely, for the first time in a generation it has become a possibility worth discussing-and that continues to worry financial markets.

Oil turns around

A major factor rocking markets has been the price of oil. Prices dropped in the first quarter to levels below those in the financial crisis, but a sustained recovery to levels perceived as more normal in March suggested that, rather than signaling a global collapse, oil was merely experiencing a normal price adjustment. Although prices were down again at March-end, they remain well above the lows that sparked concern earlier this year.

Even as the price of oil has normalized, however, it is low enough to continue to stimulate spending. U.S. car sales, for example, remain at high levels, largely driven by low gasoline prices, and other areas of the world are benefiting from low oil prices even more than the U.S. Moreover, higher prices and industry adjustment mean that the economic damage will continue to abate. With prices moving up to more normal levels, and little apparent risk of an unhealthy spike, the potential for the gains to outweigh the pain continues to grow.

One big step forward after two steps back

The substantial market recovery in March was a very encouraging end to a sometimes frightening first quarter. Nevertheless, it is important to remember that, although we have largely recovered from the spike in uncertainty earlier in the year, risks remain. Even as the U.S. economy grows, the recovery is somewhat uncertain.

Politics, too, are a substantial factor. Depending on the course of the election campaign, confidence may still be at risk. Outside the U.S., a rising concern, as previously noted, is the pending U.K. in-or-out referendum. If the British vote to leave the EU, the political shock waves could be severe.

Although we expect the U.S. economy to keep growing, the continuation of last year's weak fourth quarter into the first quarter of 2016 shows that this is by no means guaranteed. In short, although markets have largely recovered from the collapse in confidence at the start of the year, uncertainty remains.

Therefore, despite the strong March market results, we believe that it is important to maintain an in-for-the-long-haul perspective. As we have seen this quarter, the markets will have good and bad months. Over time, however, a diversified portfolio focused on the long term can help investors achieve their goals.

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

All information according to Bloomberg, unless stated otherwise.