Business Report U.S. Home Prices Rise Less-than-Expected in August: S&P/Case Shiller

U.S. single-family home prices rose in August on a year-over-year basis but fell short of expectations, a closely watched survey said on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 5.6 percent in August over last year, the slowest year-on-year increase since November 2012, slightly below a Reuters poll of economists that forecast a gain of 5.8 percent.

On a seasonally adjusted monthly basis, prices in the 20 cities dipped 0.1 percent for the month. A Reuters poll of economists had forecast an increase of 0.1 percent.

Non-seasonally adjusted prices rose 0.2 percent in the 20 cities on a monthly basis, disappointing expectations for a 0.5 percent rise.

"The deceleration in home prices continues," David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement.

"Despite the weaker year-over-year numbers, home prices are still showing an overall increase, as the National Index increased for its eighth consecutive month."

A broader measure of national housing market activity that S&P/Case-Shiller is now releasing on a monthly basis rose at a slower pace year over year, coming in at 5.1 percent.

The seasonally adjusted 10-city gauge fell 0.2 percent in August versus a 0.5 percent decline in July, while the non-adjusted 10-city index rose 0.2 percent in August compared to a 0.6 percent rise in July.

(Reporting by Chuck Mikolajczak; Editing by Meredith Mazzilli)

World Business News Dollar’s Ride Is About To End

World Business News Dollar’s Ride Is About To End, the nation of Japan has become a global leader in debt, currency devaluation and inflation.  Unfortunately for the Japanese, Abenomics is also leading Japan into a hyper inflationary depression, as the first of his three arrows has shot right through the yen and put a gaping hole in the wallets of every Japanese citizen. 

The Bank of Japan (BOJ) has placed all its chips on the bet that inflation will cure all the nation’s economic problems. Making deflation public enemy number one is rather convenient when your country's public debt to GDP is the highest in the world. In order to end deflation, the central bank has purchased 70% of all newly-issued Japanese Government Bonds. All this money printing is intended to get prices rising, and it has been very successful. Japan's consumer prices rose 3.1 percent in August from a year earlier.  Prices for fuel, light and water rose 6.4 percent on the year.  But as real wages continue to fall, the bull’s eye appears to be directed on destroying the Japanese middle class.

In the nonsensical world of Abenomics--where inflation is viewed to be the progenitor of growth--the 3.1% CPI reading is deemed to be insufficient. This is because the core rate of 1.1 percent was far shy of the 2% read they are aiming for. So, as expected, there are calls coming from the lobotomized economic experts in Japan for yet more money printing from the BOJ.   

Japan’s “experiment” with Abenomics would be much more interesting if we didn’t already know how it all ends.  This so called experiment of massive debt monetization has already been tried in countries such as Weimar Germany and, more recently, in Zimbabwe; with disastrous results.  The misguided policy of using inflation to create growth is predictably causing asset bubbles in JGBs and stocks. The BOJ is tirelessly printing money to monetize nearly all of the Japanese government’s enormous debt load and also to buy stocks. This has ballooned its equity portfolio alone to be an estimated 7 trillion yen ($63.6 billion).  However, all this has done nothing to boost real GDP, balance trade or boost real wages.  In fact, Industrial production shrank 1.5 percent month-on-month in August and spending among Japanese households fell a steeper-than-expected 4.7 percent. 

Business News Tips for Staging Your Home to Sell

There are a number of tactics you can employ in an effort to sell your home quicker, but one of the top tricks is to stage the house.

“When a seller decides to put their house on the market, they need to recognize that they are now selling a product and that product should be marketed as best as possible,” explained Nicole Rorem of Su Casa Staging. “This is where staging comes in.”

Not only that, says Lori Livers of Interiors by Lori, home buying can be emotional and staging a home can help the buyer feel that connection.

“Buyers purchase the house they are most drawn to — the house they want to make their home,” she said.

Here are five quick tips for staging a home to sell.

Forget about empty

An empty house makes it hard for the new buyer to visualize themselves living there. Empty rooms can also appear smaller than they are, without furniture to provide context to the space.

“We think about placing furniture to make the space feel large, open, functional, warm and inviting,” said Rorem.

Lead the eye

When arranging furniture, make sure it enhances the room’s best features. Don’t block huge windows, or crowd furniture next to a statement fireplace. Often, less furniture is more.

You can even arrange the furniture so it “downplays the negative characteristics, by leading the eye of potential buyers,” says Livers.

