Schwartz Financial Weekly Commentary 9/11/17

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The Markets

Last week, the aftermath of Hurricane Harvey and potency of Hurricane Irma dominated hearts and minds, but there were some diversions and some welcome news, too.

The NFL kicked off its 2017 season with the Chiefs’ win over the Patriots. The men’s U.S. soccer team tied Honduras to stay in the running for a World Cup spot. And, Sloane Stephens made the jump from 957th best on the women’s tennis tour to U.S. Open Champion.

Also, last week, President Trump signed a bipartisan bill authorizing relief for victims of Hurricane Harvey. The damage from Harvey has been estimated at about $50 billion, reported Yahoo! Finance, and the damage from Hurricane Irma may be even greater.

The signed bill also raised the debt ceiling, avoided a U.S. Treasury default, and funded the government for three months. These aspects of the legislation may have been more important to stock markets, according to a source cited by Barron’s:

“Dubravko Lakos-Bujas, head of U.S. equity strategy and global quantitative research at JPMorgan, observes that the S&P 500 has dropped about 2 percent when hurricanes make landfall, as sectors that get slammed – think insurance companies, hotels, and cruise lines – are offset by ones that benefit, like autos, energy and equipment services, and basic materials for construction. A failure to raise the debt ceiling or pass a budget, though, has typically caused the market to drop 3 percent to 5 percent. ‘In essence, the market risk associated with the failure of passing the budget and addressing the debt ceiling has been pushed out for now…’”

Major U.S. stock markets finished the week slightly lower. The Standard & Poor’s 500 Index remains less than 1 percent below its all-time high.

Data as of 9/8/17 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) -0.6% 9.9% 12.8% 7.1% 11.5% 5.4%
Dow Jones Global ex-U.S. 0.6 18.1 14.1 1.0 5.0 -0.2
10-year Treasury Note (Yield Only) 2.0 NA 1.6 2.5 1.7 4.3
Gold (per ounce) 2.0 16.2 0.2 2.3 -4.9 6.7
Bloomberg Commodity Index -0.3 -3.1 -0.5 -12.0 -10.5 -6.7
DJ Equity All REIT Total Return Index 0.6 7.7 1.8 8.4 9.9 7.0
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

how do you protect personal data? Last week, Equifax, one of three major consumer credit reporting agencies, was hacked. The New York Times reported the company had data on more than 820 million consumers and more than 91 million businesses worldwide. Estimates suggest 143 million Americans may have been affected.

It’s no surprise new ways to safeguard personal data are on the horizon. Some involve blockchain technology, which underlies cryptocurrencies but has many other potential applications. PCMag.com described it like this:

“People often get bogged down in technological complexity when trying to understand blockchain, but the basic concept is a simple and universal one. We have facts and information we don’t want accessed, copied, or tampered with, but on the Internet, there’s always a chance it could be hacked or modified. Blockchain gives us a constant – a bedrock we know won’t change once we put something on it and where a transaction will be verified only if it follows the rules.”

In July, The Economist reported startup companies have begun using blockchain to register valuable assets, manage personal information, and provide ‘truth’ services that ensure research data integrity. Governments are embracing blockchain applications to manage land registries and corporate recordkeeping, among other things. Another potential application for blockchain is maintaining immutable personal data:

“One of the first things done for a baby could be to give the newborn an entry in a blockchain, the crypto-equivalent of a birth certificate. This sounds Orwellian, but it does not have to be. On the contrary, if people’s identity is anchored in one or several blockchains, this would give them more control over it and their personal data.”

If blockchain applications are successful, it may become easier to keep personal data safe online.

 Weekly Focus – Think About It

“I’m not much but I’m all I have.”

