Dairyland Peach http://dairylandpeach.com Sauk Centre, Minnesota Fri, 30 Jan 2015 01:31:42 +0000 en-US hourly 1 BLT Dip http://dairylandpeach.com/2015/01/blt-dip/ http://dairylandpeach.com/2015/01/blt-dip/#comments Fri, 30 Jan 2015 01:31:42 +0000 http://dairylandpeach.com/?p=19261 1 lb. bacon
1 c. mayonnaise
1 tomato – peeled, seeded and diced
1 c. sour cream

Fry bacon, drain on paper towels. In a medium bowl, combine mayonnaise and sour cream. Crumble bacon into the sour cream and mayonnaise mixture. Mix in tomatoes just before serving.

]]>
http://dairylandpeach.com/2015/01/blt-dip/feed/ 0
Buffalo Chicken Dip http://dairylandpeach.com/2015/01/buffalo-chicken-dip/ http://dairylandpeach.com/2015/01/buffalo-chicken-dip/#comments Fri, 30 Jan 2015 01:30:24 +0000 http://dairylandpeach.com/?p=19259 2 (10 oz.) cans chunk chicken, drained
1 c. Ranch dressing
3/4 cup pepper sauce
2 (8 oz.) packages cream cheese, softened
1 bunch celery, cleaned and cut into 4-inch pieces
1 1/2 c. c. shredded Cheddar cheese
1 (8 oz.) box chicken flavored crackers

Heat chicken and hot sauce in a skillet over medium heat, until heated through. Stir in cream cheese and ranch dressing. Cook, stirring until well blended and warm. Mix in half of the shredded cheese, and transfer the mixture to a slow cooker. Sprinkle the remaining cheese over the top, cover, and cook on low setting until hot and bubbly. Serve with celery sticks and crackers.

]]>
http://dairylandpeach.com/2015/01/buffalo-chicken-dip/feed/ 0
Turkey Surprise http://dairylandpeach.com/2015/01/turkey-surprise/ http://dairylandpeach.com/2015/01/turkey-surprise/#comments Fri, 30 Jan 2015 01:29:02 +0000 http://dairylandpeach.com/?p=19257 4 Tbsp. shortening
1/2 clove garlic, chopped fine
4 Tbsp. flour
1 Tbsp. soy sauce
3 c. diced turkey

Hot cooked rice (or noodles or biscuts), chow mein noodles. Melt shortening, add garlic and sauté slightly. Stir in flour and cook until bubbly, stirring constantly. Add broth or chicken bouillon (two bouillon cubes in two cups boiling water), soy sauce, turkey and seasonings, if desired. Cook until thickened and thoroughly heated about two minutes. Serve with hot cooked rice. Makes six servings.

]]>
http://dairylandpeach.com/2015/01/turkey-surprise/feed/ 0
Garlic Rye Toasties http://dairylandpeach.com/2015/01/garlic-rye-toasties/ http://dairylandpeach.com/2015/01/garlic-rye-toasties/#comments Fri, 30 Jan 2015 01:27:55 +0000 http://dairylandpeach.com/?p=19255 1/2 stick (1/4 c.) margarine softened
Garlic powder or 1 clove garlic, minced
24 slices party rye bread

If you are using raw garlic, combine it with the softened margarine and spread each slice of bread with the mixture. If you use garlic powder, first spread margarine on bread and then sprinkle with the garlic powder. Arrange slices on a baking sheet and bake in a hot oven (400) for 10 minutes or until crisp.

]]>
http://dairylandpeach.com/2015/01/garlic-rye-toasties/feed/ 0
Cauliflower With Garlic-Crumb Topping http://dairylandpeach.com/2015/01/cauliflower-with-garlic-crumb-topping/ http://dairylandpeach.com/2015/01/cauliflower-with-garlic-crumb-topping/#comments Fri, 30 Jan 2015 01:25:37 +0000 http://dairylandpeach.com/?p=19253 1 large head cauliflower
2 cloves garlic, minced
1 1/2 dry whole grain bread
1/4 c. wheat germ crumbs
1/2 c. butter (or low cholesterol margarine)
1 Tbsp. chopped parsley

Steam head of cauliflower whole, using a little water as possible, until its tender, but firm (approximately 20 minutes). Keep warm. Saute garlic, crumbs and wheat germ in butter until golden brown. Spoon over cauliflower, top with chopped parsley and serve (four to six servings).

]]>
http://dairylandpeach.com/2015/01/cauliflower-with-garlic-crumb-topping/feed/ 0
Creamed Carrots And Peas http://dairylandpeach.com/2015/01/creamed-carrots-and-peas/ http://dairylandpeach.com/2015/01/creamed-carrots-and-peas/#comments Fri, 30 Jan 2015 01:23:54 +0000 http://dairylandpeach.com/?p=19250 4 large carrots
3 Tbsp. butter
2/3 c. milk
1 clove garlic, minced
1 c. fresh or frozen peas
2 -3 Tbsp. flour
Pinch of nutmeg
Pinch of sugar
Some chopped parsley
(Optional, some finely minced onion)

Cut the carrots up into 1/4-inch rounds and simmer for about 20 minutes or until tender. When cooked, drain and put in a medium saucepan with the butter, sugar, milk, garlic, parsley, onion and peas. Add the flour, mixed with a little cold water and blend well. Add the nutmeg and simmer for about three minutes until the sauce is thick. Serve at once.

]]>
http://dairylandpeach.com/2015/01/creamed-carrots-and-peas/feed/ 0
Garlic Soup http://dairylandpeach.com/2015/01/garlic-soup/ http://dairylandpeach.com/2015/01/garlic-soup/#comments Fri, 30 Jan 2015 01:21:50 +0000 http://dairylandpeach.com/?p=19248 8 large cloves of garlic
2 medium potatoes
1 bay leaf
1/2 tsp. dry basil
1 tsp. dry parsley
Salt and pepper
2 Tbsp. butter
4 cups water

Peel the garlic cloves and put them into a saucepan. Peel the potatoes and chop into 1/2-inch pieces and put in pan. Pour in four cups water. Add the bay leaf, basil, parsley, salt and pepper. Bring to a boil and cover; then simmer for about 30 minutes. Remove bay leaf and pour the mixture into a blender and puree it. Return to pan and reheat and serve. Serves about four people.

]]>
http://dairylandpeach.com/2015/01/garlic-soup/feed/ 0
Chicken Sans Souci http://dairylandpeach.com/2015/01/chicken-sans-souci/ http://dairylandpeach.com/2015/01/chicken-sans-souci/#comments Fri, 30 Jan 2015 01:20:04 +0000 http://dairylandpeach.com/?p=19245 2-1/2 to 3 lbs. chicken pieces
2 Tbsp. soft margarine
Salt and pepper
1 c. orange juice

Use an assortment of your favorite chicken parts. Trim away ecess skin and fat. Soften the margarine and rub the chicken pieces with it. Sprinkle with salt and pepper. Put in a pan or casserole, pour in the orange juice, bake for 45 minutes at 375 degrees. Serves four.

]]>
http://dairylandpeach.com/2015/01/chicken-sans-souci/feed/ 0
Stuffed Baked Potatoes http://dairylandpeach.com/2015/01/stuffed-baked-potatoes/ http://dairylandpeach.com/2015/01/stuffed-baked-potatoes/#comments Fri, 30 Jan 2015 01:19:07 +0000 http://dairylandpeach.com/?p=19242 6 large baking potatoes
1-1/2 or more low-fat cottage cheese
Garlic to taste
4 green onions, minced
Paprika
2 Tbsp. Parmesan cheese

Wash and dry the potatoes. Prick the skins. Bake at 425° for 60 minutes or until done. Putting a metal skrewer through each potato saves cooking time. Cut a slice from the top of each potato and scoop out the pulp. In a blender, whip the cottage cheese until creamy. Mash the potato pulp and blend enough of the cottage cheese to make a light, fluffy-mixture. Stir in green onions. Spoon the mixture back into the shells, mounding it slightly. Place the stuffed potatoes on a baking sheet, dust the tops with Parmesan cheese and paprika and return to oven until lightly browned.

]]>
http://dairylandpeach.com/2015/01/stuffed-baked-potatoes/feed/ 0
Panko Crusted Spinach and Artichoke Dip http://dairylandpeach.com/2015/01/panko-crusted-spinach-and-artichoke-dip/ http://dairylandpeach.com/2015/01/panko-crusted-spinach-and-artichoke-dip/#comments Fri, 30 Jan 2015 01:17:04 +0000 http://dairylandpeach.com/?p=19240 1 pkg. frozen chopped spinach
1 14 oz. can artichoke hearts
1 15 oz. can white beans
2 cloves garlic, minced
1 cup cream cheese
2 cups Asiago cheese, grated
3/4 cup sour cream
1 tsp. lemon rind, grated
1/2 cup mayonnaise
1 pinch salt and pepper
3 Tbsp. panko bread crumbs

Start by defrosting and squeezing water out of spinach. Open and drain cans of artichokes and white beans. Combine drained spinach with grated cheese and chopped artichoke hearts. Place the beans, spinach and artichoke hearts in a food processor and pulse together until well combined (don’t over mix). Then, mix with the remaining ingredients (except for the panko bread crumbs). Lightly grease or spray a two-quart baking dish. Fold in mixture. Top with panko bread crumbs. Bake in a pre-heated 375 degree oven uncovered for 25 minutes. Serve immediately with pita chips, crackers or crostini.