Remove personal items and clutter

The easiest thing to do to prep a home for staging is to hide personal decor and accessories.

“Put away all extraneous items like papers, personal bathroom items, pill bottles and personal collections,” said Rorem. “You want buyers to see all the features of the home and fall in love with the space as soon as they walk in. If the house is full of personal items and collections, the buyer may get distracted.”

If you are still living in the home and want to display personal items, store them in a decorative basket during showings.

Create a sense of comfort

Fluffy, luxurious towels in the bathroom and pillows arranged on the couch or bed will give your home a more luxe look and are easy additions to a space. Decorative candles, even when unlit, are a great styling tool and provide a light scent in the room.

Clean

No one wants to tour a dirty house. Cluttered, dusty rooms will be the first thing the buyer notices, rather than the great view your home has, or the convenient open kitchen. Cleanliness matters when selling.

And, if all else fails, call in a professional. Many real estate agents offer staging services, or can connect you to a staging professional that can help you see your home objectively and make changes that a potential buyer will enjoy.

http://www.foxbusiness.com/personal-finance/2014/10/23/quick-tips-for-staging-your-home-to-sell/?intcmp=obnetwork

Upbeat Earnings News on Markets in the Green

U.S. stocks advanced on Friday, as earnings from Microsoft (MSFT) and Procter & Gamble (PG) and easing concerns over the possible spread of Ebola in the United States helped put the S&P on track to snap a four-week losing skid.

Microsoft was up 2 percent at $45.91, after it reported higher-than-expected quarterly revenue while keeping its profit margins largely intact.

Fellow Dow component Procter & Gamble gained 2.7 percent to $85.51 and was also one of the biggest boosts to the S&P 500, after the world's largest household products maker posted quarterly results and said it would split its Duracell battery business into a separate company.

But Amazon (AMZN) plunged 7.5 percent to $289.69 as the biggest drag on both the S&P 500 and Nasdaq 100 after the online retailer's sales projections for the crucial holiday quarter disappointed Wall Street and third-quarter results missed forecasts.

According to Thomson Reuters data through Friday morning, of 205 companies in the S&P 500 that have reported earnings, 69.8 percent have topped analyst's expectations, above the 63 percent rate since 1994 and the 67 percent rate for the past four quarters. On the revenue side, 59.8 percent have beaten expectations, slightly below the 61 percent rate since 2002 but above the 58 percent rate for the past four quarters.

The S&P 500 is up 3.9 percent for the week, putting the index on track for its best week since the start of 2013, boosted largely by solid corporate earnings reports. The benchmark index is down 2.5 percent from its record high set on Sept. 18 after slumping more than 7 percent as volatility has spiked.

Investors continued to monitor developments on the Ebola virus. A doctor who worked in West Africa with Ebola patients was in an isolation unit in New York City after testing positive for the virus, while the World Health Organization set out plans for speeding up development and deployment of experimental Ebola vaccines.

"The management of the Ebola virus has given the market some confidence that they can move forward and focus on what pricing is really predicated upon - earnings and data - and in both cases they have been very constructive," said Peter Kenny, chief market strategist at Clearpool Group in New York.

At 12:18 p.m. Eastern time the Dow Jones industrial average rose 107.6 points, or 0.65 percent, to 16,785.5, the S&P 500 gained 11.73 points, or 0.6 percent, to 1,962.55 and the Nasdaq Composite added 21.88 points, or 0.49 percent, to 4,474.67.

Sales of new U.S. single-family homes rose to a six-year high in September, up 0.2 percent to a seasonally adjusted annual rate of 467,000 units.

The largest percentage gainer on the S&P 500 was Edwards Lifesciences (EW), which rose 12.0 percent, while the largest decliner was Amazon.

On the Nasdaq 100 the largest gainer was KLA-Tencor (KLAC), which rose 7.3 percent, while the largest decliner was Amazon.

Advancing issues outnumbered declining ones on the NYSE by 1,782 to 1,164, for a 1.53-to-1 ratio on the upside; on the Nasdaq, 1,353 issues rose and 1,195 fell for a 1.13-to-1 ratio favoring advancers.

The benchmark S&P 500 index was posting 32 new 52-week highs and 2 new lows; the Nasdaq Composite was recording 40 new highs and 30 new lows. 

