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Beware the Bears

 

September 20, 2018

 

If you’ve been paying attention to the financial news lately, you’re probably seeing a lot of ominous predictions—and they’re usually backed up by some ominous headline.  The most simplistic are saying that the bull market has now lasted ten years, so therefore it’s about to come to an end—as if bull markets come with a time limit.  Others, equally simplistic, are saying that the market has reached a new high, and, well, don’t markets fall from their all-time highs?  This ignores the fact that more than 70% of the time, a new high is followed by another new high—and ultimately, so far in history, every new high has eventually been surpassed by the next one.

 

The more credible predictions are based on the fact that the U.S. debt is exploding, or that the U.S. is experiencing an expanding credit bubble in the government, corporate sector, and also—perhaps for the first time—the youngest workers with their crushing student loans.  The Fed is committed to raising interest rates, which will make all that debt more meaningful somewhere down the road.  And then we have the meltdown in Turkey, the potential consequences of reckless trade wars on the global economy, and the flat yield curve that is in danger of inverting.

 

The most important thing to know about all this is that there is no economic consensus that the U.S. or the world economy are about to plunge into recession in the next six to 12 months.  None of these simplistic arguments or ominous headlines, separately or together, add up to an imminent market meltdown or fire sale of the stocks that you’re holding in your portfolio.  That, of course, doesn’t mean that a meltdown couldn’t happen tomorrow, but it could just as easily happen one, two or three years down the road.  And it’s helpful to remember that various pundits have been predicting a major pullback constantly over the past nine years of bull market returns.  Anybody who was spooked by these pundits would have missed out on significant gains. 

 

This is more of the same noise, albeit with somewhat scarier headlines in the background.

 

Interestingly, the indicator that is taken most seriously in economic circles is the inverted yield curve.  We aren’t there yet, but the bond markets are certainly moving toward one of those rare times when two-year Treasuries are yielding more than 10-year bonds.  Every recession since 1977 has been preceded by a yield curve inversion.

 

But is this cause, effect or coincidence?  A recent article by Laurence Siegel, Director of Research at the CPA Institute Research Foundation, acknowledges that inverted yield curves have been a pretty good predictor in the past.  But he says that in the present marketplace, there is, as yet, no pressure coming from the things that a recession corrects: high inflation, high levels of debt, rich stock market valuations (though we may be moving in that direction), and tightness in the labor market. 

 

A yield curve inversion affects the supply and demand for capital, which can have impacts on the economy which could cause a recession.  It discourages banks from doing what they were made to do: borrowing short and lending long to viable businesses that are expanding.  In the past, there may have been a more direct cause and effect than there is today.  Today, banks can turn to hedge funds and a variety of other lenders who will allow them to borrow short at reasonable rates.

 

The bigger point is that recessions are inherently unpredictable.  If we had a reliable way to predict them, we would already be in them, because companies, knowing the time and date of the recession, would pull back in anticipation of it, and simply bring it on more quickly.  The same is true of major market pullbacks; if you, or I, or anyone else knew when it was going to happen, we would already be running for the exits, triggering the pullback prematurely.

 

Bottom line: we don’t know when or where the pain will come; we only know THAT it will come.  And we know with some certainty the direction of the next 100% movement in the markets.  That may be enough.

 

 

Sources:

 

https://www.ft.com/content/58d1ce9c-b5a2-11e8-bbc3-ccd7de085ffe

 

https://www.advisorperspectives.com/articles/2018/08/20/dont-be-fooled-by-the-yield-curve

 

 

This material was prepared by BobVeres.com., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.


 


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Behind the Turkish Meltdown

 

 


August, 2018

 

What the heck is going on in Turkey?  Whatever it is, it’s having a visible effect on the markets.  After the Turkish stock market index fell more than 24% since the start of August, Eurozone bank stocks fell 24% and emerging markets stocks overall (a category which includes Turkish stocks) dropped 9.9% for the year.  A number of non-major currencies, including the South African Rand, Argentine peso, Russian ruble, Hungarian forint, Polish zloty, Brazilian real and Mexican peso were also down sharply, as was one major currency: the euro.  (See chart).  

The crisis was triggered when Turkish officials detained, and ultimately imprisoned, an American evangelical pastor named Andrew Brunson, accusing him of being a spy who was attempting to overthrow the Turkish government.  Before being detained, Brunson had been working as a pastor at the Izmir Resurrection Church, as a 23-year resident of the country.  His trial is set for October. 

American diplomats have been pushing for Brunson’s release, saying that he is basically on trial for his faith, not for any nefarious spying activities.  When the negotiations failed, the Trump Administration surprised Turkey and the rest of the world by imposing economic sanctions against what most would consider to be an allied government—a fellow NATO member whose Incirlik air base was a crucial staging ground for the air war against the Islamic state. 

The sanctions were clearly the trigger event for the collapse of Turkish stocks and the Turkish lira, but some analysts say the country was long overdue for some kind of negative event in the Turkish economy for some time.  In recent years, Turkey has been compared to Greece for having amassed one of the largest foreign debts in the world, as its banks and large companies have borrowed heavily to maintain activity in the economy.  Foreign investment has dramatically slowed, in part because the country’s authoritarian government seems often inclined to meddle in monetary decisions.  Those concerns were not exactly allayed when, in response to the crisis, Turkish president Recep Tayyip Erdogan squeezed central bank liquidity and doubled the interest rate cost in his country, in a single day, and then, by fiat, changed the rules so that speculators were no longer allowed to sell their for dollars or euros in what are known as currency swaps.  Banks were forced to stop lending lira or renew any existing contracts. 

In addition, Erdogan lashed out by doubling Turkish import tariffs on passenger cars to 120% of their value, plus a 140% tariff on alcoholic drinks, and significant tariffs on tobacco, cosmetics, rice and even coal.  In a subsequent speech, the Turkish president called for a citizen boycott of U.S. electronic products, including the iPhone. 

Is there any way out of this mess?  It seems clear that the Turkish government is backed into a corner, not wanting to look foolish or weak by releasing its American pastor.  They surely know that if or when they do, President Trump will do a very public, and humiliating, victory dance on the world stage.  We may see some kind of quiet prisoner swap involving persons detained by the Israelis, but that could be months or years down the road.   

In the meantime, the Turkish lira stopped its precipitous slide only when the oil-rich nation of Qatar stepped in to offer financial assistance in the form of a $15 billion loan.  This mess is going to blow over, but not without a few more scary headlines to come. 

Sincerely, 

Edward J. Kohlhepp, Jr., CFP®, MBA
President  

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO

 

 

 

This material was prepared by BobVeres.com., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

Sources:

https://www.reuters.com/article/us-turkey-markets-contagion/turkey-tantrum-investors-fret-over-contagion-from-lira-plunge-idUSKBN1L00YJ 

https://www.nytimes.com/2018/08/01/world/europe/us-sanctions-turkey-pastor.html 

https://www.cnn.com/2018/07/29/politics/andrew-brunson-pastor-turkey-detained/index.html 

https://www.reuters.com/article/us-turkey-usa-tariffs/turkey-doubles-tariffs-on-some-u-s-imports-lira-rallies-idUSKBN1L00BI 

https://www.theguardian.com/business/live/2018/aug/15/turkish-lira-crisis-turkey-raises-tariffs-on-us-goods-business-erdogan-markets-live 

https://www.ft.com/content/15c9909a-a089-11e8-85da-eeb7a9ce36e4


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The Growth Spike

 

The Growth Spike

 

August, 2018

 

Recent reports about the U.S. economy were a case of good news and bad news.  The good news is that, in the second three months of the year, the U.S. economy grew at an estimated 4.1%—better than the 2.2% growth posted during 2018’s first quarter.  The 4.1% figure is subject to revision as economists refine the numbers, but a 4% growth rate, if sustained through a period of years, would greatly bolster the wealth of all Americans. 

The bad news is that the economy will almost certainly not sustain this growth rate.  And despite what you are hearing from political pundits, there is also nothing remarkable about a single quarter’s 4.1% GDP increase.  As you can see from the chart, what has been labeled “historic” is actually pretty ordinary over the long term.  The economy exceeded last quarter’s level four times during the Obama presidency, in 2009, 2011 and twice in 2014.  4.1% growth would have been considered alarmingly slow during the Reagan presidency. 

Why can’t we sustain even this ordinary level of GDP growth?  Economists have noted that this spike in economic activity was not entirely unexpected, and is the result of a number of one-off events.  You might remember that Congress passed a significant corporate tax cut last. year, which kicks in at an unusual time: toward the end of a very long economic expansion, with consistently falling unemployment and rising home values.  The U.S. economy just entered its tenth consecutive year of growth.  Typically Congress will pass a stimulus package to bail the country out of recession.  One economist described the second quarter as an economy on a “sugar high.”  If you have ever had small children, you know how those often end. 

In addition, the quarter was aided (predictably) by foreign companies stockpiling U.S. goods before the threatened tariffs disrupt the flow of products across borders—temporarily boosting U.S. exports. 