]]>
http://dairylandpeach.com/2015/01/panko-crusted-spinach-and-artichoke-dip/feed/ 0
How to Talk About Elder Care http://dairylandpeach.com/2015/01/how-to-talk-about-elder-care/ http://dairylandpeach.com/2015/01/how-to-talk-about-elder-care/#comments Thu, 29 Jan 2015 21:00:02 +0000 http://dairylandpeach.com/?guid=c3d6c41e7b07c175d41122ebf348c427 Emotions involved with caring for the elderly can seem almost as overwhelming as the finances. As your loved ones age, what topics must you be ready to discuss? Beyond money, you need to talk about independence and basic preferences for the way individuals want to live or die.

First, realize that you’re far from alone. According to the Genworth 2014 Cost of Care Survey, at least 70% of people older than 65 will eventually need some degree of long-term care (national median daily cost for a private room in a nursing home: $240).

Some ideas to get the conversation going:

Start with the most important priorities. Maybe this first conversation isn’t just about finding such documents as your loved ones’ will or health-care power of attorney (in case they become unable to make medical decisions), though you must eventually get to those. This conversation often begins with how you suddenly notice that your parent or other loved one moves slower, forgets more or clearly looks worse.

Jumping into money issues first is usually a mistake. Instead, consider dealing initially with immediate health and lifestyle issues.

Prepare questions in advance. You need some basic information: the location of important papers; how household expenses are paid; contact information on doctors and specialists; details of medicines; and whether your loved ones have a will, an advanced medical directive (similar to a health-care power of attorney) and a written funeral plan.

The latter specifies such details as desired types of services, viewing, the funeral itself and any memorials after burial. Also, does the funeral plan mention what money or burial insurance exists to pay for it?

Your family’s personal circumstances may necessitate dozens more questions. When creating this list, ask yourself well beforehand about everything you need to know if your loved one suddenly becomes sick or dies.

Be patient. In some families, a successful financial discussion comes only after several attempts and some frustration. Try to not become angry. Just keep starting the conversation until it catches on.

Plan a caregiving strategy together. Discuss your loved one’s preferences and trigger points for the various stages of care.

Recognize everyone’s limits. Most people almost always want to stay for as long as possible at home, but you must candidly address exactly how much you can manage at home as a caregiver and whether you might all need various services (such as a home aide, geriatric-care manager or an assisted living residence) during the different stages of aging still to come.

Writing down that information also saves terrible doubt and bitterness later.

Make sure everyone knows the plan. Once you settle on a strategy, make sure all family and friends understand both the plan and their assignments in it.

These conversations can take – as well as save – a lot of time, energy and love.

But having them while your loved ones are still healthy usually eases the burden for everyone if and when the moment comes for long-term care.

(See a video of my recent interview on this subject here.  This is an excerpt from a longer article that appeared in our firm’s recent client newsletter.  You can read it in its entirety here, beginning on page 2.)

Follow AdviceIQ on Twitter at @adviceiq.

Eric Hutchinson, CFP, CLU, ChFC, is president of Hutchinson Financial in Little Rock and Bentonville, Ark., and in Texarkana, Texas. He frequently speaks on financial topics and has appeared on Bloomberg Television in New York and on local NBC, CBS, ABC and FOX affiliates. Professional affiliations include the Financial Planning Association, the Certified Financial Planner Board of Standards and the Investment Management Consultants Association. His blog frequently features accompanying videos on that week’s topics. His e-book is The 250% Effect.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
Emotions involved with caring for the elderly can seem almost as overwhelming as the finances. As your loved ones age, what topics must you be ready to discuss? Beyond money, you need to talk about independence and basic preferences for the way individuals want to live or die.

First, realize that you’re far from alone. According to the Genworth 2014 Cost of Care Survey, at least 70% of people older than 65 will eventually need some degree of long-term care (national median daily cost for a private room in a nursing home: $240).

Some ideas to get the conversation going:

Start with the most important priorities. Maybe this first conversation isn’t just about finding such documents as your loved ones’ will or health-care power of attorney (in case they become unable to make medical decisions), though you must eventually get to those. This conversation often begins with how you suddenly notice that your parent or other loved one moves slower, forgets more or clearly looks worse.

Jumping into money issues first is usually a mistake. Instead, consider dealing initially with immediate health and lifestyle issues.

Prepare questions in advance. You need some basic information: the location of important papers; how household expenses are paid; contact information on doctors and specialists; details of medicines; and whether your loved ones have a will, an advanced medical directive (similar to a health-care power of attorney) and a written funeral plan.

The latter specifies such details as desired types of services, viewing, the funeral itself and any memorials after burial. Also, does the funeral plan mention what money or burial insurance exists to pay for it?

Your family’s personal circumstances may necessitate dozens more questions. When creating this list, ask yourself well beforehand about everything you need to know if your loved one suddenly becomes sick or dies.

Be patient. In some families, a successful financial discussion comes only after several attempts and some frustration. Try to not become angry. Just keep starting the conversation until it catches on.

Plan a caregiving strategy together. Discuss your loved one’s preferences and trigger points for the various stages of care.

Recognize everyone’s limits. Most people almost always want to stay for as long as possible at home, but you must candidly address exactly how much you can manage at home as a caregiver and whether you might all need various services (such as a home aide, geriatric-care manager or an assisted living residence) during the different stages of aging still to come.

Writing down that information also saves terrible doubt and bitterness later.

Make sure everyone knows the plan. Once you settle on a strategy, make sure all family and friends understand both the plan and their assignments in it.

These conversations can take – as well as save – a lot of time, energy and love.

But having them while your loved ones are still healthy usually eases the burden for everyone if and when the moment comes for long-term care.

(See a video of my recent interview on this subject here.  This is an excerpt from a longer article that appeared in our firm’s recent client newsletter.  You can read it in its entirety here, beginning on page 2.)

Follow AdviceIQ on Twitter at @adviceiq.

Eric Hutchinson, CFP, CLU, ChFC, is president of Hutchinson Financial in Little Rock and Bentonville, Ark., and in Texarkana, Texas. He frequently speaks on financial topics and has appeared on Bloomberg Television in New York and on local NBC, CBS, ABC and FOX affiliates. Professional affiliations include the Financial Planning Association, the Certified Financial Planner Board of Standards and the Investment Management Consultants Association. His blog frequently features accompanying videos on that week’s topics. His e-book is The 250% Effect.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
http://dairylandpeach.com/2015/01/how-to-talk-about-elder-care/feed/ 0
Unearthing Retirement Money http://dairylandpeach.com/2015/01/unearthing-retirement-money/ http://dairylandpeach.com/2015/01/unearthing-retirement-money/#comments Thu, 29 Jan 2015 19:30:01 +0000 http://dairylandpeach.com/?guid=cf924bc790eb0c1cdba58e69bb3612bb Now more than ever you must explore every detail of potential income for your golden years. Sometimes that takes a little legwork, the right questions and a willingness to admit that you don’t know the answers.

A few years ago, a firefighter in his early 50s, Keith, came to my firm. Keith spent his first 10 years of his working career on our local police force and switched to the fire department to finish his career. Soon after he arrived, we determined that Keith had roughly $80,000 in assets spread among a Roth individual retirement account, a traditional IRA and another retirement plan at Ohio Deferred Compensation, a supplemental retirement plan for my state’s public employees.

Keith knew he was going to get a pension, a potentially big bridge between his assets and his retirement expenses. He and his wife also put together a portfolio that matched the needs outlined in their written financial plan. Not until the final appointment did Keith ask me what I thought about Ohio’s Deferred Retirement Option Program (DROP).

The DROP is an optional benefit that allows eligible police officers and firefighters to accumulate a lump-sum of money for retirement based on a variable rate of interest. Enrollees can also purchase prior-service credit to reach eligibility requirements. I responded, “I think it’s great, if you’re eligible.”

Keith said that he did qualify but never enrolled. “Because I started being a firefighter later in life,” he explained, “I don’t have as many years in as others, so the only way to get enrolled [was] to buy back years from when I was on the police force.”

To think that a total of three appointments and roughly 12 hours of work took place and that we missed this instrumental detail of his retirement planning was relieving and exciting at the same time. I asked Keith if he was sure he had years to buy back.

When he left the police force, Keith sold all his pension assets to live on. He was able to buy those years back for the purposes of the DROP. Other financial advisors told him that they could manage his retirement money better than if he did buy back years to qualify for the DROP.

So why didn’t he mention it to me? “I was hesitant to ask you,” Keith said to me, “because I was made to feel stupid the last couple times I asked. But I wanted to make sure, so I thought I’d ask.”

In the past, my firm had other clients eligible for the DROP, and we knew it was an amazing program. I recommended that Keith and his wife visit to the Ohio Police & Fire Pension Fund, which oversees DROP, to find out how many years’ credit Keith might buy back and at what cost.

"Every day that you wait, the cost of buying those years back gets more and more expensive,” I told him.

