Internet and Social Media Risk

Internet and Social Media Risk

by guest writer Brian Boak, Private Client Risk Manager, P & C

The rapid integration of digital technologies into everyday life continues to create new risks and challenges that many individuals and families frequently overlook or do not yet fully appreciate.

Take these two technological developments: Smartphones and the Internet of Things (IoT). While smartphone and mobile technology as a whole has put the Internet at the fingertips of a greater number of people worldwide, it also has allowed the development of millions of applications that collect and store large quantities of personal data that could easily fall into the wrong hands. Today's mobile users not only have to contend with the unsafe data collection of certain mobile apps, but they must also be on guard for hackers who have developed fraudulent versions of popular apps designed to steal personal data, such as credit card information.

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Heron Wealth Mid-Year Commentary & Panel Discussion with Liz Clayman - Asset.TV

Heron Wealth Mid-Year Commentary & Panel Discussion with Liz Clayman - Asset.TV

In June, US stocks reversed May’s 6.4% decline and rallied 7% to new all time highs, with the S&P 500 up 18.5% on the year. Half the gain is a reversal of the 5.0% decline in 2018, while the rest is a full year’s gain delivered in 6 months.

World markets in general are having a good year, and US bonds have rallied substantially since January. Full report here:

Regrettably, once again we have that “walking on thin ice” sensation, which we had prior to last fall’s near 20% correction.

David Edwards appeared on a panel discussion recently to discuss his outlook for the rest of the year.

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Trump Tariffs Raise Recession Worries

Trump Tariffs Raise Recession Worries

After 6 months of steady gains that took the NASDAQ and S&P 500 to new record highs in late April , we’ve had two and half weeks of sharp declines.  Peak to yesterday’s trough was 5% in the S&P 500 and 7% in the NASDAQ.  Stocks are recovering somewhat today. YTD the S&P 500 is up 14.5% and the NASDAQ is up 17.3%.  Several clients have called or emailed to learn if there is reason for concern.

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After the Worst Week, Month, Quarter and Year in Over a Decade, Why Are We Suddenly Bullish on Stocks?

After the Worst Week, Month, Quarter and Year in Over a Decade, Why Are We Suddenly Bullish on Stocks?

A long time client writes, “No capital gifts this year. Seeing a Dow that is falling like a stone, day after day, does not inspire me. It is acting like 2008 and the economy could not be more polar opposite from 2008.”

Exactly! Yet, US and international stock market performance is the worst since 11 years ago during the 2008-9 financial crisis.

What we are doing right now?

  1. Any client that depends on their portfolio for their monthly draw will receive their regular payout January 2nd and throughout 2019. Clients with draws have a year’s worth of cash in money market securities, and 4 years of cash in bonds. These clients can survive a 5 year drought in equity market returns without a negative impact on their lifestyle, just as we saw back in 2008-9

  2. We are not selling ANYTHING this week. About 4 weeks ago, we harvested tax losses in any households with at least $50K in realized gains so far in 2018. Those funds are sitting in cash, and will be reinvested shortly as soon as the “wash sale” period expires.

  3. We also decided to eliminate the 5% allocation to commodities (oil and gas, metals, foodstuffs) that we have maintained for many years. Commodity prices could not stay up when the world economy was booming due to ever more efficient production, and with the world in a slump, prices only look down for a while. Those funds are still in cash.

  4. Of the many families who came on board since June, our general plan was to invest 1/3 of their stock allocation immediately, 1/3 if prices declined 10% and the remaining 1/3 if stock prices declined 20%. If prices did not decline, we would just scale in after 6 and 12 months. Following this plan we invested a lot of money on December 3rd, thinking stocks were already 5% undervalued and that the traditional “Santa” rally would soon be upon us. However, as December progressed, investors following events in Washington freaked out and dumped stocks wholesale.

