Saturday, September 30, 2017

Being Smart with $$ -- Thumbs Should Not Make the Rules

Thumbs should NOT be making the rules!
A month ago we were told that September is the worst month for stocks. Perhaps you want to wait out this month and wait for the better months, they said. Last month Kiplinger Closing Bell quoted Yardeni Research warning that September falls more often than it rises. However, if you followed this Rule of Thumb and sat out the last month you missed a 2.61% gain in the S&P 500. To put that in perspective, if every month rose that much you would earn 36% for the year. Maybe we better let those thumbs stick to hitchhiking instead of rule making and keep our financial plans on the right course. Stay invested in the asset classes that are right for your personal circumstances and avoid the temptation of timing the market.  Let me know if I can help you create a portfolio that is right for you.
- Larry Pike, CFA, Client Priority Financial Advisors LLC

Thursday, September 28, 2017

Being Smart with $$ -- So many Ways to Get Scammed


So many ways the bad guys are trying to scam you!

Phone call:  “This is the IRS.  Send us money now or you will go to jail.” FRAUD!  The IRS will always mail you a notice of payment due first and will not demand payment over the phone by prepaid debit card on the spot.  Call the IRS directly if you have a concern.

Phone call:  “This is the IRS, we have a refund for you.”  FRAUD!  This scammer is likely trying to get you to reveal private information. 

Email from your bank:  “Your account has had a security issue.  Please click this link to change your password.”  FRAUD!  The security issue is the email itself.  Never click a link from what appears to be your bank.  Scammers create lookalike websites so you think you’re on your bank’s website when you click the fake link.  Open a new browser and go directly to your bank’s website if you have concerns.

Also:  - File your tax return as early as possible so scammers can’t file a fake one and make off with your refund.  - Set up your online Social Security account so fraudsters can’t.  – Freeze your credit at each of the 3 major credit bureaus to prevent fraudulent use of your credit.   

Be smarter than the crooks.  Don’t give out private information unless you know for sure who you are talking to, and if you didn’t initiate the call then you really don’t know who you’re talking to.  Don’t click links in emails when these could easily be viruses designed to invade your computer.  Even if it looks like a friend sent it, they may not have. 
Who wants to go back to the days of horses and buggies?
- Larry Pike, CFA, Client Priority Financial Advisors LLC
-
www.clientpriority.com 

Wednesday, September 20, 2017

Being Smart with $$ -- How to Protect Yourself by Freezing Your Credit


The Equifax breach has us all concerned that we could be the next victim of identity theft.  We can check our credit reports periodically but that only reveals a problem after it has happened.  We can purchase credit monitoring but that comes with a sticker price of as much as $300 per year.  Or we can freeze our credit preventing anyone from applying for loans under our names which manages the problem before it occurs. Freezing your credit comes with inconveniences as you will need to unfreeze your credit files each time you want to apply for a mortgage, car loan or new credit card and it may even cost a fee to freeze and unfreeze your files (varies by state).  Additionally, you will need to plan ahead by a couple of days when applying for a loan to make your credit available to legitimate companies.  But if you consider that credit monitoring costs hundreds of dollars and you might not apply for credit more than once per year, perhaps in this age of cyber insecurity, it’s time to take the more aggressive approach. (Fees indicated are for Massachusetts residents and vary by state.  Victims of identity theft may be able to request a freeze without charge but documentation is required.)

Step by step instructions to freeze your credit.  This process must be completed with each of the 3 credit bureaus:

Page 1:  Fill in personal information including address and social security number plus a code displayed that shows you are not a robot.
Page 2:  Check the box:  Place a security freeze
Page 3:  Submit – to request the freeze
Page 4:  BE SURE TO PRINT THE PDF FILE THAT IS NOW OFFERED.  It contains a 10-digit PIN that will be required to unfreeze your credit in the future.
Note:  The Equifax website indicated that a $5 fee is required to initiate a freeze and to create a temporary lift or permanent removal of the freeze.  However, no fees were requested during the freezing process.  

2. Experian


Click: Add a security freeze
Click: Apply online
Next page:  Fill in your personal information including address and social security number.
Next page:  You will be required to submit credit card information to pay a $5 fee for this process.
Next page:  You will be asked security questions, such as what bank you have used for a certain product, to confirm your identity.
Finally, a page will be displayed with your PIN needed to unfreeze the account in the future.  You can print this page but BE SURE TO NOTE THE PIN NUMBER.
Note:  The Experian website indicates that a $5 fee will be required to create a temporary lift of the freeze or to remove the freeze entirely.