(Editing by James Dalgleish, Bernadette Baum and Chris Reese)

http://www.foxbusiness.com/markets/2014/10/24/markets-in-green-on-upbeat-earnings-news/

Why some companies won't mail you privacy policies

You know those privacy statements that come in the mail from financial institutions? The ones that you should read but probably never do? Well, some banks and other financial institutions are liklely to stop sending them to you through the mail soon. Instead, they will make them available online under revised regulations just adopted by the Consumer Financial Protection Bureau.

Until now, financial institutions have been required to provide written copies of privacy notices in separate mailings, on an annual basis. Now, under the new regulations, institutions will be allowed to notify you that a privacy statement is available through other ways, including a notification that could be on your billing statement or in a coupon book.

Under the new rules, institutions can shift to online privacy notices only if the policy hasn’t changed and under certain conditions. The main one is that the institution must not share customers’ nonpublic personal information with unaffiliated third parties. Institutions that do such sharing, initiating a federally mandated opt-out provision, must continue providing printed privacy policies annually. Also, any privacy policy provided online instead of through the mail must use a model disclosure form designed by federal regulators. Finally, the privacy policy must remain posted on the financial institution’s website and be available without requiring customers to log in.

Institutions that do not meet the requirements must continue providing printed copies annually. For customers without Internet access, institutions would be required to mail the annual printed copy within 10 days of receiving a request by phone. Institutions will still be required to notify customers of any changes to their privacy policies as they have before.

The CFPB estimates that the change could save the industry $17 million annually. It hopes those savings will encourage institutions to limit their customer data sharing and adopt the model disclosure, which is designed to make the policies easily understandable.

“Posting privacy notices online will make it easier for consumers to access these important policies, while also making it cheaper for financial institutions to provide disclosures,” the CFPB's director, Richard Cordray, said in a statement.

What to do

Don’t assume your bank or any other financial institution will continue sending a written copy of its privacy policy. Check your billing statement and other communications for notices about how to access the policy online. It’s always a good idea to peruse privacy policies to find how exactly what the institution is doing with your information, although the fact that the policy has been moved online should mean that your data is not being shared with unaffiliated third parties. That’s probably a good thing.

—Anthony Giorgianni

Copyright © 2005-2014 Consumers Union of U.S., Inc. No reproduction, in whole or in part, without written permission. Consumer Reports has no relationship with any advertisers on this site.

Insurance Mistakes : Five Costly Home owners

Your home is where your heart is, but it can also cost you unnecessarily if you are making bad moves when it comes to your homeowner’s insurance.

While not having enough coverage is a costly mistake, particularly if your house burned to the ground, there are things you may be doing that make your premiums higher than your neighbor down the block.

With that in mind, here’s a look at five mistakes insurance experts say will cost you more each month.

Accepting the status quo:

We shop around when buying an appliance, purchasing a car or even spending for a new dress but when it comes to homeowner’s insurance people often stick with the coverage they have each year. “One of the things people don’t do is true comparison shopping,” says Keith Moore, Chief Executive of CoverHound, the insurance Website. “If you never shop the rate I guarantee you are paying more than you should.” According to Moore homeowners should shop their policy on an annual basis.

Making upgrades and forgetting about it:

Upgrading your kitchen, installing high-end fixtures and otherwise improving your house will undoubtedly make you happy but it can cost you if you forget to upgrade your insurance along with it. “Often major upgrades like gourmet kitchens or glamour baths not only improve the aesthetics and livability of your home, but they increase the value,” says Richard Hutchinson, general manager of Progressive Home Advantage. “Consequently, the cost to replace these items also increases if you’re faced with a total loss.”  What’s more, Progressive says features such as pools, hot tubs or trampolines could leave you more vulnerable to lawsuits, thus increasing the amount you pay each month to protect your home.

Having a low credit score:

You may not think a low credit score matters when it comes to homeowner’s insurance, but it does and in some cases it matters a lot. According to Moore, in every state except California your credit score can drive up the price of your homeowner’s insurance. “There’s a direct correlation between someone with a low credit score and the frequency of claims,” says Moore. “Someone with a credit score of 500 not only lets bills slip but also the general maintenance of the home, which leads to claims.”

Setting too low of a deductible:

Nobody wants to be hit with a high deductible when something goes wrong, but setting the amount you have to meet before the insurance kicks in at too low of an amount could end up costing you more. According to Laura Adams, senior analyst for insuranceQuotes.com, if you set your deductible too low it almost encourages you to make more claims than if you had a high deductible to meet. “One claim on your policy can cause your rate to rise on average 9%,” says Adams. “In some states we’ve seen a 32% rate in increase just from making one homeowner’s claim.” If you set the deductible high it forces you to avoid making any frivolous claims and seeing your premiums go up long after the repair is made.