Keith and his wife found out that buying back roughly eight years was about $72,000 – almost all Keith’s retirement savings. But as I assumed, the DROP account was projected to be worth more than $500,000 in slightly longer than seven more years. 

Keith was floored. He decided to liquidate enough assets to buy back the eight of his years on the police force. He only has about three years left before retirement, when he will collect the police and fire pension he originally expected plus another $500,000 to supplement his retirement income.

If not for digging deeper for the DROP, “I’d be working at the fire department when I’m 80,” Keith said.

Follow AdviceIQ on Twitter at @adviceiq.

Adam Koos, CFP, is an award-winning Certified Financial Planner, as well as founder and president of Libertas Wealth Management Group, Inc., a financial management firm, located in Columbus, Ohio.

Financial advisory and planning services offered though Libertas Wealth Management Group Inc, a Registered Investments Advisory Firm.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. No strategy assures success or protects against loss.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
Now more than ever you must explore every detail of potential income for your golden years. Sometimes that takes a little legwork, the right questions and a willingness to admit that you don’t know the answers.

A few years ago, a firefighter in his early 50s, Keith, came to my firm. Keith spent his first 10 years of his working career on our local police force and switched to the fire department to finish his career. Soon after he arrived, we determined that Keith had roughly $80,000 in assets spread among a Roth individual retirement account, a traditional IRA and another retirement plan at Ohio Deferred Compensation, a supplemental retirement plan for my state’s public employees.

Keith knew he was going to get a pension, a potentially big bridge between his assets and his retirement expenses. He and his wife also put together a portfolio that matched the needs outlined in their written financial plan. Not until the final appointment did Keith ask me what I thought about Ohio’s Deferred Retirement Option Program (DROP).

The DROP is an optional benefit that allows eligible police officers and firefighters to accumulate a lump-sum of money for retirement based on a variable rate of interest. Enrollees can also purchase prior-service credit to reach eligibility requirements. I responded, “I think it’s great, if you’re eligible.”

Keith said that he did qualify but never enrolled. “Because I started being a firefighter later in life,” he explained, “I don’t have as many years in as others, so the only way to get enrolled [was] to buy back years from when I was on the police force.”

To think that a total of three appointments and roughly 12 hours of work took place and that we missed this instrumental detail of his retirement planning was relieving and exciting at the same time. I asked Keith if he was sure he had years to buy back.

When he left the police force, Keith sold all his pension assets to live on. He was able to buy those years back for the purposes of the DROP. Other financial advisors told him that they could manage his retirement money better than if he did buy back years to qualify for the DROP.

So why didn’t he mention it to me? “I was hesitant to ask you,” Keith said to me, “because I was made to feel stupid the last couple times I asked. But I wanted to make sure, so I thought I’d ask.”

In the past, my firm had other clients eligible for the DROP, and we knew it was an amazing program. I recommended that Keith and his wife visit to the Ohio Police & Fire Pension Fund, which oversees DROP, to find out how many years’ credit Keith might buy back and at what cost.

"Every day that you wait, the cost of buying those years back gets more and more expensive,” I told him.

Keith and his wife found out that buying back roughly eight years was about $72,000 – almost all Keith’s retirement savings. But as I assumed, the DROP account was projected to be worth more than $500,000 in slightly longer than seven more years. 

Keith was floored. He decided to liquidate enough assets to buy back the eight of his years on the police force. He only has about three years left before retirement, when he will collect the police and fire pension he originally expected plus another $500,000 to supplement his retirement income.

If not for digging deeper for the DROP, “I’d be working at the fire department when I’m 80,” Keith said.

Follow AdviceIQ on Twitter at @adviceiq.

Adam Koos, CFP, is an award-winning Certified Financial Planner, as well as founder and president of Libertas Wealth Management Group, Inc., a financial management firm, located in Columbus, Ohio.

Financial advisory and planning services offered though Libertas Wealth Management Group Inc, a Registered Investments Advisory Firm.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. No strategy assures success or protects against loss.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
http://dairylandpeach.com/2015/01/unearthing-retirement-money/feed/ 0
Falling Prices: the Downside http://dairylandpeach.com/2015/01/falling-prices-the-downside/ http://dairylandpeach.com/2015/01/falling-prices-the-downside/#comments Thu, 29 Jan 2015 16:00:02 +0000 http://dairylandpeach.com/?guid=ea26021901d9952a4306c7928cb00c2a Falling prices are a good thing for the cash-strapped American consumer, whose income on average has fallen to where it was in 1994as we’ve reported. But behind every silver lining, there’s a black cloud. We are risking a plunge into the abyss known as deflation.

Deflation is typically a sign that all is not well with the economy. Prices fall when the economy is so weak that consumer demand shrinks. When prices drop, profits decrease, stock prices flag, and unemployment and bankruptcies increase.

Consumers put off purchases and wait for prices to fall further, which contributes to even further deflation. Deflation was an issue during the Great Depression, and a recession has accompanied every period of deflation.

Macintosh HD:Users:aiqinc:Desktop:Deflation-300x201.png

Raúl Ilargi Meijer of The Automatic Earth website says deflation “eats societies alive,” explaining that, “Deflation is not lower prices. Deflation is people not spending, then stores lowering their prices because nobody’s buying, then companies firing their employees, and then going broke. Rinse and repeat. Less spending leads to lower prices leads to more unemployment leads to less spending power.”

Very low inflation can also have a negative impact. As The Economist noted, “The most troubling effect of low inflation is on monetary policy. Central banks stimulate spending by reducing the real interest rate, which is the nominal interest rate minus the rate of inflation. This boosts investment and discourages saving, reducing the output gap. The real rate required to raise demand enough to balance investment and saving is called the equilibrium real rate.

“When demand is weak, the equilibrium real rate may be negative, and under low inflation it is difficult for a central bank to set a nominal rate that brings this about. And because nominal rates are in practice never less than zero (you can always just keep money in cash) deflation proper makes a negative real rate not just hard but arithmetically impossible: subtract a negative number (the inflation rate, in circumstances of deflation) from a number that has to be zero or higher and you always get something positive.”

On the surface, deflation does not appear to be a problem in America. But in today’s global economy, what happens in the rest of the world affects us, too. And much of the world is in a fright over deflation of the Japanese variety, which resulted in the famous “lost decade” (that is quickly becoming the “lost two decades,” with scant signs of recovery in sight).

In the 34 OECD countries alone (that’s the Organization for Economic Co-operation and Development), the number where deflation is a problem rose from four at the beginning of 2014 to 13 by the end of October. And that doesn’t include problem-child Japan, because its consumption tax boosted the inflation rate above 3%. (Note: If you’re trying to improve your economy, increasing taxes is not a good way to do it, even if it you need to boost your inflation rate.)

Countries with deflation issues include Greece (big surprise), Estonia, Hungary, Portugal, Sweden, Israel, Poland, Slovenia, Italy, Spain, Belgium, the Slovak Republic and Switzerland. The inflation rate is less than 1% in the Czech Republic, Denmark, France, Germany, Ireland, Luxembourg and the Netherlands, and it is threatening to go below 1% in the United Kingdom.

So if a majority of OECD countries have a deflation problem – or likely will soon – why shouldn’t the U.S. be worried about deflation?

Keep in mind that, as we’ve pointed out, the U.S. inflation rate has been significantly higher than the rate reported as the Consumer Price Index, when you factor out the cost of food and energy. Yes, oil prices have been falling, but that’s a pretty recent phenomenon.

In spite of lower oil prices, the only people in America who are worried about deflation are members of the Federal Reserve Board, who have been trying to push inflation up to 2% for years without success.

That’s shocking, as the Fed’s actions were unprecedented. Yet after $4 trillion in quantitative easing (its economic stimulus program using bond buying), the Fed has failed to achieve its 2% inflation goal – the needle on the inflation-meter barely budged.

Easy money policy creates inflation, because the greater the money supply, the less a dollar is worth. The dollar has been strengthening, though, since QE ended in October. With other countries turning to their own versions of QE in an attempt to ward off deflation, the dollar is likely to continue strengthening.

Like deflation itself, that’s good and bad.

With a stronger dollar, imports will cost less and American companies will likely need to drop their prices to remain competitive. You can travel to Europe now without taking a second mortgage on your home.

As baby boomers retire, they will likely spend less, and that could also contribute to deflation. But the children of retiring boomers are now in the workforce and, in many cases, are earning more and spending more, which helps balance boomer retirement.

While deflation remains in check, American consumers are likely thinking, “Bring it on!” But falling oil prices are a good illustration of the good and bad sides of deflation.

Dropping oil prices were an early Christmas present, giving consumers more money for discretionary spending – which they, in turn, spent on Christmas presents. While Christmas season sales were far from overwhelming in 2014, results to date indicate that they “met expectations,” thanks to lower unemployment and lower gas prices.

Conversely, regions of the U.S. where hydraulic fracturing and horizontal drilling have created an economic boom will suffer because of lower oil prices, as the industry becomes a victim of its own success.

While the U.S. is expected to pass both Saudi Arabia and Russia this year to become the world’s largest producer of oil, there will be fallout. With the economy slowing down just about everywhere but in the U.S., the supply of oil is now well in excess of demand. Some companies cannot produce oil profitably at the new, lower prices, so they will go bankrupt or be sold, and they will shelve projects that were in the planning stages.