Long-term, the GDP of any country is determined by the growth in the number of workers and the rising productivity of those workers as they labor at their desks and on the factory floor.  Neither of those factors are growing at anywhere near a 4% rate currently, which suggests that next quarter will see a return to the average 2-2.5% rate that we’ve experienced since 2009.  That, in turn, may explain why the U.S. stock indices actually fell on the day of the “historic” GDP announcement.  Savvy investors know better than to project one quarter’s results forward indefinitely into the future. 

Enjoy the rest of summer!

 

 

Sources: 

https://www.yahoo.com/finance/news/ap-fact-check-trump-falsely-044729698.html 

https://www.cbsnews.com/news/us-gdp-growth-touted-as-historic-by-trump-is-totally-standard/ 

https://www.cnbc.com/2018/07/27/us-gdp-q2-2018.html

 

This material was prepared by BobVeres.com., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.


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Child Identity Theft Continues to Grow: What to do


 


June 6, 2018
 
More than one million children in the U.S. suffered identity theft in 2017 according to the 2018 Child Identity Fraud Study, completed by Javelin Strategy and Research. The report found that data breaches in particular tend to be very dangerous for children. Thirty-nine percent of children who had their information exposed in a breach became identity theft victims. In comparison, 19% of adults who had their data stolen faced the same fate.
 
Children are targets for identity theft because they offer clean credit reports. Since they likely have had no credit in the past, it is easy for thieves to get approved credit in the child’s name. More than half of the children surveyed in Javelin’s study knew the person who had stolen their identity. Only 7% of adult victims could say the same.
 
And child identity theft is costly. Javelin’s report found that child identity theft caused $2.6 billion in total losses and cost victims’ families $540 million in out-of-pocket costs to help remedy the theft. But the costs don’t stop there—child identity theft victims often have to dispute the fraudulent accounts and ruined credit for the rest of their lives. Many do not even realize that they have been victims until they go to rent their first apartment or buy their first car and are told that their credit is bad.
 
What to do
 
Unfortunately, child identity theft can be difficult to prevent. The first step parents or guardian must take is to determine whether your child currently has a credit report. This can be done by sending letters to the big three credit bureaus—Equifax, Experian, and TransUnion. The letters should request that the agency do a manual search of your child’s Social Security number. The letter should contain a copy of the parent/guardian’s government issued ID, proof of parent/guardian’s address, a copy of child’s Social Security card, and a copy of the child’s birth certificate.
 
If the credit bureaus come back with reports in your child’s name with accounts you did not set up, it is likely that your child is an identity theft victim. In that case, you should immediately contact the bureaus and ask them to freeze your child’s credit and then work to close the fraudulent accounts.
 
If the credit bureaus come back with no report found, your child is safe for now. If you live in one of the 29 states that allow it, you should contact the bureaus again and ask them to open a credit report in your child’s name and then freeze it. Unfortunately, there is no nation-wide law that allows this (although it has been proposed in the House of Representatives). You can check your state’s laws here. If your state is not on the list, you should reach out to your representatives.
 
You should also take this time to talk to your children about identity theft and how to protect their information online. The earlier they begin understanding their online privacy, the better. Help them create strong passwords and talk to them about what information they should never share online.
 
Emerging threat: Your current credit freeze won’t stop this growing fraud
 
Have you frozen your credit? There may be one more thing you need to do. The Identity Fraud Institute has received multiple reports of people having fraudulent cell phone accounts opened in their names even after freezing their credit at Equifax, Experian, and TransUnion. How? The director of the Identity Fraud Institute, Carrie Kerskie discovered that mobile phone companies were not using any of the big three credit bureaus when new account applications came in. Instead, they checked applicant’s credit using the National Consumer Telecommunications and Utilities Exchange (NCTUE).
 
The NCTUE was founded by AT&T and maintains payment and account information reported by telecommunications companies. You can check your records at the NCTUE by calling (866) 349-5185. You can also freeze your file by calling this number or you can do it online. Security expert Brian Krebs, however, attempted to place the freeze online with no success.
 
The Equifax breach continues to get worse—driver’s licenses, passports, and other ID cards were also compromised. This month Equifax submitted official documentation tor the Securities and Exchange Commission (SEC) detailing exactly what was exposed in its 2017 breach. Equifax originally reported that the breach exposed Social Security numbers and dates of birth of 143 million US consumers and the driver’s license numbers and credit card numbers of some people. The new documentation indicates that much more information was exposed. Over 17 million people had their driver’s license numbers exposed, over one million had email address shared, and thousands had personal identity documents stolen, such as passports and state IDs that were uploaded to Equifax. You can see the entire list here.
 
New scams targeting seniors are on the rise. The first scam mimics local phone numbers and calls unsuspecting seniors pretending to be from the county clerk office. They tell the victim that they missed jury duty or that they were involved in a court case and are being fined. In the second scam, a call comes in pretending to be from the local police in regards to unpaid parking tickets. Again, they ask for payment now. Read this story for some more information on how you can help protect the seniors in your life from these scams.
 
Stay alert and have a safe and happy summer!
 
Sincerely,
 
Edward J. Kohlhepp, Jr., CFP®, MBA
President  
 
Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA
Founder & CEO
 
 
 
 
Source: Horsesmouth: Savvy Cybersecurity
 

 

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Crytpo-Crash

 

April, 2018

 

Last year, it was hard to turn on your computer without reading about the dramatic rise in cryptocurrency values, or see advertisements for ways that you, too, could participate in this get-rich-quick opportunity to buy virtual money that is backed by no government on Earth. 

 

It’s almost always the case that when an investment becomes wildly popular and experiences a dramatic runup in price, that is exactly the wrong time to invest.  And it turns out that cryptocurrencies were no exception.

 

While the stock markets were dropping moderately in value, cryptocurrencies lost their owners an estimated $60 billion in the last week of March, including a $20 billion drop over one dramatic six-hour period.  Bitcoins are trading below $7,000, and the trend is taking them toward their February 6 low—and, perhaps, further.  In case you’re not up on other cryptocurrencies, there’s something called Ether (now $381 per coin); Bitcoin cash ($691.48); Litecoin ($116.27) and Ripple (49 cents). 

 

The problem, as always, is figuring out whether these alternative currencies are actual investments.  For now, there are very few stores which accept them as actual money.   Bitcoin’s primary purpose in the marketplace has famously been to enable drug and weapons traffickers to buy and sell without leaving a paper trail for international police agencies to follow. 

 

Sincerely,

 

Edward J. Kohlhepp, Jr., CFP®, MBA President 

 

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO 

 

 

This material was prepared by BobVeres.com., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

Source: 

https://www.marketwatch.com/story/cryptocurrency-market-sheds-a-further-20-billion-in-total-value-overnight-2018-03-30

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Another Tariff, Another Downturn

 

March 28, 2018

 

Last weeks, stocks went on sale again, but there didn’t seem to be a lot of bargain hunters stepping in to take advantage.  The S&P 500 dropped 5.9% over five days, its worst week since January 2016.

 

This follows a by-now-familiar pattern: the Trump Administration announces tariffs—this time on Chinese imports with an estimated value of $60 billion a year—but is not specific on the details.  Traders fear that there will be retaliation against American products sold abroad, and put a lower value on the large multinational companies that account for most exports and make up most of the major indexes.

 

The last time this happened, the tariffs involved steel and aluminum, and the panicked sellers  later discovered that the impact on global trade was actually quite small, due to negotiated exemptions for major steel producing nations like Canada and South Korea—plus the Eurozone and Mexico.  This time around, the U.S. trade representative has 15 days to develop a list of specific Chinese products to slap the additional taxes onto, and there will be a public comment period before the threatened tariffs go into effect.  China has announced that it is developing its own list, and as companies (and farmers) become aware of what is included in its reported $3 billion tariff package, they will lobby for exemptions which may turn this announcement into another tempest in a teapot.

 

Meanwhile, in the wake of the Cambridge Analytica (no relation to Cambridge Investment Research) scandal, admissions that private information on 50 million people had been pilfered, and up to 126 million Americans had seen posts by a Russian troll farm on its site, Facebook shares fell almost 10%, from 176.83 down to 159.39.  This took the social media giant down from the 5th largest-capitalization company in the S&P 500 index to the 6th (behind Berkshire Hathaway)—dragging the index down even further.

 

What’s remarkable about the selloff over things that might or might not happen is that it came amid some very good news about the U.S. economy.  Durable-goods orders jumped 3.1% in February, sales of newly-constructed homes were solid, and Atlanta Fed president Raphael Bostic announced that there were “upside risks” in GDP and employment.  Translated, that means that the economy is looking too good to keep interest rates as low as they have been, which means this is a curious time to be selling out and heading for the investment sidelines.

 

Sincerely,

 

Edward J. Kohlhepp, Jr., CFP®, MBA
President 

 

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO

 

 

This material was prepared by BobVeres.com., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

 

Sources:

http://theirrelevantinvestor.com/2018/03/23/8750/

https://www.marketwatch.com/story/heres-why-the-stock-market-took-the-china-tariffs-so-hard-2018-03-22

https://www.usatoday.com/story/money/2018/03/22/stock-market-falls/448665002/

http://www.symbolsurfing.com/largest-companies-by-market-capitalization


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Much Ado About.....