Letting discounts expire:

One of the good things about homeowner’s insurance is that the carriers give you a lot of discounts. For instance you can get a discount for having your auto insurance with the same carrier, for not smoking or for being a retiree. Even living in a gated community will get you a break on your insurance. While most people are trained to ask about all the discounts upfront, they fail to follow through once their discount expires to get a new ones. According to Moore some discounts can last as long as five years, like the new homeowner discount, while others are only in effect for two years. Staying on top of when the discounts expire and getting new ones can go a long way in saving you money each month.  “You should ask when they expire and rates go up and shop around again,” he says.

Paid Off $50K of Debt in Less Than 3 Years

Graduating from college debt-free feels really good. When Ja’Net Adams got her degree from South Carolina State in 2003, she was one of those fortunate students who started her adult life without debt, and things went along really well for her.

She got married. They bought a house. They bought a new car. They had their first child. Then, in 2008, she lost her job.

Adams and her husband sat down to assess their financial situation, and they had to face a harsh reality: They had just lost nearly 75% of their household income, and they were $50,000 in debt.

“I’m a warning sign to people of what can happen after graduation,” Adams said. She always considered herself a financially conscientious person, but their debt came down to some misunderstandings and a couple of bad decisions.

Rather than focusing on the past, Adams and her husband immediately changed their habits so they could work toward a financially stable future. This time, when they sat down to figure out their debt, they also made what Adams calls a “Dream Sheet,” a list of their short-, medium- and long-term goals, as motivation for sticking to tough changes they needed to make.

They tracked their spending for two weeks — everything, down to a pack of gum at a gas station — before reconvening and figuring out where to cut expenses.

It was easy to decide, even though it would be an extreme adjustment: No eating out. Get rid of cable. Reduce the minutes on the cellphone plan.

After about five months, she was working again, which was a serious improvement on their income of unemployment benefits and her husband’s starting salary as a teacher. They also started working side jobs: Both went to college on athletic scholarships (tennis for her, basketball for him), so they made money coaching kids.

It took only 2 1/2 years from the point Adams lost her job for them to pay off the student and auto loans.

What She Learned

Adams, now 33, attended college on a tennis scholarship, and she thought her husband (they’re high school sweethearts) was also free of student loan debt because of his basketball scholarship. It was only after they got married that she learned that he had $25,000 in federal student loan debt. They made the payments without issue, but looking back, Adams said they should have communicated and attacked the debt more aggressively.

Instead, they traded in one of their vehicles and got a new car for $25,000.

“We could have given that money to the student loan payment,” Adams said she realized later. “We could be further along financially if we hadn’t made those mistakes.”

The other mistake? Building a home with a no-money-down mortgage. They could have saved a lot of money by staying in their $800-a-month apartment (two bedrooms, two bathrooms, utilities and cable included), rather than taking on a home loan with private mortgage insurance (not to mention the student and auto loan debt they could have tackled with their savings).

Even though they never had trouble making their loan payments, Adams said they could have been smarter about their finances, and they could have more in savings by now. Still, she’s happy they turned things around when they did.

“I’m thankful for losing that job, because it set me on the path to where I am today,” Adams said. She now owns her own financial consulting business, and she speaks to college students all over the U.S. and Canada about money and debt. She just wrote a book — “Debt Sucks!” — geared toward young adults. She may be thankful she lost her job, but the experience was “hard and devastating,” she said. That’s why she wants to educate others.

Going Forward Without Debt

Adams considers her family debt-free, even though they still have mortgage payments. At the time of her pivotal unemployment, she had just gotten back from maternity leave, and she made a vow to herself that her next child wouldn’t be born into debt. She was able to reach that goal, as well as a few others.

They have revised their original Dream Sheet (which they laminated and keep on the refrigerator, as a reminder of what they’re trying to achieve through their sacrifices), and right now Adams and her husband are working to pay off their house in the next 10 years, as well as save so their children can go to college and graduate debt-free. One of their previous goals on the Dream Sheet was to build a savings account for their oldest son, and as he turns 7 this month, he’ll add some of his birthday money to the account. Keeping their goals in the forefront of their minds has helped them stay on track.