3. TransUnion

Page 1:  Register – to create an account.
Page 2:  Fill in your personal information including address and social security number and click Continue.
Page 3:  Create a user name and password and fill in additional information. Agree to terms and click Continue.
(It may next ask you to confirm your current address.)
Page 4:  Click “Add Security Freeze.”
Page 5:  Accept terms and continue.
Page 6:  Provide credit card information to pay a $5 fee for this process and click Continue.
Page 7:  Create a PIN and click Continue.
Page 8:  You will receive a confirmation of your credit freeze.  BE SURE TO NOTE YOUR PIN to be able to unfreeze your credit in the future.  
Note: The TransUnion website indicates that a $5 fee will be required to create a temporary lift of the freeze but a full removal of the freeze is free.

Tuesday, September 12, 2017

Being Smart with $$ -- What to Know About the Equifax Data Breach


You have likely heard on the news about the Equifax data breach which may have caused important personal information to be released to online thieves and may affect virtually all adult Americans. The information released may have included Social Security numbers, birth dates, addresses and possibly even driver’s license numbers.

Equifax is offering free credit monitoring services for one year but this may not be enough. Thieves could easily hold onto your information and wait to use it a year or more from now. Additionally, signing up for the service may affect your ability to receive restitution from the company. Equifax has set up a website where consumers can see if their information was compromised, but the buzz is that the information provided may be less than useful or certain. Consumers need to remain vigilant. The free monitoring service is called TrustedID Premier if you would like to take advantage of it.

What to do:

Get your free annual credit report from each of the three major credit companies. Review one report every four months to verify that no unusual activity has occurred in your name. Experian, TransUnion and Equifax are the three major credit bureaus.

Regularly check your credit card and bank statements for any inconsistencies. Thieves may try small transactions first to see if they get noticed before going for larger ones.  Even without a data breach, anyone with your bank account and routing numbers (such as anyone with one of your checks) could try to transfer funds from your account.  

Set up an online Social Security account.  If you do it, thieves can’t beat you to it and apply for YOUR benefits.  www.ssa.gov/myaccount  

File your taxes early. If you do, then thieves can't file a fake return and steal your refund.

You have the option to freeze your credit files however each time you personally apply for credit you will need to unfreeze access and then refreeze it after the fact. And each time may result in a fee of $5 to $10. You will need to contact each of the three credit bureaus (possibly even a fourth called Innovis) and once you complete the process they can only release your information to companies that already have you as a customer. You will have to save a PIN number in order to unfreeze your credit in the future which can take 24 hours and may prove inconvenient when applying for credit. But also consider that as thieves may have quite a bit of information on you, it is not inconceivable they could find a way unfreeze your files so you must continue to monitor your credit and not be lulled into a sense of complacency.

You can also request fraud alerts from the three credit bureaus which will indicate when someone has tried to open up a new account in your name. When you contact one of the three credit agencies, they will notify the other two. A fraud alert will last for 90 days and can be renewed.

You may choose to sign up for a credit monitoring service such as LifeLock or Experian CreditWorks
which will alert you anytime there is a change to your credit report. However, these services can be very pricey costing $100 per year for a limited service and up to $300 a year for a premium service. Critics of the services say you can do the monitoring yourself for free by watching your credit card and bank statements and getting your free credit reports three times a year. Additionally, while freezing your credit may be inconvenient and result in a fee each time you freeze or unfreeze, the cost of doing so may be far less than paying the annual cost of a credit monitoring service. A plus to the credit monitoring services is the inclusion of insurance that may reimburse you for certain losses and pay for certain legal bills if you become a victim of identity theft.  It should be noted that this insurance is often secondary to other coverage you may already have like homeowners insurance and protection offered by credit card companies for fraudulent charges. 

It all comes down to personal choice and how much time you believe you can commit to the process of protecting your identity. Unfortunately, we live in an age where your information can be used against you and you must be vigilant to protect yourself.

Thursday, September 7, 2017

Being Smart with $$ -- Do You REALLY Know What You're Paying in Fees?

Do you REALLY know how much you are paying in fees to your investment advisor? There are so many different ways your advisor may be collecting cash related to your account. Ask him/her:
How much money did you collect in fees from my account last year either directly from me or indirectly from others as payments related to my account holdings or activities? Say you want to know in actual dollars, not in percentages, as the real dollar amount may shock you. Ask how much your advisor received in commissions or loads for investments sold to you in the past and then wonder if those investments were best for you or best for the advisor. The amounts may be staggering and may be completely out of line with the service received or the portfolio returns achieved. The magnitude of fees paid are often obscured within confusing descriptions or hidden in the fine print. If your advisor doesn't give you a direct answer it should be obvious what that means and it's not good. Did your portfolio outperform a simple index-fund portfolio? Good chance it didn't. So why are you willing to pay $5,000 or $10,000 (or more!) every year? Demand transparency! And perhaps it's time to consider if an hourly, fee-based advisor can give you advice that is unbiased by complicated compensation schemes and without all the hidden costs. 
Larry Pike, CFA