–Philip K. Dick, Author of Martian Time-Slip

Value vs. Growth Investing (9/8/17)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market -0.32 11.18 -0.46 1.68 14.73 8.98 13.63
US Core -0.33 11.72 -0.40 1.08 15.64 9.98 14.78
US Growth 0.07 19.61 0.80 2.64 18.42 10.08 13.89
US Large Cap -0.27 12.67 -0.22 2.13 16.14 9.60 13.70
US Large Core -0.19 13.96 0.07 1.63 18.32 11.17 15.41
US Large Growth 0.15 21.37 0.85 2.87 20.06 10.97 14.42
US Large Val -0.81 3.39 -1.71 1.71 10.12 6.61 11.35
US Mid Cap -0.38 8.62 -0.93 0.64 11.59 7.51 13.87
US Mid Core -0.60 8.26 -1.36 -0.01 9.72 7.23 13.68
US Mid Growth -0.12 15.70 0.85 2.18 14.56 7.44 12.48
US Mid Val -0.42 2.07 -2.42 -0.41 10.31 7.74 15.47
US Small Cap -0.72 3.71 -1.53 0.01 9.57 6.66 12.10
US Small Core -0.89 1.36 -2.14 -1.24 8.12 6.44 12.15
US Small Growth -0.34 12.62 0.09 1.44 12.49 8.05 12.18
US Small Val -0.95 -2.46 -2.62 -0.22 7.75 5.40 11.87
US Value -0.74 2.71 -1.92 1.15 10.03 6.77 12.23
 ©2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) is not warranted to be accurate, complete or timely. Morningstar is not responsible for any damages or losses arising from any use of this information and has not granted its consent to be considered or deemed an “expert” under the Securities Act of 1933. Past performance is no guarantee of future results.  Indices are unmanaged and while these indices can be invested in directly, this is neither a recommendation nor an offer to purchase.  This can only be done by prospectus and should be on the recommendation of a licensed professional.

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How to Protect Yourself—and Your Money—From Hackers (Equifax Hack)

You’ve probably seen headlines like this over the past few days:

Equifax® Says Cyberattack May Have Hit 143 Million Customers 1

Every year, it seems more and more companies are falling victim to hackers. Even large organizations like Verizon®, Walmart®, and Target® aren’t immune. But the recent cyberattack on Equifax is especially noteworthy. As one of the three largest credit-reporting companies in the United States, Equifax stores a lot of private information. In this case, names, addresses, birthdates, Social Security numbers and even driver’s license numbers were stolen.

What can hackers do with someone’s name, birthdate, address and Social Security number? The answer is chillingly simple: take the victim’s identity and use it for themselves.

Fortunately, there are steps you can take to protect yourself.

What to Do After a Data Breach

In a situation like this, there are both reactive and proactive steps to take. Let’s cover reactive steps first.

You may be asking yourself, “How do I know if I have personally been affected by Equifax’s data breach?” Equifax has created a website, http://www.equifaxsecurity2017.com, where you can check if your personal information has been compromised. You can also enroll in a free credit- monitoring service provided by Equifax.

However, I would exercise caution before going there. The website asks you to provide the last six digits of your Social Security Number to perform the check. Given their recent history, it’s reasonable to be wary of providing Equifax more personal information.

In addition, a report by the Washington Post suggests that “enrolling in the Equifax checker program … potentially restricts your legal rights. Buried in the terms of service is language that bars those who enroll … from participating in any class-action lawsuits that may arise from the incident.”2

It’s not my place to tell you whether to use the website or not, and indeed, the Federal Trade Commission’s official position is that “if a company responsible for exposing your information offers you free credit monitoring, take advantage of it.”3 But whether you choose to use Equifax’s checker website or not, there are additional steps the government suggests you take:3

  1. Get a free credit report from annualcreditreport.com. Check for any accounts or charges you don’t recognize.
  2. Consider contacting your financial institution and placing a “credit freeze.” This makes it harder for someone to open a new account in your name.
  3. File your taxes as early as possible—before a scammer can. Tax identity theft happens when someone uses your Social Security number to get a tax refund or a job.
  4. Don’t believe anyone who calls and says you’ll be arrested unless you pay for taxes or debt—even if they have part or all of your Social Security number, or say they’re from the IRS.
  5. Watch for signs of identity theft. Warning signs include withdrawals from your bank account you can’t explain, failure to receive expected bills, and merchants refusing your checks.

Changing your online passwords and signing up for a third-party credit-monitoring service are also prudent steps.

For more information, I recommend visiting www.identitytheft.gov.

