December 26, 2016

Investment Knowledge and Behavior: Ask Yourself These Questions

While the results of the recent FINRA Foundation study Investors in the United States 2016 are interesting, “what’s really valuable is to ask some blunt questions about your own investment knowledge and behavior.”  Read five key findings, and some questions you should ask yourself.
1. Ask Yourself: Do you know what you own? You can learn a lot by reading your account statements each month and taking time to learn how you can make and lose money with each investment.
2.  Investors use financial professionals—but most don’t check them out.
Ask yourself: “Have you looked up the background of your financial professional? It’s free and takes just a few minutes to do so using FINRA BrokerCheck. Over half (58 percent) of those who use an advisor say that professional designations or certifications are very important. If you count yourself among that group, learn more about the any designations your advisor holds using FINRA’s professional designations tool.”
3.  Knowledge of investment concepts is low. “Only 10 percent of the respondents who took a 10-question investor literacy quiz could answer eight or more questions correctly.”
“Ask yourself: How well do I know the basics of investing? You can start by reviewing the questions and correct answers to the quiz in the Investor Literacy section of the study.”
4. “Investors own individual stocks and mutual funds. Ask yourself: Do I understand the concept of diversification? Particularly, if you own only individual stocks, consider having a conversation with your financial professional about diversification. Prepare by reading FINRA’s Diversifying Your Portfolio.”
5. “Some investors understand advisor compensation—and some don’t. Ask yourself: Do I know how my financial professional is compensated? If you are not sure, then ask.
The investor survey is a component of the FINRA Investor Education Foundation’s National Financial Capability Study, one of the largest and most comprehensive financial capability studies in the country. Data for the survey were collected in July 2015.”
To receive the latest Investor Alerts and other important investor information sign up for Investor News. For more details & source of direct quotes above):

App Traps to Watch for when Online Shopping

"A surge in bogus apps recently began flooding Apple and Android app stores mimicking well-known retailers and products — from Dollar Tree and Foot Locker to luxury brands including Jimmy Choo and Christian Dior. Some contain malware that can steal personal information or trigger ransomware to hijack mobile devices until a ransom is paid, notes the New York Times. Others encourage users to enter credit card information or log in using their Facebook credentials, which can jeopardize those accounts."
Defense: "Before downloading, carefully check app logos and descriptions for misspellings, missing letters (such as “Foot Locke” without the “r”) or poor English, as many fakes originate in China. Other red flags include poor or few customer reviews, indications the app just launched, or links to apps from other retailers."
Quoted directly from AARP Scam Alert:

Fake news and financial misinformation

Our political process is suffering from an abundance of fake "news" stories designed to sway public opinion and votes. Fake news is proliferating and being absorbed without question by people who have failed to learn critical thinking skills. By sticking only to news sources that agree with one's political beliefs, too many Americana are believing political stories that are false.
Unfortunately, fake news is making its way into the financial arena. The reliable website, the Squared Away Blog recently provided an example of fake news with both political content and consumer ramifications. Check out: Financial Misinformation Shared Online at BE SKEPTICAL! Ask yourself if there might be a political or financial gain behind a news story. Don't take for granted what you read on the internet or what your friends sends you via email. Don't just blindly pass along Facebook posts. Take a deep breath and tell yourself "Wait a minute! What is the source? How can I verify this information?" One resource is a resource from the non-partisan Annenberg Public Policy Center. Start the new year with the mantra: I WILL be skeptical and aware that fake news is proliferating. I WILL check out a variety of credible sources.

December 19, 2016

Understand Social Security before deciding when to claim retirement benefits

"Is it better to delay and get fewer years of higher income, or start early and get more years of lower income?" First, make sure you understand how Social Security benefits are calculated. Next estimate your expected longevity with a couple online calculators. Are you better off claiming benefits on your own record or your spouse's (or ex-spouse's) earnings history? Bradford M. Pine explains: "Every year you delay taking benefits 'earns' you 8% in additional Social Security income in the future."
Also, read: How well do you know Social Security? 

December 15, 2016

Mom’s Maiden Name? The Right Way to Answer Security Questions and More Online Safety Advice

After Yahoo’s record-setting security breach, it’s time to get smarter about account logins By Nathan Olivarez-Giles 12/15/16, The Wall Street Journal. Anyone can guess the answers to typical security questions.  

What to do instead: "You can spell the answer backward. You can write the answer in a different language. You can write the answer in the form of a question. Consider adding symbols (such as a #, $ or % character) or a capital letter at the beginning and end of answers, or in place of spaces." Sachin Kansal, computer security expert.

Massive Yahoo Hack: What you should do NOW!

In a massive security breach (more than a billion users affected) Yahoo reports that names, email addresses, telephone numbers, dates of birth, passwords and security questions and answers were stolen in 2013.
What to do if you ever created a Yahoo account:
1. Change your password
2.Turn On Two-Factor Authentication
3. Delete Old Accounts
4. Play It Safe Online
"Review your accounts for suspicious activity, don’t click links or download attachments from suspicious emails, and be cautious of messages asking for personal information."
Source: The Wall Street Journal, 12/15/16

Four Financial Gifts to Consider for the Holidays

Presents that encourage savings and reduce debt can be a lot more meaningful than another gadget, according to Veronica Dagher, writing for The Wall Street Journal (12/13/16). "Forget about buying your loved ones sweaters or gadgets this holiday season. Instead, consider giving a financial gift, not cash or a check stuffed in an envelope. Think of gifts that can help a person save for college or deal with a big expense, or teach them how to manage their money more effectively."
1. Give time with a financial planner.
2. Help fund post-secondary education with a 529 savings plan.
3. Help pay bills. Most people need to pay down debt more than they need another consumer item. For those with student loans, money to help repay would be most welcome. 
4. Make a donation to a charity in honor of the gift recipient. For children, a donation to their local zoo, bird sanctuary, museum, recreational program, or other program they benefit from... along with a related physical gift such as an item from the zoo or museum's shop. 

December 13, 2016

More reason to ditch Wells Fargo bank

Today (12/13/16) The Wall Street Journal reported that "U.S. regulators slapped Wells Fargo with new regulatory sanctions, saying the firm failed to address alleged 'deficiencies' in a plan to manage its own bankruptcy without a taxpayer bailout." It appears that the executives running the bank are pretty clueless as reporters Tracy and Glazer wrote: the rebuke was "another black eye for a bank that is still reeling from a scandal over its creation of bogus customer accounts. Even more stinging: the news was akin to failing a make-up test as the San Francisco bank had failed an initial test in April."
Consumers have so many choices for where to get banking services; why would anyone stick with Wells Fargo after the way it has mistreated its customers AND low-paid employees who were forced to implement the egregious policies. Further, the bank has fired many of those employees when the top decision makers should be the ones losing their jobs, pensions, and termination perks.
Consumers: check out a credit union near you!

Dealing with the financial aspects of death of spouse

How to prepare for the death of your spouse:Important documents and account numbers to know. by Art Koff  
In addition to multiple copies of a death certificate you'll need:
• A copy of your marriage license
• Your spouse's Social Security number and last statement
• Your spouse's insurance policy
• The last will & testament
• Durable power of attorney
• Health care agent and living will
• Passwords and logins for online accounts
• Your spouse's birth certificate
• Your spouse's military discharge papers and veteran's benefit statement.
Prepare now and you will save yourself — and your family — a great deal of heartache.
You should be aware of where the important documents you will need are located.
This form for listing personal assets should be filled out now.
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