 

 

March 13, 2018

 

You may have heard about the “Trump Tariffs;” that is, the proposed 25% surtax on all steel imports coming into the U.S. from foreign manufacturers, and a similar 10% surtax on aluminum.  The markets certainly noticed; they fell dramatically after the announcement, as investors feared that the move would spark a global trade war.

 

The proposed tariffs would be enacted under a loophole in the World Trade Organization rules, which generally prohibit countries from straying from their agreed-upon trade arrangements, but permit “safeguard” responses to a sudden, unforeseen and damaging import surge that could seriously damage a particular industry.  Internally, the Trump Administration plans to circumvent Congress by imposing the tariffs under Section 232 of a 1962 U.S. law that allows the President to take unilateral action based on national security concerns.  The last time Section 232 was invoked was back in 1975, when President Ford imposed taxes on foreign oil.

 

The initial panicked market reaction cooled after it became clear that the tariffs may actually never be imposed—for several reasons.  One is that there has actually been no unforeseen or damaging import surge in aluminum or steel, or really any surge at all.  The U.S. already imposes 169 trade taxes on various types imported steel, including 29 on Chinese products that were imposed during the Obama Administration.

 

Another is that the national security concern is not easy to justify, particularly after the President signaled that he would remove these tariff measures on Mexico and Canada—two of the largest exporters of steel to the U.S.—if those countries come back to the table to renegotiate the North American Free Trade Agreement.  Wouldn’t that put the country back at risk all over again?

 

A third is that the tariff is a bit like shooting at the enemy and hitting one of your fellow hunters instead.  President Trump specifically called out China for destroying the U.S. steel industry and dumping artificially-priced steel on U.S. markets.  But China is only the 11th largest source country to the U.S., accounting for just two percent of total U.S. steel imports last year.  The Chinese steel industry doesn’t depend on the U.S. market; America is China’s 26th biggest import customer, well behind South Korea, Vietnam, the Philippines, Thailand and Indonesia. 

 

Who would be hurt most by the tariff?  Canada is by far the biggest source of manufactured steel, accounting for 17% of U.S. imports.  Other U.S. allies like South Korea, Mexico and Brazil are all significant sources for U.S. manufacturers.

 

Finally, if the effort is to boost the number of manufacturing jobs in the U.S., the proposal looks like it could seriously backfire.  There are approximately 170,000 steel- and aluminum-related jobs in the U.S. currently.  But if the measure makes steel and aluminum more costly, it would lower profits for companies that employ more than 6.5 million workers—who are paid to make everything from pickup trucks to canned soup.  Worse, the measure opens the doors for the European Union and China to create targeted retaliatory measures like slapping significant tariffs on Harley Davidson motorcycles, bourbon and a variety of agricultural products that depend on exports—further endangering American jobs.

 

So while the sweeping tariff proposals make headlines, the reality is likely to be a quiet walking back from the proposal altogether or, to save face, a tariff that makes a lot of exceptions and grandfathers existing long-term contracts.

 

 

 

 

This material was prepared by BobVeres.com., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

Sources:

 

https://www.reuters.com/article/us-usa-trade-explainer/trumps-extraordinary-tariffs-idUSKBN1GH2IR

https://www.dallasnews.com/news/donald-trump-1/2018/03/01/trump-says-will-steel-aluminum-tariffs-despite-objections-industry-congressional-leaders

http://money.cnn.com/2018/03/02/news/economy/steel-industry-statistics-us-china-canada/index.html

https://www.cnbc.com/2018/03/02/if-trump-thinks-hes-taking-steel-tariff-war-to-china-hes-wrong.html

https://www.nytimes.com/2018/03/05/opinion/trump-tariff-americans-jobs.html

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Cybersecurity Alert: What You Need to Know about Tax Identity Theft

March 1, 2018  

As we enter tax season, it's important to be aware of the tax identity-theft scams targeting the public this year. Tax identity theft has been a massive threat for years. Recently, however, the IRS has made progress on catching fraudulent tax returns before money is paid out. Last year, the IRS stopped $4 billion in fraudulent tax returns. This year, it may be a different story.  

Experts worry that this tax season could bring more fraud than we’ve seen in recent years. The reason? The Equifax breach exposed 143 million consumer’s Social Security numbers and other personal data. That other personal data was just discovered by Congress to include tax identification numbers

The amount of personal data exposed makes it easy for tax identity thieves to file fraudulent tax returns in your name, collecting your tax refund check for themselves. The best way to protect yourself from this threat is to file your taxes as early as possible—before the thief has time to file in your name.  

If a tax return has already been filed with your information, the IRS will alert you. If you file your taxes online, you will be notified right away. If you send your documents in through the mail, you will receive notice via a mailed letter. If someone has filed in your name, be sure to alert the IRS of the fraud immediately by filling out Form 14039.  

But it’s important to be on the lookout for other tax scams as well. The IRS is already reporting on a multitude of scams this season. For example, in one scam a fraudulent tax return is filed in the victim’s name and the check is deposited in their account. The victim is then contacted by a thief posing as a debt collector who informs them that the deposit was a mistake and the funds must be paid back immediately.  

Scammers claim to be calling from a company called DebtCredit and have created a realistic-looking website that they direct victims to visit. The website includes a video that explains the frequency of mistake payments from the IRS and references personal information of the victim such as Social Security number and bank routing information. The webpage also shows details of the debt collector, including a photo, name, telephone number, and email address.  

This scam, in particular, is believed to have begun with phishing messages targeting tax preparers’ offices. Experts believe that malware was loaded onto tax preparers’ computers and was designed to steal information saved on the device.  

It’s important for tax preparers and individuals keep an eye out for scams over the next few months. Remember that the IRS will only contact you via mail about an issue. If you receive a call or an email and you are unsure, hang up and call the IRS directly to inquire.  

Emerging threat: Social Security benefits stolen by thieves

Security expert Brian Krebs reported on a new trend this month that involves a couple’s Social Security benefit being stolen by a hacker. The couple had created an account online with the Social Security administration but were delaying collecting their benefit. The wife then received written notice she had successfully signed up for benefits and that $11,000 would be transferred out of her SSA account. But she never requested this. It was later discovered that a thief had impersonated the woman by calling the SSA and signing up to receive her benefits. Creating an account at MySSA.gov is important, as it prevents others from opening an account in your name. However, as this story illustrates, you must continue to check your account regularly to protect your benefit. As always, stay alert!  

Sincerely, Kohlhepp Investment Advisors, Ltd.

Source: Savvy Cybersecurity, Horsesmouth  

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Perspective on This Week’s Market Events

 

February 9, 2018

 

It looks like the U.S. stock market will finally get something that happens, on average, about once a year: a 10+ percent drop—the definition of a market correction.  However, the last time a verydeep drop happened, it was a whopper—the Great Recession drop that caused U.S. stocks to drop more than 50%--so most people today probably think corrections are catastrophic.  They aren’t.  More typically, they last anywhere from 20 trading days (the 1997 correction, down 10.8%) to 104 days (the 2002-2003 correction, down 14.7%).  Corrections are unnerving, but they’re a healthy part of the economy—for a couple of reasons.

 

Reason #1: Because corrections happen so frequently and are so unnerving to the average investor, they “force” the stock market to be more generous than alternative investments.  People buy stocks at earnings multiples which are designed to generate average future returns considerably higher than, say, cash or municipal bonds—and investors require that “risk premium” (which is what economists call it) to get on that ride.  If you’re going to take more risk, you should expect at least the opportunity to get considerably more reward.

 

Reason #2: The stock market roller coaster is too unsettling for some investors, who sell when they experience a market lurch.  This gives long-term investors a valuable—and frequent—opportunity to buy stocks on sale.  That, in turn, lowers the average cost of the stocks in your portfolio, which can be a boost to your long-term returns.

 

The current market downturn relates directly to the first reason, where you can see that bonds and stocks are always competing with each other.  This week’s 4.1% decline in the S&P 500 coincided with an equally-remarkable rise in the yields on U.S. Treasury bonds.  Treasuries with a 10-year maturity are now providing yields of 2.85%--hardly generous, but well above the record lows that investors were getting just 18 months ago.  People who believe they can get a decent, relatively risk-free return from bond investments are tempted to abandon the bumpy ride provided by stocks for a smoother course that involves clipping coupons.  Bond rates go up and the very delicate supply/demand balance shifts, at least temporarily, in their direction, and you have the recipe for a stock market correction.

 

This provides us all with the opportunity to do an interesting exercise.  It’s possible that the markets will drop further—perhaps even, as we saw during the Great Recession, much further.  Or, as is more often the case, they may rebound after giving us a correction that stops short of a 20% downturn.  The rebound could happen as early as Monday, or some weeks or months from now as the correction plays out.

 

Once it’s over, no matter how long or hard the fall, you will hear people say that they predicted the extent of the drop.  So now is a good time to ask yourself: do I know what’s going to happen tomorrow?  Or next week?  Or next month?  Is this a good time to buy or sell?  Does anybody seem to have a handle on what’s going to happen in the future?

 

Record your prediction, and any predictions you happen to run across, and pull them out a month or two from now.

 

Chances are, you’re like the rest of us.  Whatever happens will come as a surprise, and then look blindingly obvious in hindsight.  All we know is what has happened in the past.  This week’s market drop is nothing more than a data point on a chart that doesn’t, alas, extend into the future.