It’s like a going out of business sale – consumers benefit from lower prices, but the business and the jobs it represents are gone for good.

So falling oil prices will hurt some parts of the U.S., just as the strengthening dollar will crimp businesses that rely heavily on exporting.

So, as deflation spreads through Europe, political and economic leaders will likely see the need to do something about it. That “something” is likely to be some form of easy money policy, even though the European Central Bank has already pushed interest rates into negative territory, by charging depositors a fee.

Recently, the European Central Bank launched a massive ($1.1 trillion) stimulus program, buying bonds to flood the Eurozone with money. President Mario Draghi fears deflation and figures that the region’s stagnant economy needs a jolt. 

Among other things, QE in the eurozone would make the euro weaker, which would make the dollar relatively stronger. And that would further harm American exporters and bring the U.S. closer to potential deflation, by lowering prices of imports even further.

To date, The Economist notes, “The ECB has put its hopes in targeted loans to banks, purchases of covered bonds that began on October 20th and purchases of asset-backed securities that are yet to start. Those efforts have yet to change the market’s psychology by much, in part because they will not significantly expand the ECB’s balance sheet, which has been shrinking as banks pay off previous loans. Investors associate larger central-bank balance sheets with a greater commitment to lifting up inflation.

“If that doesn’t work, the ECB could directly buy corporate bonds. There is €1.1 trillion ($1.4 trillion) of non-financial corporate debt and €7.8 trillion of financial corporate debt outstanding. Buying up some of this debt would allow a significant expansion of the ECB’s balance sheet. The next step would then be purchases of government bonds.”

In other words, quantitative easing. But The Economist article quotes Michael Pond of Barclays asking: “If it didn’t work for the Fed, why should it work for the ECB?” That’s a question worth pondering.

Follow AdviceIQ on Twitter at @adviceiq.

Brenda P. Wenning is president of Wenning Investments LLC in Newton, Mass. 

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
Falling prices are a good thing for the cash-strapped American consumer, whose income on average has fallen to where it was in 1994as we’ve reported. But behind every silver lining, there’s a black cloud. We are risking a plunge into the abyss known as deflation.

Deflation is typically a sign that all is not well with the economy. Prices fall when the economy is so weak that consumer demand shrinks. When prices drop, profits decrease, stock prices flag, and unemployment and bankruptcies increase.

Consumers put off purchases and wait for prices to fall further, which contributes to even further deflation. Deflation was an issue during the Great Depression, and a recession has accompanied every period of deflation.

Macintosh HD:Users:aiqinc:Desktop:Deflation-300x201.png

Raúl Ilargi Meijer of The Automatic Earth website says deflation “eats societies alive,” explaining that, “Deflation is not lower prices. Deflation is people not spending, then stores lowering their prices because nobody’s buying, then companies firing their employees, and then going broke. Rinse and repeat. Less spending leads to lower prices leads to more unemployment leads to less spending power.”

Very low inflation can also have a negative impact. As The Economist noted, “The most troubling effect of low inflation is on monetary policy. Central banks stimulate spending by reducing the real interest rate, which is the nominal interest rate minus the rate of inflation. This boosts investment and discourages saving, reducing the output gap. The real rate required to raise demand enough to balance investment and saving is called the equilibrium real rate.

“When demand is weak, the equilibrium real rate may be negative, and under low inflation it is difficult for a central bank to set a nominal rate that brings this about. And because nominal rates are in practice never less than zero (you can always just keep money in cash) deflation proper makes a negative real rate not just hard but arithmetically impossible: subtract a negative number (the inflation rate, in circumstances of deflation) from a number that has to be zero or higher and you always get something positive.”

On the surface, deflation does not appear to be a problem in America. But in today’s global economy, what happens in the rest of the world affects us, too. And much of the world is in a fright over deflation of the Japanese variety, which resulted in the famous “lost decade” (that is quickly becoming the “lost two decades,” with scant signs of recovery in sight).

In the 34 OECD countries alone (that’s the Organization for Economic Co-operation and Development), the number where deflation is a problem rose from four at the beginning of 2014 to 13 by the end of October. And that doesn’t include problem-child Japan, because its consumption tax boosted the inflation rate above 3%. (Note: If you’re trying to improve your economy, increasing taxes is not a good way to do it, even if it you need to boost your inflation rate.)

Countries with deflation issues include Greece (big surprise), Estonia, Hungary, Portugal, Sweden, Israel, Poland, Slovenia, Italy, Spain, Belgium, the Slovak Republic and Switzerland. The inflation rate is less than 1% in the Czech Republic, Denmark, France, Germany, Ireland, Luxembourg and the Netherlands, and it is threatening to go below 1% in the United Kingdom.

So if a majority of OECD countries have a deflation problem – or likely will soon – why shouldn’t the U.S. be worried about deflation?

Keep in mind that, as we’ve pointed out, the U.S. inflation rate has been significantly higher than the rate reported as the Consumer Price Index, when you factor out the cost of food and energy. Yes, oil prices have been falling, but that’s a pretty recent phenomenon.

In spite of lower oil prices, the only people in America who are worried about deflation are members of the Federal Reserve Board, who have been trying to push inflation up to 2% for years without success.

That’s shocking, as the Fed’s actions were unprecedented. Yet after $4 trillion in quantitative easing (its economic stimulus program using bond buying), the Fed has failed to achieve its 2% inflation goal – the needle on the inflation-meter barely budged.

Easy money policy creates inflation, because the greater the money supply, the less a dollar is worth. The dollar has been strengthening, though, since QE ended in October. With other countries turning to their own versions of QE in an attempt to ward off deflation, the dollar is likely to continue strengthening.

Like deflation itself, that’s good and bad.

With a stronger dollar, imports will cost less and American companies will likely need to drop their prices to remain competitive. You can travel to Europe now without taking a second mortgage on your home.

As baby boomers retire, they will likely spend less, and that could also contribute to deflation. But the children of retiring boomers are now in the workforce and, in many cases, are earning more and spending more, which helps balance boomer retirement.

While deflation remains in check, American consumers are likely thinking, “Bring it on!” But falling oil prices are a good illustration of the good and bad sides of deflation.

Dropping oil prices were an early Christmas present, giving consumers more money for discretionary spending – which they, in turn, spent on Christmas presents. While Christmas season sales were far from overwhelming in 2014, results to date indicate that they “met expectations,” thanks to lower unemployment and lower gas prices.

Conversely, regions of the U.S. where hydraulic fracturing and horizontal drilling have created an economic boom will suffer because of lower oil prices, as the industry becomes a victim of its own success.

While the U.S. is expected to pass both Saudi Arabia and Russia this year to become the world’s largest producer of oil, there will be fallout. With the economy slowing down just about everywhere but in the U.S., the supply of oil is now well in excess of demand. Some companies cannot produce oil profitably at the new, lower prices, so they will go bankrupt or be sold, and they will shelve projects that were in the planning stages.

It’s like a going out of business sale – consumers benefit from lower prices, but the business and the jobs it represents are gone for good.

So falling oil prices will hurt some parts of the U.S., just as the strengthening dollar will crimp businesses that rely heavily on exporting.

So, as deflation spreads through Europe, political and economic leaders will likely see the need to do something about it. That “something” is likely to be some form of easy money policy, even though the European Central Bank has already pushed interest rates into negative territory, by charging depositors a fee.

Recently, the European Central Bank launched a massive ($1.1 trillion) stimulus program, buying bonds to flood the Eurozone with money. President Mario Draghi fears deflation and figures that the region’s stagnant economy needs a jolt. 

Among other things, QE in the eurozone would make the euro weaker, which would make the dollar relatively stronger. And that would further harm American exporters and bring the U.S. closer to potential deflation, by lowering prices of imports even further.

To date, The Economist notes, “The ECB has put its hopes in targeted loans to banks, purchases of covered bonds that began on October 20th and purchases of asset-backed securities that are yet to start. Those efforts have yet to change the market’s psychology by much, in part because they will not significantly expand the ECB’s balance sheet, which has been shrinking as banks pay off previous loans. Investors associate larger central-bank balance sheets with a greater commitment to lifting up inflation.

“If that doesn’t work, the ECB could directly buy corporate bonds. There is €1.1 trillion ($1.4 trillion) of non-financial corporate debt and €7.8 trillion of financial corporate debt outstanding. Buying up some of this debt would allow a significant expansion of the ECB’s balance sheet. The next step would then be purchases of government bonds.”

In other words, quantitative easing. But The Economist article quotes Michael Pond of Barclays asking: “If it didn’t work for the Fed, why should it work for the ECB?” That’s a question worth pondering.

Follow AdviceIQ on Twitter at @adviceiq.

Brenda P. Wenning is president of Wenning Investments LLC in Newton, Mass. 