Proactive Steps to Take

Whether your personal information was exposed or not, there are some basic steps everyone should take to protect their identity. Here are just a few:

  • Delete your saved payment methods from online shopping You will have to reenter your billing information each time you make a purchase, but it will protect your payment information if your account is breached or someone gains access to your login.
  • Review statements and credit reports regularly. Look for unauthorized charges or small amounts appearing on statements. Check your credit report regularly. Federal law allows you to get a free credit report every 12 months to review. Make sure all information is correct.
  • Don’t make impulsive decisions based on If you receive an email or phone call stating that it’s from your bank or the government, and that you’re in trouble, don’t provide the sender with any personal information. Typically, the government will not contact you by email or phone. They will contact you by mail. Your bank will never ask you to provide information through email either. If you’re concerned about the credibility of a call or email from your bank, contact the nearest branch and ask them.
  • If someone contacts you saying they’re a relative in trouble and need your help, ask them something that only your relative would know. Or ask a trick question that reveals they’re lying, such as “How’s your dog Scruffy? Did he get better?” when you know that relative doesn’t have a dog. If they say, “Oh he’s doing much better,” then you know they’re a fraud and you should immediately hang up.
  • Keep all personal documents in a safe place. Don’t carry them around with you, especially not your Social Security card.
  • Don’t open emails from senders you don’t recognize, no matter how interesting the subject line.
  • Choose a different way to Many merchants accept alternative ways to pay for goods and services, including Google® Wallet, Apple Pay®, or PayPal®. These services provide an extra layer of protection because they keep your credit card information stored but do not actually provide it to retailers when you pay.
  • Don’t use your bank cards online unless the site is secure and Make sure you are purchasing from a reputable company and website. Don’t trust a site just because it claims to be secure. Use credit cards so you can dispute the charges if something goes wrong. You can still be reimbursed for fraud on a debit card but the process often takes longer and your money is already gone.

None of these steps are foolproof, but by taking concrete steps to protect yourself, your identity, and your money, you make it much, much harder for hackers and scammers.

As always, please let me know if you have any questions or concerns. My team and I are always happy to be of service in any way we can.

Regards,

Michael L. Schwartz, RFC®, CWS®, CFS

P.S.  Please feel free to forward this commentary to family, friends, or colleagues.  If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added.

Michael L. Schwartz, RFC, CWS, CFS, a registered principal offering securities and advisory services through Independent Financial Group, LLC., a registered broker-dealer and investment advisor.  Member FINRA-SIPC. Schwartz Financial and Independent Financial Group are unaffiliated entities.

 

This information is provided for informational purposes only and is not a solicitation or recommendation that any particular investor should purchase or sell any security. The information contained herein is obtained from sources believed to be reliable but its accuracy or completeness is not guaranteed.  Any opinions expressed herein are subject to change without notice.  An Index is a composite of securities that provides a performance benchmark.  Returns are presented for illustrative purposes only and are not intended to project the performance of any specific investment.  Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly.  Past performance is not a guarantee of future results.

 

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

 

* The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices. 

 

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

 

* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.

 

* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

 

* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

 

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

 

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

 

* Past performance does not guarantee future results.

 

* You cannot invest directly in an index.

 

* Consult your financial professional before making any investment decision.

 

* To unsubscribe from our “market commentary” please reply to this e-mail with    “Unsubscribe” in the subject line, or write us at “mike@schwartzfinancial.com”.

How to Protect Yourself—and Your Money—From Hackers (Equifax hack)

You’ve probably seen headlines like this over the past few days:

Equifax® Says Cyberattack May Have Hit 143 Million Customers 1

Every year, it seems more and more companies are falling victim to hackers. Even large organizations like Verizon®, Walmart®, and Target® aren’t immune. But the recent cyberattack on Equifax is especially noteworthy. As one of the three largest credit-reporting companies in the United States, Equifax stores a lot of private information. In this case, names, addresses, birthdates, Social Security numbers and even driver’s license numbers were stolen.

What can hackers do with someone’s name, birthdate, address and Social Security number? The answer is chillingly simple: take the victim’s identity and use it for themselves.

Fortunately, there are steps you can take to protect yourself.

What to Do After a Data Breach

In a situation like this, there are both reactive and proactive steps to take. Let’s cover reactive steps first.

You may be asking yourself, “How do I know if I have personally been affected by Equifax’s data breach?” Equifax has created a website, www.equifaxsecurity2017.com, where you can check if your personal information has been compromised. You can also enroll in a free credit- monitoring service provided by Equifax.

However, I would exercise caution before going there. The website asks you to provide the last six digits of your Social Security Number to perform the check. Given their recent history, it’s reasonable to be wary of providing Equifax more personal information.