 

Sincerely,

 

Edward J. Kohlhepp, Jr., CFP®, MBA President 

 

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO

 

 

 

This material was prepared by BobVeres.com., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

Sources:

 

https://www.fool.com/knowledge-center/6-things-you-should-know-about-a-stock-market-corr.aspx

 

https://www.yardeni.com/pub/sp500corrbear.pdf

 

https://finance.yahoo.com/news/stocks-getting-smashed-143950261.html

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Should we be alarmed?

 

 

 

February 5, 2018

 

Suppose somebody came up to you and shouted: “I have terrible news about the economy.  I think you should sell your stocks!”

 

Alarmed, you say: “Oh, my God.  Tell me more!”

 

And this mysterious stranger shouts: “Run for the hills!  The American economy just added 200,000 more jobs—more than expectations—and the U.S. jobless rate now stands at 4.1%, the lowest since 2000!”

 

You blink your eyes.  So?

 

“There’s more,” you’re told.  “The average hourly earnings of American workers have risen a more-than-expected 2.9% over a year earlier, the most since June of 2009!  You should sell your stocks while you can!”

 

Chances are, you don’t find this alarmist stranger’s argument very persuasive, but then again, you don’t work on Wall Street.  After hearing these benign government statistics, traders rushed for the exits from the opening bell to the closing, and today the S&P 500 stocks are, in aggregate, worth 2.13% less than they were yesterday.  The Nasdaq Composite index fell 1.96% and the Dow Jones Industrial Average, a somewhat meaningless but well-known index, was down 2.54%.

 

To understand why, you need to follow some tortuous logic.  According to the alarmist view, those extra 200,000 jobs might have pushed America one step closer to “maximum employment”—the very hard-to-define point where companies have trouble filling job openings, and therefore have to start offering higher wages.  No, that’s not a terrible thing for most of us, but the idea is that if companies have to start paying more, then they’ll be able to put less in their pockets—and the rise in the hourly earnings of American workers totally confirmed the theory.

 

If you’re an alarmist, it gets worse.  If American workers are getting paid more, then

companies will start charging more for whatever they produce or do, which might raise the inflation rate.  “Might” is the operative word here.  There hasn’t been any sign of higher inflation, which is still not as high as the Federal Reserve Board wants it to be.  But if you’re a Wall Street trader who thinks the market is in a bubble phase, you aren’t necessarily looking at facts to confirm your beliefs.

 

Suppose you’re not an alarmist.  Then you might notice that 18 states began the new year with higher minimum wages, which might have nudged up that hourly earnings figure that looked so alarming a second ago.  And some companies have recently announced bonuses following the huge reduction in U.S. corporate tax rates, whose amortized amounts are also finding their way into wage statistics.

Meanwhile, those same government statistics are showing a resurgence in factory activity and a rebound in housing, which account together for more than 50,000 of those new jobs.

 

So the question we all have to ask ourselves is: are we alarmists?  Selling in anticipation of a bear market has never been a great strategy, even though stocks are admittedly still priced higher than they have been historically.

 

If you are not an alarmist, then you have something to celebrate.  The S&P 500 has now officially ended its longest streak without a 3% drop in its history.  It’s an historic run not likely to be seen by any of us again.  The truth about the markets is that short, sharp pullbacks are inevitable and routine—unless you were living in the past year and a half, when we seemed to be immune from normal market behavior.

 

Sincerely,

 

Edward J. Kohlhepp, Jr., CFP®, MBA
President 

 

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO

 

 

 

This material was prepared by BobVeres.com., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

Sources:

https://www.bloomberg.com/news/articles/2018-02-02/u-s-added-200-000-jobs-in-january-wages-rise-most-since-2009

https://www.bloomberg.com/news/articles/2018-02-01/asia-stocks-to-slide-as-tech-stumbles-bonds-drop-markets-wrap?https://www.theatlantic.com/business/archive/2018/02/market-dow-drop/552254/?utm_source=atltw


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Everyone Is Talking About Bitcoin

 

January 5, 2018

 

Investors are excited about bitcoin – perhaps too excited. Their fervor is easy to understand.On December 18, bitcoin closed at $17,566. Back on September 22, bitcoin was valued at only $3,603.1    

 

Yes, you read that correctly – the price of bitcoin jumped nearly 500% in three months. Thanks to this phenomenon, investors everywhere are asking if they should buy bitcoin or invest portions of their retirement funds in the cybercurrency. The air is filled with hype: bitcoin is “unstoppable,” it is “the answer,” it is “the future.”  

 

It may also be heading for a crash.   

 

Bitcoin has crashed before.It is highly volatile. On Thanksgiving 2013, a single bitcoin was worth $979; by April 2014, the price was at $422. In late August 2017, it settled at $4,673; by mid-September, it was back at $3,783 immediately before its amazing fourth-quarter climb.1   

 

With the recent launch of bitcoin futures markets on the Chicago Board Options Exchange (CBOE) and CME Group, bitcoin has gained more respect. Still, there are many investors who will not touch it because of its considerable downside risk and its association with the seedy side of global finance.2   

 

The free market determines the value of bitcoin. Therefore, it can suffer sudden, dramatic devaluations due to the day’s headlines. When China ordered bitcoin exchanges to shutter, the price of bitcoin slid. When JPMorgan Chase CEO Jamie Dimon called bitcoin “a fraud” in September 2017, the price quickly fell 10%. When the Silk Road website disappeared, bitcoin’s value took a hit (and its disappearance brings us to the cryptocurrency’s other worrisome aspect).3,4 

 

Bitcoin has long been linked to the “dark web.” Even its origins are mysterious: the digital currency was created by someone named “Satoshi Nakamoto,” whose identity is still a question mark. Bitcoins are made in cyberspace by computers, beyond the control of any government.To its advocates, the fact that bitcoin has emerged from the Internet rather than a central bank is attractive. Who bitcoin and other cybercurrencies have attracted is another matter.4,5    

 

Bitcoin transactions are conducted on multiple exchanges and verified through the blockchain, a digital ledger that leaves transaction records open to the broad community of bitcoin users rather than a financial regulatory authority.3,4  

 

Is this transparency a plus or a minus? You will hear both arguments. Even with this openness, users on bitcoin exchanges are not always required to reveal their identities, which is a plus for criminals. Bitcoin has been linked to money laundering, and earlier in this decade, some economists saw it as little more than a currency for drug lords. Silk Road, a black-market website, saw plenty of bitcoin transactions. How about funding for terrorist cells? Recently, a New York woman was charged with trying to send more than $80,000 to ISIS – cash mostly laundered through bitcoin, federal prosecutors assert.5,6   

 

The hype says that bitcoin is the “new gold,” but gold has intrinsic value. Governments, banks, and institutional investors share a foundational belief that gold is a valuable commodity. Does bitcoin have such a foundational belief beneath it?  

 

If speculators stopped believing bitcoin was valuable, then how valuable would it be? Nearly worthless, in the eyes of some observers. As NerdWallet investment writer Andrea Coombes remarks, “The value is in the demand itself.”7 

 

In the financial markets, higher prices are not always succeeded by higher prices.This is essentially the belief holding up bitcoin. Its biggest fans believe its direction will be up and up for years to come, and that it will never really crater again. This is called irrational exuberance, and it has harmed many investors through the years. 

 

Whether you think bitcoin is the “new gold” or amounts to a bubble ready to burst, its extreme, dangerous volatility means one thing – if you do choose to invest in it, you would be wise to only invest money that you can afford to lose.

 

Sincerely, 

Edward J. Kohlhepp, Jr., CFP®, MBA
President  

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO 

 

   

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

Citations.

1 - coindesk.com/price/ [12/20/17]

2 - cnbc.com/2017/12/17/worlds-largest-futures-exchange-set-to-launch-bitcoin-futures-sunday-night.html [12/17/17]

3 - thebalance.com/who-sets-bitcoin-s-price-391278 [2/14/17]

4 - theguardian.com/technology/2017/sep/13/from-silk-road-to-atms-the-history-of-bitcoin [9/14/17]

5 - theguardian.com/business/2013/mar/04/bitcoin-currency-of-vice [3/4/13]

6 - arstechnica.com/tech-policy/2017/12/feds-charge-new-york-woman-with-sending-bitcoins-to-support-isis/ [12/15/17]

7 - nerdwallet.com/blog/investing/is-bitcoin-safe/ [12/7/17]

 


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What the Tax Bill Means to You

 

December 18, 2017

 

The new tax law hasn’t been formally ratified by the U.S. House and Senate, but all indications are that the Tax Cuts and Jobs Act of 2017 will be sent to the President’s desk in the next few days.  As you probably know, the House and Senate versions were somewhat different.  What does the new bill look like? 

Despite the promise of tax “reform” or “simplification,” the bill actually adds hundreds of pages to our tax laws.  And the initial idea of reducing the number of tax brackets was apparently tossed aside in the final version; the new bill maintains seven different tax rates: 10%, 12%, 22%, 24%, 32%, 35% and 37%.  Most people will see their bracket go down by one to four percentage points, with the higher reductions going to people with higher income.  And the tax brackets, going forward, will be indexed to inflation, meaning that the “real” income brackets will remain approximately the same from year to year. 