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
http://dairylandpeach.com/2015/01/falling-prices-the-downside/feed/ 0
Kids’ Harsh Money Lessons http://dairylandpeach.com/2015/01/kids-harsh-money-lessons/ http://dairylandpeach.com/2015/01/kids-harsh-money-lessons/#comments Wed, 28 Jan 2015 23:00:05 +0000 http://dairylandpeach.com/?guid=9f745db0a8159b6a7b1e8faee6e59a0c After last Christmas, millions of people – including maybe you – returned gifts you didn’t want and either exchanged or just pocketed a refund. The process only increased the pressure that exhausts everyone, especially parents: Rush and spend to the limit of your credit, often to help your kids. Your kids are watching, though, and for their own good you must teach realities about money.

Just before Christmas, I got a haircut. My haircutter talked about her only child, a 22-year-old son. She was a single mom who for 15 years supported him with a day-care service in her house before she started cutting hair.

Once her son turned 20, she asked him to pay a modest $100 monthly rent; he agreed. Then he started having his girlfriend over more often and my haircutter asked him to pay more because of the extra food and utilities. He refused and moved in with his grandparents.

My haircutter claimed the grandparents now spoil her son, an only grandchild they appear to see as capable of no wrong. The son attends the local community college and does not yet have a career.

The issue here is not the son paying $100 or $200 a month, but his learning to live in the real world where most people work hard every day to pay for rent, utilities, food and a car to get to work. If you know anything about the eating habits of a 22-year-old man and his girlfriend, my haircutter’s food bill alone probably hit $400 a month.

Rent for even a studio apartment averages more than $600 a month nationwide, not including utilities. When one adds $400 of food for two who are in their 20s, the minimum cost would be $1,000 per month for food and rent. The grandparents are making a big mistake not charging him rent, not to mention undermining the authority of his mom.

Many of the Greatest Generation (born between 1901 and 1924) or the Silent Generation (born between 1925 through 1945) complain about the money attitudes of boomers and boomers’ kids. Boomers, born from 1946 to 1964, benefited from the Great Depression hardships of their parents – moms and dads who vowed to save their children from suffering and who, consequently, often seemed to spoil the boomer kids.

Boomers in turn spoil their kids, so the trend simply accelerates. In this first American generation where most wives worked outside the home, material items sometimes substituted for quality family time. Many boomers’ kids grow up with their own room, television, computer, smartphone and eventually their own car.

A recent survey also showed that Americans largely believe their children know little about finances yet also talk to their kids about money only a handful of days annually: a scary disconnect.

Young-adult millennials must often live at home; those who hold college degrees also often hold jobs unrelated to a chosen career – if employed at all. Between huge student loan debt (more than $28,000, on average, for the recent graduate) and bad job prospects, these kids delay marriage and owning a home.

Serious numbers, serious decisions and no clear solution: Giving too much support to your kids and grandkids usually only fosters unrealistic expectations. Your job, like it or not, is to use money to teach kids about an increasingly harsh real world.

Follow AdviceIQ on Twitter at @adviceiq.

Dr. Harold Wong earned his Ph.D. in economics from UC Berkeley and passed the CPA exam in 1979. He has appeared on more than 400 television and radio programs and published numerous articles in 1,600 newspapers. He writes the column on money for The Arizona Republic, the largest daily newspaper in Arizona, where this article originally appeared in different form. Dr. Wong is a tax advisor and financial educator. He can be reached at (480) 706-0177, haroldwong1@yahoo.com, or www.drharoldwong.com.You can find much of his archived research at www.DrWongInvestorGuide.com.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
After last Christmas, millions of people – including maybe you – returned gifts you didn’t want and either exchanged or just pocketed a refund. The process only increased the pressure that exhausts everyone, especially parents: Rush and spend to the limit of your credit, often to help your kids. Your kids are watching, though, and for their own good you must teach realities about money.

Just before Christmas, I got a haircut. My haircutter talked about her only child, a 22-year-old son. She was a single mom who for 15 years supported him with a day-care service in her house before she started cutting hair.

Once her son turned 20, she asked him to pay a modest $100 monthly rent; he agreed. Then he started having his girlfriend over more often and my haircutter asked him to pay more because of the extra food and utilities. He refused and moved in with his grandparents.

My haircutter claimed the grandparents now spoil her son, an only grandchild they appear to see as capable of no wrong. The son attends the local community college and does not yet have a career.

The issue here is not the son paying $100 or $200 a month, but his learning to live in the real world where most people work hard every day to pay for rent, utilities, food and a car to get to work. If you know anything about the eating habits of a 22-year-old man and his girlfriend, my haircutter’s food bill alone probably hit $400 a month.

Rent for even a studio apartment averages more than $600 a month nationwide, not including utilities. When one adds $400 of food for two who are in their 20s, the minimum cost would be $1,000 per month for food and rent. The grandparents are making a big mistake not charging him rent, not to mention undermining the authority of his mom.

Many of the Greatest Generation (born between 1901 and 1924) or the Silent Generation (born between 1925 through 1945) complain about the money attitudes of boomers and boomers’ kids. Boomers, born from 1946 to 1964, benefited from the Great Depression hardships of their parents – moms and dads who vowed to save their children from suffering and who, consequently, often seemed to spoil the boomer kids.

Boomers in turn spoil their kids, so the trend simply accelerates. In this first American generation where most wives worked outside the home, material items sometimes substituted for quality family time. Many boomers’ kids grow up with their own room, television, computer, smartphone and eventually their own car.

A recent survey also showed that Americans largely believe their children know little about finances yet also talk to their kids about money only a handful of days annually: a scary disconnect.

Young-adult millennials must often live at home; those who hold college degrees also often hold jobs unrelated to a chosen career – if employed at all. Between huge student loan debt (more than $28,000, on average, for the recent graduate) and bad job prospects, these kids delay marriage and owning a home.

Serious numbers, serious decisions and no clear solution: Giving too much support to your kids and grandkids usually only fosters unrealistic expectations. Your job, like it or not, is to use money to teach kids about an increasingly harsh real world.

Follow AdviceIQ on Twitter at @adviceiq.

Dr. Harold Wong earned his Ph.D. in economics from UC Berkeley and passed the CPA exam in 1979. He has appeared on more than 400 television and radio programs and published numerous articles in 1,600 newspapers. He writes the column on money for The Arizona Republic, the largest daily newspaper in Arizona, where this article originally appeared in different form. Dr. Wong is a tax advisor and financial educator. He can be reached at (480) 706-0177, haroldwong1@yahoo.com, or www.drharoldwong.com.You can find much of his archived research at www.DrWongInvestorGuide.com.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
http://dairylandpeach.com/2015/01/kids-harsh-money-lessons/feed/ 0
3 Financial Must-Dos http://dairylandpeach.com/2015/01/3-financial-must-dos/ http://dairylandpeach.com/2015/01/3-financial-must-dos/#comments Wed, 28 Jan 2015 23:00:03 +0000 http://dairylandpeach.com/?guid=b10c1320633bcab0d8168de5c563a7de Winter is a good time to improve your financial life, making good moves for the rest of the year. Here is a trio of things to get done:

Investigate 401(k) matching contributions from your employer. Most 401(k) plans provide for employer matching contributions, often around 5% of your pay, though percentages can vary.

The match consists of your employer contributing a certain dollar amount to your 401(k) account based on the sum you contribute. Let’s say your plan has a dollar-for-dollar employer match up to $1,500. For every dollar you contribute to your account, your employer will also kick in the same amount. Once you contribute the whole $1,500, your employer stops contributing.

Think about it: You and your employer both put in $1,500 and now your 401(k) account is worth $3,000 more – half of it free money from your employer. Plans differ widely; check with your human resources department or supervisor to determine your company’s matches.

Start a savings account. Problems putting money aside? One good solution: Have a set amount automatically taken from your paycheck and deposited into a separate account, such as a savings, money market (MMA) or mutual fund account. MMAs and mutual fund accounts often require higher opening balances but pay more interest.

Start slow, socking away $25, $50 or $100 each month. Double the amount after about six months. If you deposit $25 a month and double it in half a year to $50 a month, by this time next year you will have $450 extra.

Put away $50 a month, double it to $100 in half a year and after 12 months you sock away $900. Start with $100 a month and double in six months and in a year you save $1,800. You get the idea.

Another option might be an online savings account, easy to establish and link to your checking account for movement back and forth. Some carry no fees or minimum balance, and they also tend to pay slightly more interest than the types of accounts above.

Track expenses. Not sure what you and your family spend? Having trouble staying on those day-to-day budgets? Try this over four days:

Taking no more than 30 minutes, write down all your monthly fixed expenses such as mortgage or rent, internet access fees and car payments. Include what dollar amount you spent on each. Do this first step from your memory and put your list aside for a day.

On the second day, again in no more than 30 minutes, look through your checkbook and see what monthly expenses you forgot to write down and correct any amounts you misquoted. Add in monthly variable expenses, such as clothing, groceries, car maintenance and fuel, as well as utilities such as electricity, gas, oil and water.

Once again in just half an hour, pull out your credit card bills on the third day and come to terms with what and how much you charge and still owe. Note all finance charges and late fees. Finally, on the last day pull all your expenses together.

Any revelations? At this point, you have good information and the perfect chance to improve your spending habits.

Follow AdviceIQ on Twitter at @adviceiq.

Kimberly J. Howard, CFP, CRPC, ADPA, is a Certified Financial Planner and the owner of KJH Financial Services, a Fee-Only practice located in Newton, Mass. and Denver (781-413-4879). Please visit us at www.kjhfinancialservices.com or email Kim at kim@kjhfinancialservices.com. Follow on Twitter at @kimhowardcfp.
 
AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
Winter is a good time to improve your financial life, making good moves for the rest of the year. Here is a trio of things to get done:

Investigate 401(k) matching contributions from your employer. Most 401(k) plans provide for employer matching contributions, often around 5% of your pay, though percentages can vary.

The match consists of your employer contributing a certain dollar amount to your 401(k) account based on the sum you contribute. Let’s say your plan has a dollar-for-dollar employer match up to $1,500. For every dollar you contribute to your account, your employer will also kick in the same amount. Once you contribute the whole $1,500, your employer stops contributing.

Think about it: You and your employer both put in $1,500 and now your 401(k) account is worth $3,000 more – half of it free money from your employer. Plans differ widely; check with your human resources department or supervisor to determine your company’s matches.

Start a savings account. Problems putting money aside? One good solution: Have a set amount automatically taken from your paycheck and deposited into a separate account, such as a savings, money market (MMA) or mutual fund account. MMAs and mutual fund accounts often require higher opening balances but pay more interest.

Start slow, socking away $25, $50 or $100 each month. Double the amount after about six months. If you deposit $25 a month and double it in half a year to $50 a month, by this time next year you will have $450 extra.

Put away $50 a month, double it to $100 in half a year and after 12 months you sock away $900. Start with $100 a month and double in six months and in a year you save $1,800. You get the idea.

Another option might be an online savings account, easy to establish and link to your checking account for movement back and forth. Some carry no fees or minimum balance, and they also tend to pay slightly more interest than the types of accounts above.

Track expenses. Not sure what you and your family spend? Having trouble staying on those day-to-day budgets? Try this over four days:

Taking no more than 30 minutes, write down all your monthly fixed expenses such as mortgage or rent, internet access fees and car payments. Include what dollar amount you spent on each. Do this first step from your memory and put your list aside for a day.

On the second day, again in no more than 30 minutes, look through your checkbook and see what monthly expenses you forgot to write down and correct any amounts you misquoted. Add in monthly variable expenses, such as clothing, groceries, car maintenance and fuel, as well as utilities such as electricity, gas, oil and water.

Once again in just half an hour, pull out your credit card bills on the third day and come to terms with what and how much you charge and still owe. Note all finance charges and late fees. Finally, on the last day pull all your expenses together.

Any revelations? At this point, you have good information and the perfect chance to improve your spending habits.

Follow AdviceIQ on Twitter at @adviceiq.

Kimberly J. Howard, CFP, CRPC, ADPA, is a Certified Financial Planner and the owner of KJH Financial Services, a Fee-Only practice located in Newton, Mass. and Denver (781-413-4879). Please visit us at www.kjhfinancialservices.com or email Kim at kim@kjhfinancialservices.com. Follow on Twitter at @kimhowardcfp.
 
AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
http://dairylandpeach.com/2015/01/3-financial-must-dos/feed/ 0
Elaine Vanselow, 77 http://dairylandpeach.com/2015/01/elaine-vanselow-77/ http://dairylandpeach.com/2015/01/elaine-vanselow-77/#comments Wed, 28 Jan 2015 19:03:24 +0000 http://dairylandpeach.com/?p=19224 Elaine   Vanselow, 77

Funeral Services will be at 11 am, Friday, January 30, 2015 at Trinity Lutheran Church, Long Prairie for Elaine E. Vanselow, age 77, who died Monday, January 26, 2015 at the Little Falls Care Center. Rev. Noah Wehrspann will officiate and burial will be in the Trinity Lutheran Cemetery, Long Prairie. Friends may call from 5-7 pm Thursday, January 29, 2015 at the Williams Dingmann Family Funeral Home – Stein Chapel, Long Prairie and one hour prior to services at the church on Friday.
Elaine Emma Vanselow was born September 5, 1937 in Long Prairie, Minnesota the daughter of Walter and Esther (Voges) Vanselow. She grew up and attended country school in Long Prairie Township. She remained on the farm and helped her parents. In 1993 she and her father moved into Prairie View Manor in Long Prairie.
Elaine was a member of Trinity Lutheran Church. She enjoyed flower gardening, music, and most of all her animals on the farm. As a young woman, she learned how to play the accordion.
Elaine is survived by her special cousin, Gloria (Milan) Vano, Long Prairie; sister-in-law, Freda Vanselow, Sauk Centre; nephews, William Vanselow and David Vanselow, and niece Mary Kay Middendorf. She is also survived by many cousins.
She was preceded in death by her parents, and brother, Arvin.
Pallbearers will be Harvey Sadlovsky, David Vanselow, Tom Kroll, Tom Gray, Kent Schultz, and Rick Hanson.
Obituary and on-line guestbook available at www.williamsdingmann.com.

]]>
http://dairylandpeach.com/2015/01/elaine-vanselow-77/feed/ 0
Dollar’s Rise: a Good Sign http://dairylandpeach.com/2015/01/dollars-rise-a-good-sign/ http://dairylandpeach.com/2015/01/dollars-rise-a-good-sign/#comments Wed, 28 Jan 2015 17:00:01 +0000 http://dairylandpeach.com/?guid=00f6594d019be687cd70edd2a24ea9f2 The dollar serves as an excellent prognosticator for the U.S. economy. Its remarkable strengthening lately serves as very positive signal. With the help of low interest rates and an improving economy, the dollar’s dominance should continue for a good while.

In late 2007 with a weak dollar it took roughly $1.57 to buy a euro. Now with a stronger dollar, it only takes a little less than $1.14 to buy one euro. Economic trends are cyclical, and we are in a cycle of dollar strengthening as foreign central banks weaken currencies to attack economic ills. What does that tell you as an investor?

As a dedicated traveler, this writer recalls the pain when the euro was north of $1.50. Europe was expensive. U.S. national parks and ski resorts were full of European tourists as America, even with airfare thrown in, was on sale.

Now the dollar buys more all over the world. That’s good news if you are planning a bucket list trip abroad. Pundits see the euro dropping further. Goldman Sachs predicts parity to the dollar by 2017, a level not seen since 2002 when the euro debuted. What’s behind these moves?

The global credit crunch, which induced recession and the 2008 market crash, introduced a new term to investors – quantitative easing (QE). In response to the financial crisis, Federal Reserve Chairman Ben Bernanke sought to stimulate lending and economic activity by depressing interest rates. He also “created money,” by buying mortgage bonds and government bonds.

By July 2012, the benchmark 10-year Treasury note rate hit a multi-decade low of 1.38%. After trending upward a bit, the 10-year has headed back down again, lately hitting 1.83%. Lower interest rates decrease the cost of government and consumer borrowing, and supposedly prod businesses and households to invest. QE can boost asset prices like stocks and real estate, something Bernanke wanted to bolster confidence.

When central banks engage in QE and other forms of stimulus, including money creation, currency weakens. The Fed has ended QE, signaling that policy will return to normal at some point, perhaps this year with an increase in interest rates. The Kiplinger newsletter sees the 10-year Treasury rate at 3.1% by yearend 2015.

Central banks also use QE to boost inflationary expectations. The theory is that, if consumers expect money to be worth less in the future, they will buy now and boost demand. Low interest rates penalize savers, and reward borrowers and spenders. The U.S. Fed has set 2% as an inflation target. Kiplinger forecasts inflation at 2% by the end of 2015, with gross domestic product growth at over 3% annually.

The current Fed chairwoman, Janet Yellen, will not surprise markets with rapid interest rate boosts in 2015. Trained as a labor economist, she watches wages and unemployment and underemployment as an indicator. Job numbers are improving, but wage growth remains weak. Combined with lower gas prices, consumer spending should get a boost.

But with too many people in part-time jobs and a dearth of full-time opportunities, labor force participation rates remain low at levels not seen since the late 1970s, increasing Yellen’s cautious approach.

On the surface, America is the shining star in the global economic sky, reflected in rising stock prices. Yet when governments in other economies apply stimulus, that signals the beginning of a recovery cycle. Investors who bought stock and selected real estate in 2009-2011 as the U.S. central bank applied stimulus were financially prescient and have profited.

Increased volatility notwithstanding, don’t abandon global asset allocations. As bankers in Europe, Japan, China and elsewhere depreciate currency and apply stimulus, sharp-eyed money managers are trolling for bargains. Bargain seekers also are eying depressed natural resource stocks relative to the next cycle. Money goes where it is best treated, and the U.S. stock market still is the deepest and most liquid on the planet.

Even with wage growth, inflation is not likely to accelerate near term over Federal Reserve targets. With bargain conscious consumers armed with smartphones trolling for bargains, it is difficult for companies to raise prices. Black Friday saw increased competition from Cyber Monday.

Lending has been anemic in the U.S. but that is changing. Commercial and industrial lending is picking up—a positive. In short, equity investors should retain a good balance between American and international equities. And plan that long-delayed trip to Europe. A good house wine in France (cuvée du patron), Italy (vino della casa) or Spain (vino de la casa) is a much better deal than it was not long ago. Santé.