In addition, a report by the Washington Post suggests that “enrolling in the Equifax checker program … potentially restricts your legal rights. Buried in the terms of service is language that bars those who enroll … from participating in any class-action lawsuits that may arise from the incident.”2

It’s not my place to tell you whether to use the website or not, and indeed, the Federal Trade Commission’s official position is that “if a company responsible for exposing your information offers you free credit monitoring, take advantage of it.”3 But whether you choose to use Equifax’s checker website or not, there are additional steps the government suggests you take:3

  1. Get a free credit report from annualcreditreport.com. Check for any accounts or charges you don’t recognize.
  2. Consider contacting your financial institution and placing a “credit freeze.” This makes it harder for someone to open a new account in your name.
  3. File your taxes as early as possible—before a scammer can. Tax identity theft happens when someone uses your Social Security number to get a tax refund or a job.
  4. Don’t believe anyone who calls and says you’ll be arrested unless you pay for taxes or debt—even if they have part or all of your Social Security number, or say they’re from the IRS.
  5. Watch for signs of identity theft. Warning signs include withdrawals from your bank account you can’t explain, failure to receive expected bills, and merchants refusing your checks.

Changing your online passwords and signing up for a third-party credit-monitoring service are also prudent steps.

For more information, I recommend visiting www.identitytheft.gov.

Proactive Steps to Take

Whether your personal information was exposed or not, there are some basic steps everyone should take to protect their identity. Here are just a few:

  • Delete your saved payment methods from online shopping You will have to reenter your billing information each time you make a purchase, but it will protect your payment information if your account is breached or someone gains access to your login.
  • Review statements and credit reports regularly. Look for unauthorized charges or small amounts appearing on statements. Check your credit report regularly. Federal law allows you to get a free credit report every 12 months to review. Make sure all information is correct.
  • Don’t make impulsive decisions based on If you receive an email or phone call stating that it’s from your bank or the government, and that you’re in trouble, don’t provide the sender with any personal information. Typically, the government will not contact you by email or phone. They will contact you by mail. Your bank will never ask you to provide information through email either. If you’re concerned about the credibility of a call or email from your bank, contact the nearest branch and ask them.
  • If someone contacts you saying they’re a relative in trouble and need your help, ask them something that only your relative would know. Or ask a trick question that reveals they’re lying, such as “How’s your dog Scruffy? Did he get better?” when you know that relative doesn’t have a dog. If they say, “Oh he’s doing much better,” then you know they’re a fraud and you should immediately hang up.
  • Keep all personal documents in a safe place. Don’t carry them around with you, especially not your Social Security card.
  • Don’t open emails from senders you don’t recognize, no matter how interesting the subject line.
  • Choose a different way to Many merchants accept alternative ways to pay for goods and services, including Google® Wallet, Apple Pay®, or PayPal®. These services provide an extra layer of protection because they keep your credit card information stored but do not actually provide it to retailers when you pay.
  • Don’t use your bank cards online unless the site is secure and Make sure you are purchasing from a reputable company and website. Don’t trust a site just because it claims to be secure. Use credit cards so you can dispute the charges if something goes wrong. You can still be reimbursed for fraud on a debit card but the process often takes longer and your money is already gone.

None of these steps are foolproof, but by taking concrete steps to protect yourself, your identity, and your money, you make it much, much harder for hackers and scammers.

As always, please let me know if you have any questions or concerns. My team and I are always happy to be of service in any way we can.

How to find unclaimed assets

There are many types of unclaimed assets – back wages, old retirement plans, refunds, old bank accounts and savings bonds. Periodically, a company will send you a letter stating they found an unclaimed asset and they can help you claim it for a fee. Most companies will only do this for assets with a value that makes it worth the effort for them. However, what they don’t tell you is that you can find unclaimed assets and totally claim them for free. How do you do this?

Places to find unclaimed assets

Each state has a database of unclaimed assets, and there are sites that list federal sources of unclaimed assets. Fortunately, all these sites are listed at the usa.gov website. Start with the most obvious first states where you lived. If you know there is a possibility of unclaimed tax refunds, pensions, or back wages, check those sites next.

What to do if you have unclaimed assets

If you get a “hit” and have unclaimed assets, the next step is to file a claim for those assets. This is fairly easy. The state will request a form and some supporting documentation, such as verification of the address where you lived when you owned the asset. Before you know it, you will have a check sent to you.

What to do if a deceased family member has unclaimed assets

This is a little trickier, and all the more reasons to check for unclaimed assets before someone dies. If the asset is large enough, it may require the executor to open probate. Depending on the estate, the fees and attorney costs may outweigh the benefit. Each state has different requirements, so check into what is needed to help you decide whether to place a claim.