The new brackets break down like this: 

Individual Taxpayers 

Income $0-$9,525 - 10% of taxable income

$9,526-$38,700 - $952.50 + 12% of the amount over $9,526

$38,701-$82,500 - $4,453 + 22% of the amount over $38,700

$82,501-$157,500 - $14,089.50 + 24% of the amount over $82,500

$157, 501-$200,000 - $32,089.50 + 32% of the amount over $157,500

$200,001-$500,000 - 45,689.50 + 35% of the amount over $200,000

$500,001+ - $150,689.50 + 37% of the amount over $500,000

 

Joint Return Taxpayers 

Income $0-$19,050 - 10% of taxable income

$19,051-$77,400 - $1,905 + 12% of the amount over $19,050

$77,401-$165,000 - $8,907 + 22% of the amount over $77,400

$165,001-$315,000 - $28,179 + 24% of the amount over $165,000

$315,001-$400,000 - $64,179 + 32% of the amount over $315,000

$400,001-$600,000 - $91,379 + 35% of the amount over $400,000

$600,000+ - $161,379 + 37% of the amount over $600,000

 

Taxes for trusts and estates were also changed to: 

$0-$2,550 - 10% of taxable income

$2,551-$9,150 - $255 + 24% of the amount over $2,550

$9,151-$12,500 - $1,839 + 35% of the amount over $9,150

$12,501+ - $3,011.50 + 37% of the amount over $12,500

 

Notice that in the lower brackets, the joint return (mostly for married couples) were double the individual bracket thresholds, eliminating the so-called “marriage penalty.”  However in the higher brackets, the 35% rate extends to individuals up to $500,000, but married couples with $600,000 in income fall into that bracket.  In the top bracket, the marriage penalty is more significant; individuals fall into it at $500,000, while couples are paying at a 37% rate at $600,000 of adjusted gross income. 

Other provisions: the standard deduction is basically doubled, to $12,000 (single) or $24,000 (joint), $18,000 (head of household), and in an interesting provision, persons who are over 65, blind or disabled can add $1,300 to their standard deduction. 

The bill calls for no personal exemptions for 2018.  And the Pease limitation, a gradual phaseout of itemized deductions as taxpayers reached higher income brackets, has been eliminated. 

Despite the hopes of many taxpayers, the dreaded alternative minimum tax (AMT), remains in the bill.  The individual exemption amount is $70,300; for joint filers it’s $109,400.  But for the first time, the AMT exemption amounts will be indexed to inflation. 

Interestingly, the new tax bill retains the old capital gains tax brackets—based on the prior brackets.  The 0% capital gains rate will be in place for individuals with $38,600 or less in income ($77,200 for joint filers), and the 15% rate will apply to individuals earning between $38,600 and $452,400 (between $77,400 and $479,000 for joint filers).  Above those amounts, capital gains and qualified dividends will be taxed at a 20% rate. 

In addition, the rules governing Roth conversion recharacterizations will be repealed.  Under the old law, if a person converted from a traditional IRA to a Roth IRA, and the account lost value over the next year and a half, they could simply undo (recharacterize) the transaction, no harm no foul.  Under the new rules, recharacterization would no longer be allowed. 

For many taxpayers who itemize deductions, the adjusted gross income number will be higher under the new tax plan, because many itemized deductions have been reduced or eliminated.  Among them: there will be a $10,000 limit on how much any individual can deduct for state and local income tax and property tax payments.  Before you rush to write a check to the state or your local government, know that a provision in the bill states that any 2018 state income taxes paid by the end of 2017 are not deductible in 2017, and instead will be treated as having been paid at the end of calendar year 2018. 

The mortgage deduction will be limited to $750,000 of principal (down from a current $1 million limit); any mortgage payments on amounts above that limit will not be deductible.  However, the charitable contribution deduction limit will rise from 50% of a person’s adjusted gross income to 60% under the new bill. 

What about estate taxes?  The bill doubles the estate tax exemption from, currently, $5.6 million (projected 2018) to $11.2 million; $22.4 million for couples.  Meanwhile, Congress maintained the step-up in basis, which means that people who inherit low-basis stock will see the embedded capital gains go away upon receipt. 

Public “C” Corporations saw their highest marginal tax rate drop from 35% to 21%, the largest one-time rate cut in U.S. history for the nation’s largest companies. 

And pass-through entities like partnerships, S corporations, limited liability companies and sole proprietorships will receive a 20% deduction on taxes for “qualified business income,” which explicitly does NOT include wages or investment income. 

As things stand today, all of these provisions are due to “sunset” after the year 2025, at which point the entire tax regime will revert to what we have now. 

 

 

Sources: 

https://www.washingtonpost.com/news/wonk/wp/2017/12/15/the-final-gop-tax-bill-is-complete-heres-what-is-in-it/?utm_term=.4b0efca718e8 

https://www.forbes.com/sites/kellyphillipserb/2017/12/17/what-the-2018-tax-brackets-standard-deduction-amounts-and-more-look-like-under-tax-reform/#42b575bf1401 

https://www.kitces.com/blog/final-gop-tax-plan-summary-tcja-2017-individual-tax-brackets-pass-through-strategies/

https://www.bna.com/2017-Individual-Tax/

https://www.nytimes.com/interactive/2017/12/15/us/politics/final-republican-tax-bill-cuts.html

This material was prepared by BobVeres.com., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 


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Senate Tax Bill

Senate Tax Bill

 

December 5, 2017

 

The U.S. House of Representatives passed its proposed tax “reform” bill last month, and now the Senate has followed suit.  Interestingly, the two bills are different enough that the two sides are going to have to meet and hammer out a compromise.

Here’s a quick glance at the provisions in the Senate bill and some of the differences.

First, the Congressional Budget Office created a quick report that assesses a variety of income levels, and whether they’ll come out ahead, tax-wise (blue and white cells) or will lose ground financially (pink cells) under the proposed bill.  (See graphic). 

 

Under the Senate bill, there would be seven tax brackets (compared with four in the House version): 10%, 12%, 22%, 24%, 32%, 35% and 38.5%.  The threshold to reach the top rate would be raised from $418,000 (single) or $480,000 (joint) to $500,000/$1 million.

The Senate bill raises the standard deduction to $12,000 for singles and $24,000 for joint filers, compared with $12,200 and $24,400 in the House version.  The Senators decided to keep the mortgage interest deduction as it is today, rather than (House version) limit the amount of mortgage debt upon which interest can be deducted to $500,000.

Meanwhile, the House repealed the alternative minimum tax, but the Senate decided to keep it, although it did propose to raise the income exemption levels from $50,600 (single) or $78,750 (joint) to $70,600 and $109,400 respectively.  Both versions would raise the estate tax exemption to $11 million for individuals and $22 million for joint filers, but the House version would repeal the estate tax altogether in 2024, while the Senate version would not.

Like the House, the Senate bill would eliminate many popular deductions, including state and local income taxes, casualty losses and unreimbursed employee expenses. 

It is possible that the final version will greatly reward taxpayers who own and receive income through so-called “pass-through entities;” that is, corporate arrangements where the taxes are calculated and paid by the owners rather than at the corporate level.  This includes partnerships, Subchapter S corporations and limited liability companies, which would, under the Senate bill, be taxed at a rate of about 29.6% rather than the top rate, whatever that turns out to be.

Interestingly, this lower rate is also extended to publicly-traded pass-through vehicles—which suggests that you might see a lot of new tax-advantaged investment products come on the market if the bill is passed.

Speaking of publicly-traded entities, companies with significant earnings outside the U.S. will also receive a generous tax break; they would, under the Senate bill, be able to bring their earnings home at tax rates ranging from 7.5% to 14.5%—lower than the proposed new 20% corporate tax rate. 

The consolidated bill is expected to be signed before the end of the year—and of course the professional community is watching closely to calculate the impact on all of us.

Sincerely,

Edward J. Kohlhepp, Jr., CFP®, MBA
President 

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO

 

 

This material was prepared by BobVeres.com., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

Sources:

 

http://money.cnn.com/2017/12/03/pf/taxes/senate-house-tax-bills-individuals/index.html

 

https://www.nytimes.com/2017/12/02/business/tax-bill-offers-last-minute-breaks-for-developers-banks-and-oil-industry.html

https://www.forbes.com/sites/anthonynitti/2017/12/02/winners-and-losers-of-the-senate-tax-bill/#79382054254d

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The Republican Tax Reform Plan

 

November 10, 2017

 

 

Major changes may be ahead for federal tax law. At the start of November, House Republicans rolled out their plan for sweeping tax reforms. Negotiations may greatly alter the content of the bill, but here are the proposed adjustments, and who may and may not benefit from them if they become law.