Follow AdviceIQ on Twitter at @adviceiq

Lewis Walker, CFP, is president of Walker Capital Management, LCC in Peachtree Corners, Ga. Securities and certain advisory services offered through The Strategic Financial Alliance Inc. (SFA). Lewis Walker is a registered representative of The SFA, which is otherwise unaffiliated with Walker Capital Management. 770-441-2603. lewisw@theinvestmentcoach.com.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
The dollar serves as an excellent prognosticator for the U.S. economy. Its remarkable strengthening lately serves as very positive signal. With the help of low interest rates and an improving economy, the dollar’s dominance should continue for a good while.

In late 2007 with a weak dollar it took roughly $1.57 to buy a euro. Now with a stronger dollar, it only takes a little less than $1.14 to buy one euro. Economic trends are cyclical, and we are in a cycle of dollar strengthening as foreign central banks weaken currencies to attack economic ills. What does that tell you as an investor?

As a dedicated traveler, this writer recalls the pain when the euro was north of $1.50. Europe was expensive. U.S. national parks and ski resorts were full of European tourists as America, even with airfare thrown in, was on sale.

Now the dollar buys more all over the world. That’s good news if you are planning a bucket list trip abroad. Pundits see the euro dropping further. Goldman Sachs predicts parity to the dollar by 2017, a level not seen since 2002 when the euro debuted. What’s behind these moves?

The global credit crunch, which induced recession and the 2008 market crash, introduced a new term to investors – quantitative easing (QE). In response to the financial crisis, Federal Reserve Chairman Ben Bernanke sought to stimulate lending and economic activity by depressing interest rates. He also “created money,” by buying mortgage bonds and government bonds.

By July 2012, the benchmark 10-year Treasury note rate hit a multi-decade low of 1.38%. After trending upward a bit, the 10-year has headed back down again, lately hitting 1.83%. Lower interest rates decrease the cost of government and consumer borrowing, and supposedly prod businesses and households to invest. QE can boost asset prices like stocks and real estate, something Bernanke wanted to bolster confidence.

When central banks engage in QE and other forms of stimulus, including money creation, currency weakens. The Fed has ended QE, signaling that policy will return to normal at some point, perhaps this year with an increase in interest rates. The Kiplinger newsletter sees the 10-year Treasury rate at 3.1% by yearend 2015.

Central banks also use QE to boost inflationary expectations. The theory is that, if consumers expect money to be worth less in the future, they will buy now and boost demand. Low interest rates penalize savers, and reward borrowers and spenders. The U.S. Fed has set 2% as an inflation target. Kiplinger forecasts inflation at 2% by the end of 2015, with gross domestic product growth at over 3% annually.

The current Fed chairwoman, Janet Yellen, will not surprise markets with rapid interest rate boosts in 2015. Trained as a labor economist, she watches wages and unemployment and underemployment as an indicator. Job numbers are improving, but wage growth remains weak. Combined with lower gas prices, consumer spending should get a boost.

But with too many people in part-time jobs and a dearth of full-time opportunities, labor force participation rates remain low at levels not seen since the late 1970s, increasing Yellen’s cautious approach.

On the surface, America is the shining star in the global economic sky, reflected in rising stock prices. Yet when governments in other economies apply stimulus, that signals the beginning of a recovery cycle. Investors who bought stock and selected real estate in 2009-2011 as the U.S. central bank applied stimulus were financially prescient and have profited.

Increased volatility notwithstanding, don’t abandon global asset allocations. As bankers in Europe, Japan, China and elsewhere depreciate currency and apply stimulus, sharp-eyed money managers are trolling for bargains. Bargain seekers also are eying depressed natural resource stocks relative to the next cycle. Money goes where it is best treated, and the U.S. stock market still is the deepest and most liquid on the planet.

Even with wage growth, inflation is not likely to accelerate near term over Federal Reserve targets. With bargain conscious consumers armed with smartphones trolling for bargains, it is difficult for companies to raise prices. Black Friday saw increased competition from Cyber Monday.

Lending has been anemic in the U.S. but that is changing. Commercial and industrial lending is picking up—a positive. In short, equity investors should retain a good balance between American and international equities. And plan that long-delayed trip to Europe. A good house wine in France (cuvée du patron), Italy (vino della casa) or Spain (vino de la casa) is a much better deal than it was not long ago. Santé.

Follow AdviceIQ on Twitter at @adviceiq

Lewis Walker, CFP, is president of Walker Capital Management, LCC in Peachtree Corners, Ga. Securities and certain advisory services offered through The Strategic Financial Alliance Inc. (SFA). Lewis Walker is a registered representative of The SFA, which is otherwise unaffiliated with Walker Capital Management. 770-441-2603. lewisw@theinvestmentcoach.com.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
http://dairylandpeach.com/2015/01/dollars-rise-a-good-sign/feed/ 0
What is cold stress, and how can we prevent it in beef cattle? http://dairylandpeach.com/2015/01/what-is-cold-stress-and-how-can-we-prevent-it-in-beef-cattle/ http://dairylandpeach.com/2015/01/what-is-cold-stress-and-how-can-we-prevent-it-in-beef-cattle/#comments Wed, 28 Jan 2015 15:02:08 +0000 http://dairylandpeach.com/?p=19211 BeefCattleWEBBy Emily Wilmes
University of Minnesota Extension

It’s no secret that here in Minnesota the winters can be tough. We just got out of a bad cold snap, but you can be sure that there will be at least one more before we thaw into spring in a couple months. We hear a lot of things about preventing cold stress in livestock. Cold stress can affect any livestock species, and I’d like to spend some time on beef cattle. Although we hear the term “cold stress” all the time, what does it actually mean; what constitutes cold stress in cattle?

Cattle are most comfortable within the thermoneutral zone — when temperatures are neither too warm nor too cold. During the winter months cattle experience cold stress anytime the effective ambient temperature, which takes into account wind chill and humidity, drops below the lower critical temperature. The lower critical temperature is influenced by both environmental and animal factors including hair coat and body condition. Let’s go through four examples of this.

For each example, we are assuming the cattle are in good body condition. In wet conditions or with a summer coat, the lower critical temperature is 59 degrees — so this is when the cattle would start to feel cold stress. However, as cattle have time to develop a sufficient winter coat the estimated lower critical temperature decreases. With a dry fall coat, the lower critical temperature is 45 degrees. With a dry winter coat, cold stress starts at around 32 degrees. Lastly, with a dry, heavy winter coat, cattle’s lower critical temperature is 18 degrees. With good body condition, a good coat, and dry conditions, cattle can stay comfortable to fairly low temperatures.

Now that we’ve covered what cold stress is, how can we manage and even prevent it? The first, and probably most obvious strategy is to protect cattle from adverse weather conditions. Consider natural and man-made structures that can help protect the cattle.

In large pastures keeping cattle dry may prove difficult, but at the very least there should be some sort of windbreak. If you are able to provide man-made structures for your cattle, consider a three-sided shed and/or a windbreak. Keep in mind that wind chill plays a large factor in an animal’s lower critical temperature. Think about how cold you feel after getting out of a pool or lake, and there is even the slightest breeze. Imagine how your cattle feel if they have been snowed on for a few hours and the wind speed is even 10 miles an hour.

Besides protection, there are several nutritional factors to consider with cold stressed cattle. Cold stress increases maintenance energy requirements but does not impact protein, mineral or vitamin requirements. The general rule of thumb is to increase the energy density of the ration by 1% for each degree below the lower critical temperature. One of the ways that cattle respond to cold stress is by increasing voluntary feed intake. The animal’s entire metabolic system increases in activity. Also, the passage rate of roughages through the rumen and digestive tract increases. These changes trigger an increase in appetite and voluntary intake.

Since increased energy and overall feed intake is so important, it’s crucial to keep this increase maintained throughout the cold weather. First, make sure water is available. As feed intake increases, so does water intake. If water availability is restricted, feed intake will be reduced. Next, consider feed availability. If the feed availability is limited, either by snow cover or access to hay feeders, cattle may not have the opportunity to eat as much as their appetite would dictate. Lastly, be careful providing larger amounts of high-concentrate feeds. Rapid diet changes could cause significant digestive upsets. Be sure to practice incremental increase of these feeds to avoid any digestive issues.

Another method to consider when managing cattle for cold stress is to sort off thin cows in order to provide them with more specialized care. By sorting off thinner cows to a separate area, you are able to provide them with a higher-quality ration while eliminating competition from other cows. If you are using lower-quality forages, it’s important to supplement those forages appropriately to meet nutritional requirements. Nutrient requirements go up throughout the third trimester and early lactation, so cows that are thin right now will need a high plane of nutrition to keep up with fetal growth, milk production and winter weather.

Understanding cold stress, and how it affects your cattle, will allow you to better manage your cattle during these winter months. If you have any questions about cold weather management for your livestock, call the Stearns County Extension Office at 320-255-6169, Benton County Extension Office at 320-968-5077, or Morrison County Extension Office at 320-632-0161.