  5. For clients whose retirement is still a few years in the future, don’t worry. Our “all-weather” investment strategy assumes that bear markets can and will occur, and yet your retirement will be fine. Indeed, if you have cash on the sidelines, now is a great time to put that cash to work

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How To Manage Sudden Wealth

How To Manage Sudden Wealth

At any given time in your life you may find yourself with a sudden windfall. Perhaps you've inherited money or a stock portfolio after a relative passed away. Or maybe you have built a successful business over the years that you were able to sell. So what to do with all that money? Read on to find out more.

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If the US Economy Is Doing So Well, Why Is the Stock Market Doing So Badly?

If the US Economy Is Doing So Well, Why Is the Stock Market Doing So Badly?

A new client writes, “So . . . why should I not sell all the stocks I still have a profit in?”  

That is a reasonable question.  From the September 20th all-time high, the major averages have taken quite a pounding.  

The S&P 500 is down 10.5% from its record high, while the NASDAQ is down 14.7%.  The FAANG stocks are in bear market territory, down an average of 22.5%.

How can this be, when the US economy is doing so well?  For example, Consumer Confidence is at the highest level since right before the 9/11 terrorist attack, and at the second highest level since measurements began in 1967.

Business confidence is at the highest level since 1983.

The US Unemployment rate is at the lowest level since 1968, with a record 157 million Americans employed full-time.  The participation rate, at 62.9%, remains below the record level of 67.2%, which prevailed around 2000, which means that at least 10 million additional Americans could be working, but are not.  Despite relatively stagnant wage gains, US Real Median Household income is at a record $62K/year.

Company earnings for Q3 2018 were up 25.6% on an 8.4% increase of revenues (a record level.)  79% of companies beat estimates.  Thanks to the tax cut, US corporations are swamped with cash and have already used $1 trillion to buy back stock.

So nothing but good news, right?  Yet this is the second time this year we’ve seen a 10% or more sell off.  What do stock traders know that average Americans don’t know?

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Is this a sound investment, or one that should be avoided?

Is this a sound investment, or one that should be avoided?

A friend approached me with an investment opportunity and I would like to know if it sounds legitimate.  It involves investing in a company that engages in proprietary trading of international currency, by being a lender to the company.  The company guarantees 12 percent or 25 percent of the spread, whichever is greater. As a lender, you are given a 90-day perpetual note that automatically renews.  If you choose, you can call in the note at any time, at which time it reverts to a 90-day note. At the end of 90 days you can get all of your money back.  If you want to, you can take out any interest you've earned each month. You can view how much interest has been deposited into your account on a daily and monthly basis.   You can also participate by rolling over existing IRA accounts to a self-directed IRA company. The trading company is regarded as an institutional account and is approved by the IRA company.  If you choose, you can have the monthly interest you earn sent back to your account at the IRA company to make other investments.  Does this sound like a legitimate investment opportunity?

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Four Questions To Ask A Financial Adviser Before Hiring Them

Four Questions To Ask A Financial Adviser Before Hiring Them

You've made the decision to whip your financial life into shape and work with a wealth advisor to achieve your goals. Now all you need to do is find a trustworthy advisor who has your best interest at heart. Read on for the four questions to ask before hiring a financial advisor.

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How To Deal With A Turbulent Stock Market

How To Deal With A Turbulent Stock Market

Timing the market is not a smart strategy for the average investor. Read on to find out why and also learn about three alternative approaches to investing which will hopefully prevent you from pulling your money out of the market in a panic - which is never a good idea.

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Elf on the Engine Block – an Allegorical Explanation of Market Movements

Elf on the Engine Block – an Allegorical Explanation of Market Movements

We often use this analogy to explain market movements. The stock market is like a massive truck engine block suspended in the air by thousands of piano wires, swaying gently in the breeze.

There’s an elf standing on the block with cutters snipping wires, sometime on this side, sometimes on that side.

As the support shifts, the engine block may twist or swing. Imbalances may build up and reach a catastrophic tipping point. The block jerks suddenly, wires break en masse, the engine rolls violently, tossing the elf off on his ass.

Eventually the oscillations settle down, a new equilibrium is achieved, the elf climbs back on and starts snipping wires again.

An observer standing at the side knows that the longer the elf snips, the more likely a violent adjustment. But the observer never know exactly which severed wire will exceed the tipping point.

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