   

The corporate tax rate would fall from 35% to 20%.Wall Street would cheer this development, perhaps with a significant rally. Sole proprietorships, partnerships, and S corporations would also see their top tax rate drop to 25% (although W-2 wages for business owners who invest in these pass-through entities would still be taxed at the owner’s marginal tax rate).1,2

 

The estate tax and Alternative Minimum Tax would be eliminated.The AMT would die immediately, saving more than 5 million high-earning taxpayers from an annual bother. Death taxes would sunset within six years, and in the interim, the estate tax exemption would be doubled, leaving the individual exemption at about $11 million. This would be a boon for many highly successful people and their heirs.2

 

Personal exemptions would go away, but the standard deduction would nearly double.The loss of the personal income tax exemption (currently $4,050 per individual claimed) would be countered by standard deductions of $12,000 for individuals and $24,000 for married couples. This could lessen the tax burden for many middle-class households. On the downside, the larger standard deduction might reduce the incentive to donate to charity.1,2

 

Only four income tax brackets would exist.While the top marginal tax rate would remain at 39.6%, the other brackets would be set at 12%, 25%, and 35%. Individuals earning $45,000 or less and spouses with combined earnings of $90,000 or less would fall into the 12% bracket. Households earning less than $260,000 would be in the 25% bracket. The individual threshold for the 39.6% bracket would be moved up to $501,000 from the current $418,401; it would apply to couples who earn more than $1 million.3

  

Some state and local tax deductions might vanish.Taxpayers who face higher state income tax rates – such as those living in New York, California, and New Jersey – could lose a big tax break here. The reform bill’s author, House Ways & Means Committee Chair Kevin Brady (R-TX), says that a new revision to the bill would at least let homeowners deduct state and local property taxes up to a $10,000 cap.3

  

Speaking of caps, the mortgage interest deduction would be halved to $500,000. Real estate investors, developers, and agents are unhappy with this idea, as the current $1 million mortgage interest deduction has helped to spur home buying.1

 

Some key itemized credits and deductions would disappear.Among those the bill would do away with: the medical expense deduction, the moving deduction, the student loan interest deduction, the deduction on alimony payments, the electric vehicle deduction, and the tax credit drug manufacturers rely on as they undertake clinical trials. Retirees, divorcees, college grads, and pharmaceutical companies could see some financial negatives.1,2

 

Private college endowments would be taxed.With the aim of generating $3 billion in revenue over the next ten years, the bill would impose a 1.4% federal excise tax on private colleges and universities with 500 or more students and assets equivalent to or greater than $100,000 per full-time student.1

 

The Child Tax Credit would grow.Families eligible to claim the credit would see it rise to $1,600 from the current $1,000.3

 

Hardship withdrawals from workplace retirement plans could become larger.Currently, plan participants who take hardship withdrawals are only allowed to withdraw their contributions, not both their contributions and earnings. The new reform bill would lift that restriction. In addition, a worker with an outstanding loan from a workplace retirement plan who loses his or her job would have until April 15 of the following year to repay the loan balance, as opposed to the current 60 days.4

 

 Sincerely,

Edward J. Kohlhepp, Jr., CFP®, MBA
President 

 

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO

    

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.   

     

Citations.

1 - nytimes.com/2017/11/02/us/politics/republican-tax-plan-winners-losers.html [11/2/17]

2 - kiplinger.com/article/taxes/T055-C032-S014-3-game-changers-for-investors-in-house-tax-plan.html [11/3/17]

3 - businessinsider.com/trump-gop-tax-reform-plan-bill-text-details-rate-2017-10 [11/2/17]

4 - chicagotribune.com/business/ct-biz-gop-tax-bill-401k-changes-20171103-story.html [11/3/17]

 

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A Look at Jerome Powell

 

November, 2017

 

On November 2, Jerome “Jay” Powell was nominated to lead the Federal Reserve. The announcement in the White House’s Rose Garden was not a surprise; in recent days, he had emerged as the front-runner for the chairmanship.1

 

Three things stand out about Jay Powell’s nomination, and the change of leadership presumably ahead at the Fed in 2018.1

 

The choice of Powell does much to affirm the status quo. In fact, Powell has sided with the majority in every Fed policy vote since he became a Fed governor in 2012. Former White House budget director David Stockman calls him “Janet Yellen with a tie.”1,2

 

Analysts widely expect Powell to try to maintain the accommodative stance of his predecessor, along with the Fed’s current strategy for normalizing monetary policy. He has shown an interest in scaling back some of the banking regulation put in place by the Dodd-Frank Act, such as the prohibition on proprietary trading by commercial banks.1,3

   

Interestingly, Powell does not have a Ph.D. in economics. He is not an economist by profession, but rather a lawyer who became an investment banker and Fed governor. This may turn out to be more of a curiosity than a detriment; after all, the last Fed chair without a doctorate in economics was a fellow named Paul Volcker.3,4

  

For the first time in almost 40 years, a sitting Fed chair will not be reappointed.Presidents have commonly retained Federal Reserve chairs appointed by the previous commander-in-chief; if Powell takes the helm of the Fed, that pattern will end. Janet Yellen does have the option to stay on as a Fed governor and voting member of the Federal Reserve Board through 2024, though exercising that option would be atypical. Assuming his nomination is approved, Powell will succeed Yellen as Fed chair in February.3,4

Sincerely,

Edward J. Kohlhepp, Jr., CFP®, MBA
President 

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO

 

 

    

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.   

     

Citations.

1 - nytimes.com/2017/11/02/opinion/jerome-powell-trump-federal-reserve.html [11/2/17]

2 - foxbusiness.com/politics/2017/11/01/fed-pick-jerome-powell-is-janet-yellen-with-tie-fmr-reagan-budget-director.html [11/1/17]

3 - thestreet.com/story/14364543/1/powell-seen-as-safe-uncontroversial-choice-to-replace-yellen.html [11/1/17]

4 - tinyurl.com/y8kammc9 [11/2/17]

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KRACK Wi-Fi Vulnerability: What You Can Do Now

October 20, 2017

 

A new, serious Wi-Fi vulnerability that affects nearly all wireless networks was announced by security researchers this week. The attack, being called KRACK, allows hackers to perform wireless network identity theft via a flaw in WPA2 Wi-Fi settings.

 

The KRACK vulnerability allows wireless networks to be duplicated giving hackers an unencrypted view of anything flowing between your device and the network. For example, if you log in to your email while your network is affected the hacker will be able to see your username and password as well as anything you send while connected.

 

WPA2, or Wi-Fi Protected Access II, is considered the most secure setting for wireless routers—meaning the majority of networks currently have this setting in place and are at risk.

 

The good news is that in order to hack your network, attackers would need to be in physical range of your Wi-Fi network. In addition, sites that are protected with Secure Sockets Layer (SSL) encryption can’t be intercepted by hackers. You can determine if a site is protected if the URL in your browser begins with HTTPS://. (Keep in mind, however, that often these security certificates are not configured correctly and many may not actually be secure.)

 

So far there have been no reported exploits of this flaw, although experts say that businesses are more likely to be targeted than consumers. Here are some things you can do to protect your network from this attack:

 

1. Update your devices

Microsoft Windows released a patch for KRACK and you should update any Windows devices immediately. While this patch will not fix your router (those vendors will release separate patches when they are ready), it will protect your wireless Windows device from being exploited itself. You can download the appropriate patch for your Windows device here.

 

Apple has released a patch for iOS in the latest beta version of iOS 11.1. You can download the beta version online but it is not finalized yet and you may experience some issues. The finalized patch will likely be released to the general public and auto-pushed to your devices within the next few weeks.

 

Google will release a patch for the KRACK vulnerability on November 6th. It could, however, take months for each Android manufacturer to release the patch for its devices.

 

2. Turn off your Wi-Fi (if you can)

If you currently use a wireless connection in your office, we recommend turning it off and sticking to a wired Internet connection until router patches are released. With your Wi-Fi enabled, a hacker could possibly sit in your parking lot and dupe your network to intercept and download data shared on your network—including client information.

 

If you have the option to use a wired connection at home instead of wireless, we make the same recommendation. Keep track of any patches that become available for your home devices in the next 30 days as well. TVs, home routers, even some refrigerators are connected to Wi-Fi and will require a patch to secure themselves again.  

 

In addition, avoid free Wi-Fi hotspots such as coffee houses and airports for at least the next 30 days. This is a best practice anyway, as free wifi hotspots are always more vulnerable than a secure, private connection.


3. Check your router manufacturer for updates

Most router manufacturers are currently working on KRACK patches for its models. Charged blog is currently keeping a list of firmware patch status for most routers and devices. You should also check your manufacturer’s website for updates.

 

Once a patch is released for your router, you will have to update the firmware. This can be a complex process so you may want to ask your IT specialist (or internet provider) for help. You can also refer to these instructions for help.

 

Newer routers come with apps that make updating your router firmware less difficult. You may consider upgrading to one of these new routers in the near future.

Once your router is updated, you can turn your Wi-Fi network back on.


4. Stay tuned 

The KRACK vulnerability is a developing story and more news is likely to come out in the following days. We will continue to update you as more information is known.


Sincerely,

Edward J. Kohlhepp, Jr., CFP®, MBA

President  
 

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO 
 

 

Source: Horsesmouth Savvy Cybersecurity
 

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Equifax Hack: Facts, Myths & Protection

September 26, 2017

 

NOTE: THIS NEWSLETTER IS LONG, BUT HAS EXTREMELY IMPORTANT INFORMATION REGARDING EDUCATING AND PROTECTING YOURSELF AGAINST IDENTITY THEFT.