]]>
http://dairylandpeach.com/2015/01/what-is-cold-stress-and-how-can-we-prevent-it-in-beef-cattle/feed/ 0
Mathilda McKenney, 106 http://dairylandpeach.com/2015/01/mathilda-mckenney-106/ http://dairylandpeach.com/2015/01/mathilda-mckenney-106/#comments Wed, 28 Jan 2015 12:11:35 +0000 http://dairylandpeach.com/?p=19209 Mathilda   McKenney, 106

Mathilda I. “Tillie” McKenney, age 106 of St. Rosa, passed away on Monday, January 26, 2015 at the Mother of Mercy Nursing Home in Albany, Minnesota.

A Mass of Christian Burial will be held at 11 a.m. Thursday, January 29 at the St. Rose of Lima Catholic Church in St. Rosa with Rev. Roger Klassen, O.S.B. officiating. Interment will be in the parish cemetery.

Visitation will be held from 10 to 11 a.m. Thursday morning at the church.

Mathilda Ida Wittkop was born September 4, 1908 in Millwood Township, Stearns County, Minnesota to Joseph and Mary (Knabel) Wittkop. She married Roy McKenney on September 20, 1937 at St. Rose of Lima Catholic Church in St. Rosa. After marriage the couple lived near St. Rosa then retired at Birch Lake. Mathilda moved to Rose Manor in 1984 and then to Mother of Mercy Nursing Home in Albany in 2001. She was a member of St. Rose of Lima Catholic Church in St. Rosa, Christian Mothers, St. Elizabeth Society, St. Francis Mission Group, Melrose Senior Citizens, and the Schanhaar-Otte VFW Post 7050 Auxiliary. Mathilda enjoyed gardening, cooking, playing cards, and fishing.

Survivors include her many nieces and nephews.

Mathilda was preceded in death by her parents; husband, Roy McKenney on December 11, 1968; brothers and sisters, Jeanette Wilwerding, Larry Wittkop, Virgil Wittkop, Henry Wittkop, Theresa Blommel, Marie Cismowski, Rose Westbrock, Hilda Wittkop, and Joe Wittkop.

Serving as casket bearers will be Cathy Sand, Beth Mayleben, Daniel Atkinson, Mark Atkinson, Joe Wilwerding, and Jerry Wilwerding. Cross bearer will be Barbara Hellermann and scripture bearer will be Laura Gobel.

Arrangements were made with Patton-Schad Funeral & Cremation Services of Melrose.

]]>
http://dairylandpeach.com/2015/01/mathilda-mckenney-106/feed/ 0
Market Correction: 5 Moves http://dairylandpeach.com/2015/01/market-correction-5-moves/ http://dairylandpeach.com/2015/01/market-correction-5-moves/#comments Tue, 27 Jan 2015 23:30:02 +0000 http://dairylandpeach.com/?guid=7741feaaaf1257a6d0054b89cfee750c Despite a good 2014, the stock market went through some tough days. At one point in October the Standard & Poor’s 500 was down about 8% from its all-time high reached just a month before, then a few weeks later rebounded to set records.

Such downdrafts will come again. While we are not now in correction mode – generally defined as a 10% or greater drop in an index – does such yo-yoing portend a market correction, and what can you do to prepare?

1. Do nothing. Assuming you have in place a financial plan with an investment strategy, you really need do nothing when a correction occurs. Ideally, you rebalanced your portfolio along the way, and put your asset allocation largely in line with your plan and your risk tolerance.

Making moves in reaction to a market correction (official or otherwise) is rarely a good idea. At the very least, wait until after the big plunge is over.

As quarterback Aaron Rodgers told the fans in Green Bay after the Packers 1-2 start: Relax. The team then racked up a 12-4 season and came within one victory of the Super Bowl.

2. Review your mutual funds. Rough markets are good times to look at various mutual funds and exchange-traded funds in your portfolio. How did they hold up compared with similar investments during the market downturn? When the market changed direction?

For example, during the 2008-2009 market rollercoaster, I looked at funds to see how they did in both the down market of 2008 and in the up market of 2009. If a fund did worse than the majority of its peers in 2008, I expected better-than-average performance the next year. Underperformance during both periods was a huge red flag.

3. Don’t get caught up in media hype. If you watch financial news outlets long enough, you will unfailingly find some expert to support about any opinion about the stock market during any type of rally or dip. This can be especially dangerous for investors who might already feel afraid when markets tank, however slightly.

I don’t discount the great and useful information the media provide, but take much of it with some skepticism. Instead, lean on your financial plan and your investment strategy as a guide during market turbulence.

4. Focus on risk. Use stock market corrections and downturns to assess your portfolio’s risk and, more importantly, your own tolerance for risk.

Assess whether your portfolio held up in line with your expectations. If not, perhaps you take more risk than you planned (whether aware of doing so or not). Also assess your feelings about your portfolio’s performance: If you find yourself unduly fearful about the recent market moves, consider revisiting your allocation and your financial plan once Wall Street settles down.

5. Look for bargains. If you eyed a particular stock, ETF or mutual fund before the market drop, this might be the time to make an investment. I don’t advocate market timing – but snagging a good long-term investment makes an even better deal when that investment is on sale.

Don’t believe me? Then believe investing guru Warren Buffett’s championing of buying low.

Markets always correct at some point. Smart investors factor this into plans and don’t overreact. Be a smart investor.

Follow AdviceIQ on Twitter at @adviceiq.

Roger Wohlner, is a fee-only financial adviser based in Arlington Heights, Ill., where he provides financial planning and investment advice to individual clients, 401(k) plan sponsors and participants, foundations, and endowments. Please feel free to contact him with your investing and financial planning questions. Roger is active on both Twitter and LinkedIn. Check out Roger’s popular blog The Chicago Financial Planner where he writes about issues concerning financial planning, investments, and retirement plans. He is also a regular contributor to Investopedia, has written for US News Smarter Investor Blog and has been quoted extensively in the financial press including The Wall Street Journal, Forbes and Smart Money. Roger is a member of NAPFA, the largest professional organization for fee-only financial advisors in the country. All NAPFA Registered Advisors sign a fiduciary oath promising to act in the best interests of their clients.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
Despite a good 2014, the stock market went through some tough days. At one point in October the Standard & Poor’s 500 was down about 8% from its all-time high reached just a month before, then a few weeks later rebounded to set records.

Such downdrafts will come again. While we are not now in correction mode – generally defined as a 10% or greater drop in an index – does such yo-yoing portend a market correction, and what can you do to prepare?

1. Do nothing. Assuming you have in place a financial plan with an investment strategy, you really need do nothing when a correction occurs. Ideally, you rebalanced your portfolio along the way, and put your asset allocation largely in line with your plan and your risk tolerance.

Making moves in reaction to a market correction (official or otherwise) is rarely a good idea. At the very least, wait until after the big plunge is over.

As quarterback Aaron Rodgers told the fans in Green Bay after the Packers 1-2 start: Relax. The team then racked up a 12-4 season and came within one victory of the Super Bowl.

2. Review your mutual funds. Rough markets are good times to look at various mutual funds and exchange-traded funds in your portfolio. How did they hold up compared with similar investments during the market downturn? When the market changed direction?

For example, during the 2008-2009 market rollercoaster, I looked at funds to see how they did in both the down market of 2008 and in the up market of 2009. If a fund did worse than the majority of its peers in 2008, I expected better-than-average performance the next year. Underperformance during both periods was a huge red flag.

3. Don’t get caught up in media hype. If you watch financial news outlets long enough, you will unfailingly find some expert to support about any opinion about the stock market during any type of rally or dip. This can be especially dangerous for investors who might already feel afraid when markets tank, however slightly.

I don’t discount the great and useful information the media provide, but take much of it with some skepticism. Instead, lean on your financial plan and your investment strategy as a guide during market turbulence.

4. Focus on risk. Use stock market corrections and downturns to assess your portfolio’s risk and, more importantly, your own tolerance for risk.

Assess whether your portfolio held up in line with your expectations. If not, perhaps you take more risk than you planned (whether aware of doing so or not). Also assess your feelings about your portfolio’s performance: If you find yourself unduly fearful about the recent market moves, consider revisiting your allocation and your financial plan once Wall Street settles down.

5. Look for bargains. If you eyed a particular stock, ETF or mutual fund before the market drop, this might be the time to make an investment. I don’t advocate market timing – but snagging a good long-term investment makes an even better deal when that investment is on sale.

Don’t believe me? Then believe investing guru Warren Buffett’s championing of buying low.

Markets always correct at some point. Smart investors factor this into plans and don’t overreact. Be a smart investor.

Follow AdviceIQ on Twitter at @adviceiq.

Roger Wohlner, is a fee-only financial adviser based in Arlington Heights, Ill., where he provides financial planning and investment advice to individual clients, 401(k) plan sponsors and participants, foundations, and endowments. Please feel free to contact him with your investing and financial planning questions. Roger is active on both Twitter and LinkedIn. Check out Roger’s popular blog The Chicago Financial Planner where he writes about issues concerning financial planning, investments, and retirement plans. He is also a regular contributor to Investopedia, has written for US News Smarter Investor Blog and has been quoted extensively in the financial press including The Wall Street Journal, Forbes and Smart Money. Roger is a member of NAPFA, the largest professional organization for fee-only financial advisors in the country. All NAPFA Registered Advisors sign a fiduciary oath promising to act in the best interests of their clients.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

]]>
http://dairylandpeach.com/2015/01/market-correction-5-moves/feed/ 0