Equifax hack: Facts and myths

Following this month’s Equifax breach affecting 143 million people, rumors began swirling around the details of the hack. It’s not only important to take action and freeze your credit at the credit reporting bureaus, but also to understand, amid all the media squall, what’s true and what’s false concerning this event.

Let’s examine some of the “rumors” swirling about the Equifax hack.
 

If you sign up for Equifax’s credit monitoring system you waive your right to sue

MYTH(now): When the hack was first announced, Equifax included some confusing fine print in the details of their credit monitoring system, TrustedID. The statement implied that consumers who opted into the free credit monitoring offered by Equifax were giving up any right to sue the company on their own or as part of a class action lawsuit.

At the time we first reported details of the breach, we too were under the impression that opting in to TrustedID gave you limited legal action. Since then, Equifax clarified the language and those enrolled in TrustedID still have legal rights. However, as we have previously explained, credit monitoring does not protect you from identity theft. Freezing your credit is the best option.
 

Outdated software used by Equifax caused the breach

FACT: Experts are now reporting that hackers were able to infiltrate Equifax’s system through a flaw in Apache Struts software. In March of 2017, Apache discovered a vulnerability in the program and released a patch the same day.

Hackers first gained access to Equifax’s network in May, meaning that the company left the software unpatched for at least two months. At this point, Equifax has not made a statement on why the software was left outdated.

Take a lesson from Equifax and be sure to always update your software. Outdated software leaves you vulnerable to hacks and puts your security at risk. It’s best to update your software as soon as you are notified—better yet, set up auto-updates so you don’t have to worry about it.
 

Signing up for Equifax’s credit monitoring will keep my identity safe

MYTH: Credit monitoring is not a comprehensive identity theft prevention method. These programs alert you after credit has been taken out in your name. If the credit wasn’t taken out by you—there’s still a mess to clean up.

Instead you should sign up for a credit/security freeze. This action locks down your credit file with PINs that only you know. No new credit can be issued unless the freeze is lifted at the bureaus.

You can learn more about the details of setting up a security freeze here.
 

Over 200,000 credit cards were stolen in the hack

FACT: In addition to the 143 million personal records, hackers were also able to download credit card data of 200,000 people. The data included credit card numbers, names, and expiration dates of consumers who had provided their credit card info to Equifax between November 2016 and July 2017.

Be sure to monitor your credit card statements for any strange charges. For the ultimate protection, sign up for automatic text or email alerts on your credit and bank cards. Doing so will set off a text or email message anytime a charge is made on your account.

The details on the Equifax hack are still developing, and we will likely learn more details in the coming months. Again, for now, be sure to protect yourself from this breach and future breaches with a security freeze.

Be sure to keep an eye out for potential scams following this hack. Phishing emails may be on the rise as hackers take advantage of people’s fears surrounding this news.


What Can I Do To Protect Myself Against Identity Theft?

Following is a reminder of the different steps you can take to protect yourself against identity theft. Remember, there is no guarantee! A credit freeze will not protect you against identity theft 100%.  But a credit freeze along with the following steps will make you a less ideal target and give you added layers or protection. This list is long – it is not meant to overwhelm you but to inform and educate you. 
 

1. Credit Freeze: A freeze blocks anyone from accessing your credit reports without your permission—including you. This can usually be done online, and each bureau will provide a unique personal identification number that you can use to “thaw” your credit file in the event that you need to apply for new lines of credit sometime in the future. Another advantage: each credit inquiry from a creditor has the potential to lower your credit score, so a freeze helps to protect your score from scammers who file inquiries. 

See our previous newsletter regarding details on placing a credit freeze at each of the major credit bureaus.

Placing the credit freezes can be burdensome, and it can be more involved (difficult) for some. You can place a credit freeze on your file online, by phone, or via mail. But we do believe this is a critical step in protecting yourself.

Remember that each person in your household has an individual credit file and a credit freeze needs to be put in place per person (or social security number). Placing a credit freeze on a husband, does NOT include his wife, even if all of their accounts are held jointly. 

Don’t forget about your kids, especially minors! Minor children can be easy targets because their credit file is not typically monitored. It can be years before identity theft is discovered for a child and then the damage has been done. At this time, it appears that the only way a credit freeze can be placed on a minor’s file, is to MAIL in the request with the required documentation. Check out this article regarding Child Identity Theft.

Finally, yes, there is a 4th credit bureau, Innovis. Unlike the big three credit reporting agencies (Equifax, Experian, and TransUnion), Innovis does not sell credit reports. For that reason, it is not always mentioned when discussing a credit freeze. Some argue that it is not totally necessary to set up a credit freeze at Innovis. We want you to do the smart and prudent thing without becoming overwhelmed, so do what you feel is best.

 

2. Monitor Your Credit Report: Under federal law you’re allowed to request a free copy of your credit report once a year from each of the three credit reporting agencies: Equifax, Experian, and TransUnion—at www.annualcreditreport.com. By rotating among the agencies, you can spread this out over the year to consistently monitor your credit (request a report from a different agency every 122 days). Look for suspicious accounts or activity that you don’t recognize—such as someone trying to open a new credit card or apply for a loan in your name. If you DO see something, visit http://www.Identitytheft.gov/databreach to find out how to mitigate the damage.
 

3. Two-Factor Authentication: Many sites now offer two-factor authentication when logging into accounts. For example, when logging into a site with two-factor authentication enabled, a code will be sent to your phone that you must enter after your password to gain full access. In order to log in, you must have your password and a special code that is changed every time. If a hacker successfully guesses your password but does not have your phone, they cannot get into your account. Currently, sites such as Gmail, Facebook, Dropbox, Twitter, and more offer this service. Many banks and credit card companies offer this service for online use as well.
 

4. Set Text or Email Alerts for Bank Accounts and Credit Cards: What if you could know exactly when money was leaving your accounts like the banks and credit card companies do? You could catch fraud as it is happening and limit your losses.

You can do this, actually. The majority of major banks and credit cards allow you to sign up for text or email alerts that are sent to you anytime money leaves your account or a charge is pushed through. If you receive an alert for a purchase or withdrawal that you did not make, you know right away to contact your financial institution and alert them of the fraud.

Often, you determine the dollar amount that triggers an alert. For example, you can choose to get notified only for charges that exceed $200. It’s best, however, to set that dollar amount as low as possible. Thieves commonly test accounts with small purchases and the sooner you catch them, the less damage they can do.

To enable these instant alerts on your account, log in or create an online account at your bank and credit card companies. If you have trouble finding the alert settings on your account, contact your institution’s customer service for assistance.


5. Monitor your existing credit card and bank accounts closely: A credit report won’t tell you if there’s been money stolen from a bank account or suspicious activity on your existing credit card. Unfortunately, you’ll have to turn this into a habit. In most cases, theft happens over time, starting with small amounts stolen from across your accounts.


6. Create a Secret Email Address for Your Financial Accounts: Our personal email addresses have become a key to our lives on the Internet. We enter them into countless databases when we sign up for newsletters, create new accounts, and order items online. We don’t think twice about giving out our email address.

But if we use that same email address for our online banking and credit card accounts, we’re putting our finances in danger. If one of those various databases is hacked we’re essentially handing half of our financial account credentials over to the hackers.

Make the hackers’ job harder by creating a “financial-only” email address that you use just for your online financial accounts. This secret email should not reveal anything about you. Make your username (the part before the @ sign) something generic that does not reference your name, initials, or other identifying information. Of course, create a strong password and use two-step verification on your account.


7. Credit Monitoring Service: Many Americans have opted to sign up for a credit monitoring service, which won’t prevent fraud from happening, but WILL alert you when your personal information is being used or requested. In most cases, there is a cost involved, but Equifax is offering a free year of credit monitoring through its TrustedID Premier business, regardless of whether you’ve been affected by the hack. It includes identity theft insurance, and it will also scan the Internet for use of your Social Security number—assuming you trust Equifax with this information after the breach.


8. Opt Out of Pre-approved Credit Offers: ID thieves like to intercept offers of new credit sent via postal mail. If you don’t want to receive pre-screened offers of credit and insurance, you have two choices: You can opt out of receiving them for five years by calling toll-free 1-888-5-OPT-OUT (1-888-567-8688) or visiting www.optoutprescreen.com.

Or you can opt out permanently online at www.optoutprescreen.com. To complete your request, you must return a signed Permanent Opt-Out Election form, which will be provided after you initiate your online request.


9. Fraud Alert: If you are a victim of identity theft or suspect you may be, you can put a fraud alert on your credit file, for free, by contacting one of the credit agencies, which is required to notify the other two. This will warn creditors that you may be an identity theft victim, and they should verify that anyone seeking credit in your name is really you. The fraud alert will last for 90 days and can be renewed.


10. File your taxes early: As soon as you have the tax information you need, file your return - before a scammer can. Tax identity theft happens when someone uses your Social Security number to get a tax refund or a job. Respond right away to letters from the IRS.


Do not make the mistake of thinking “It won’t happen to me” when it comes to Identity Theft! Widespread, significant hacks have been and will continue making news headlines. While you may not be able to ensure this will never happen to you, you do have the power to improve your protection – but YOU need to take action to do so!

Good luck!

 

 

Sincerely,

 

Edward J. Kohlhepp, Jr., CFP®, MBA

President  

 

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO

 

 

Sources: 

https://www.equifaxsecurity2017.com/potential-impact/

https://www.consumer.ftc.gov/blog/2017/09/equifax-data-breach-what-do?utm_source=slider

https://krebsonsecurity.com/2015/06/how-i-learned-to-stop-worrying-and-embrace-the-security-freeze/

http://money.cnn.com/2017/09/09/pf/what-to-do-equifax-hack/index.html

Identitytheft.gov/databreach

https://www.consumer.ftc.gov/blog/2017/09/equifax-data-breach-what-do

https://www.bloomberg.com/news/articles/2017-06-29/how-to-protect-your-child-from-identity-theft

Horsesmouth Savvy Cybersecurity

 
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Cybersecurity Alert: What You Need To Do Now In Response to the Equifax Breach

September 8, 2017
 
 
Credit agency Equifax announced yesterday that it suffered a data breach affecting 143 million U.S. consumers.
 
 
The hack exposed names, Social Security numbers, addresses, birth dates, and driver’s license numbers—all critical pieces of information used by identity thieves to impersonate people and conduct fraud.
 
 
This is probably the most consequential data breach in history, considering that nearly all U.S. adults have their credit histories on file with Equifax and the other two credit bureaus, Experian and Transunion.
 
 
While it’s true that for some time that the public’s personal information has been available for sale in the black market, no data breach as comprehensive as this one has ever occurred.
 
 
That’s why it’s critical for you to take significant steps to protect yourself now—steps that exceed the response Equifax is currently recommending.
 
 
Here’s what you need to do immediately to safeguard your information.
 
 
Freeze your credit
 
 
If you have not done so already, it is imperative that you freeze your credit immediately at each of the three credit bureaus. We have been recommending this course of action for years.
 
 
A security freeze, also called a credit freeze, locks your credit file at each bureau with a special PIN that only you know. That PIN must be used in order for anyone to access your credit file, or add new credit in your name.
 
 
(Note: As of now, Equifax does not believe that security PINs were accessed by hackers. If you had a security freeze in place at Equifax before the hack your PIN should still be protected. But that could change.)
 
 
Credit bureaus rarely emphasize freezing your credit file because it’s not in their best interest, or their clients—banks and other companies that grant credit. Instead, they recommend “credit monitoring,” a largely useless and ineffective service that charges you money to tell you when your open, or unfrozen, credit file has been accessed.
 
 
In essence, they tell you that you may have a credit breach problem AFTER the fact, which isn’t protection against identity theft.
 
 
A security freeze gives you complete control of your credit file. Unlike credit monitoring or fraud alerts, a security freeze stops an identity theft from happening rather than alerting you to potential fraud after it has happened.
 
 
Reminder: We also recommend freezing the credit files of your minor children! If a minor child's identity is stolen, it is often not discovered for years - not until they try to apply for credit of their own later in life!
 
 
How to do it
 
 
To set up a security freeze you must contact all three of the credit bureaus individually. This process can be done online or over the phone. You will be asked some questions to confirm your identity but it only takes a few minutes.
 
 
We recommend beginning with Experian and Transunion as Equifax’s website is currently receiving high traffic.
 
 
You can freeze your credit by using the following phone numbers and links:
 
Depending on your state, freezing your credit can cost anywhere from $0 to $10 at each bureau. Proven identity theft victims can have this fee waived. (If you need to lift the freeze you will have to pay the same fee.)
 
 
To lift your freeze you simply contact the bureau used by the lender and provide your PIN to lift the freeze for a certain period of time. This can be done online or over the phone. It may take a few days for the freeze to be lifted so be sure to do it a few days in advance.
 
 
Was I affected?
 
 
You can see if you were a victim of Equifax’s hack by visiting equifaxsecurity2017.com/potential-impact/ and entering your last name and last six digits of your Social Security number. You can also wait to receive a letter from Equifax.
 
 
Regardless, take this time to freeze your credit. Given the sheer volume of breaches in the past few years, it is likely your information has already been exposed. Freezing your credit will give you peace of mind and is a crucial step in protecting your identity from hackers.
 
 
Don’t wait! Take action now!
 
 


Source: Horsesmouth Savvy Cybersecurity
 
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Money Lessons from Hurricane Harvey

August 30, 2017

 

All of our hearts go out to the people in Texas dealing with the hurricane and the unprecedented tropical storm that has followed. Seeing the images on TV of the flooding, the rescues, and the people in shelters has had us thinking about what we all can learn from this.

 

Gratitude for what’s most important.  In everyday life it’s easy to focus on getting ahead, material accumulation, and the minutia and worries of daily life. Sadly, sometimes it takes a huge event to wake us up and bring our attention back to what is most important in life. It can be an illness, death of a loved one, or like Hurricane Harvey, a natural disaster. In the TV interviews we notice over and over that people will mention the loss, fear, and grief they are feeling, but also their gratitude for getting out safely and for the responders and volunteers who have helped.

 

Take a moment right now and think of three things you are most grateful for in your life. A focus on gratitude can move you from fear, sadness, and worry to allow you to be better able to actually help and support.

 

Prepare for the unexpected.  Don’t miss the message that those of us left physically unscathed by this disaster can learn from the people affected. Do you have the proper homeowners and auto insurance in place? Do you have a box with important documents you can grab if you needed to leave your home quickly or do you have this information securely stored on line where you could easily access? Have you built up your solutions fund (aka emergency fund) in case your income stops for a while?

 

Help where you can. It is so inspiring seeing ordinary citizens in their boats, kayaks, and Jet Ski’s recuing people. The stories of neighbors helping neighbors are so heartwarming. Actually watching other’s kind acts can inspire and motivate more good deeds. It can be difficult to watch a lot of news as it feels so bad – but this type of news is different. This is when humanity is at its best. If you aren’t helping directly with the flood victims in Texas, where can you lend a hand or do a kind deed?

 

Open your heart and your wallet.Don’t just feel badly about this disaster; listen to the pull you are feeling to help. Donate what you can. The need is expected to go on for a long time with so many people displaced from their homes. There are so many good organizations that are contributing to the relief effort in Texas. Find one that speaks to you.

 

The American Red Cross Hurricane Harvey disaster relief is a popular and impactful choice for donations. One of our partners, TD Ameritrade Institutional, is offering to match each donation made on its sitedoubling the impact of every dollar given.  Click here to donate with a match.

 

Sending love and light to all those affected by Harvey and the aftermath….

 

All of us Kohlhepp Investment Advisors, Ltd.

 

Source: Ellen Rogin, CPA, CFP®

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Don't Sell on Headlines

August 16, 2017

 

So far, the world markets seem to be shrugging off the sabre-rattling coming from North Korea (normal behavior) and the U.S. White House (complete departure from policy). The smart money is betting that the distant but suddenly headline-grabbing possibility of the first conflict between two countries armed with nuclear weapons will amount to a tempest in a teapot.   
 

Meanwhile, the U.S. stock market has been testing new highs for months, and experts cannot quite explain why valuations have been rising amid such low volatility.  
 

So the question is quite logical: isn’t this a good time to pare back or get out of the market until valuations return to their historical norms, or at least until the North Korean “crisis” blows over?   
 

The quick answer is that there’s never a good time to try to time the market.  The longer answer is that this may actually be a particularly bad time to try it.   
 

What’s happening between the U.S. and Korea is admittedly unprecedented.  In the past, the U.S. largely ignored the bluster and empty threats coming out of the tiny, dirt-poor Communist regime, and believe it or not, that also seems to be what the military doing now.  Yes, our President did blurt out the term “fire and fury” in impromptu remarks to the press, and later doubled down on the term by suggesting that his warning wasn’t worded strongly enough.  But the U.S. military seems to be responding with a yawn.  There are no Naval carrier groups anywhere near Korea at the moment; the U.S.S. Carl Vinson and the U.S.S. Theodore Roosevelt are both still engaged in training exercises off the U.S. West Coast, and the U.S.S. Nimitz is currently patrolling the Persian Gulf.  Nor has the State Department called for the evacuation of non-essential personnel from South Korea, as it would if it believed that tensions were leading toward a military confrontation.   
 

Meanwhile, on the home front, the U.S. economy continues to grow slowly but steadily, and in the second quarter 72.2% of companies in the S&P 500 index have reported earnings above forecast.   
 

What does that mean?  It means that you will probably see a certain amount of selling due to panic over the North Korean standoff, which will make stocks less expensive—a classic buying opportunity.  History has given all of us many opportunities to panic, going back to World War I and World War II, and more recently 9/11—but those who stayed the course reaped enormous benefits from those who abandoned their stock positions.
   

If you’re feeling panic over the North Korean situation, by all means, go in the nearest bedroom and scream—and then share some sympathy for the Americans living in the island territory of Guam, which is in the direct path of the North Korean bluster.  Just don’t sabotage your financial well-being in the process.   
 

Sincerely, 

Edward J. Kohlhepp, Jr., CFP®, MBA 
President  

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA
Founder & CEO

 

This material was prepared by BobVeres.com., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

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