They also realized they had to share their goals with others. That made it easier for them to stay on track, because their friends and family knew about their goal of becoming debt-free.

“There were some people who laughed at the time, but now they’re asking me how to get of debt,” she said. “It’s taken the stigma off it — we have to talk more about money.”

Paying off debt not only frees you up financially, but can also help you build your way to good credit. Keeping credit balances low or paid off, and making all debt payments on time can help raise your score over time. To see how your debt is affecting your credit, you can see your credit scores for free.

Christine DiGangi covers personal finance for Credit.com. Previously, she managed communications for the Society of Professional Journalists, served as a copy editor of The New York Times News Service and worked as a reporter for the Oregonian and the News & Record. 

People Miscalculate Insurance Needs-How can understand of insurance?

After 30 years of teaching risk management, I have concluded that most people just don’t understand insurance. This repeatedly leads them to pay way too much to cover small known costs, while going without protection against the really big risks they face.

I call insurance for small predictable costs “haircut” insurance. That is, if you need to get your hair cut every six weeks like I do, you don’t need insurance–it’s not a risky expenditure. Nevertheless, people often do insure against low-cost predictable events.

In this category I put dental insurance that covers predictable annual cleaning visits: by self-financing your checkups, you can save enough to cover the cost yourself. But then the same people who buy checkup insurance also don’t read their policies to see whether expensive dental surgery is covered (and often it’s not!). Extended warranties on relatively low-cost consumer products are another example: why buy extra coverage for a kitchen microwave when the manufacturer’s warranty covers product defects anyhow, and most microwaves don’t break?

Along the same lines: most people pay too much for auto insurance when they elect low deductibles, towing, car rental, glass coverage and other features in their policies.  Yet they could save quite a lot in annual fees by upping the deductibles and dispensing with other frills–after all, the chance of needing these other services are low, and it’s probably more cost-effective to pay for it when needed. Same goes for homeowners insurance: You can invest the savings from a $10,000 deductible policy and make money on it, while retaining coverage for the big risk like a major fire, flood or earthquake.

Conversely, while paying for the small stuff, many students and colleagues forget about the big stuff. For instance, everyone starting a family after their baby was born–only to have her spouse perish in a motorcycle accident when she was in her 8^th month of pregnancy.

should buy life and disability insurance–before the family is launched! A woman I know told me she was planning on buying life insurance on her biker husband

Finally, one of the most critical risks you face is liability–the chance of being hit with a huge lawsuit from someone whose child slipped in your driveway and broke her neck. Despite the relatively low cost of a $1 million to $2 million policy, on the order of a few hundred dollars, few Americans understand how exposed they are to huge potential losses.

Insurance is best suited to help you finance catastrophes, not haircuts.

Olivia S. Mitchell is a professor of Business Economics and Public Policy at the Wharton School of the University of Pennsylvania where she focuses on pensions, household finance and risk management.

Starting in 2018 Rivals of Siemens Sees Catch-Up

German engineering group Siemens may need until 2018 before it can start to catch up with major rivals in terms of sales growth, its chief executive told a German magazine.

CEO Joe Kaeser unveiled a corporate overhaul in May, dubbed "Vision 2020", that will simplify the group's structure and help the company make up ground lost to more profitable competitors such as Switzerland's ABB <ABBN.VX> and U.S.-based General Electric <GE.N>.

"The growth targets under 'Vision 2020' are set out in such a way that we can grow faster than the competitors from 2018," Kaeser was quoted as saying by Manager Magazin on Wednesday, according to an excerpt of an interview to be published on Friday.

He cited product development cycles of many years for the company's gear and equipment such as gas and wind turbines, converter stations and trains.

Kaeser said in July there was "no quick fix" for the problems at its energy business.

Manager Magazin also cited company sources as saying that up to 10,000 more jobs may have to be cut over the next few years as part of the overhaul. The company said in May that close to 12,000 jobs would be affected. Siemens declined to comment. (Reporting by Jens Hack; Writing by Ludwig Burger, editing by Louise Heavens)

http://www.foxbusiness.com/industries/2014/10/22/siemens-sees-catch-up-to-rivals-starting-in-2018/?intcmp=fbfeatures

mortgage rates this week raised Financial market turmoil creates a tempting opportunity for mortgage refinancers

A sudden plunge in mortgage rates this week raised an urgent question for millions of Americans: Should I refinance my mortgage?

Across the country, homeowners and would-be homeowners eager for a bargain rate fired off inquiries to lenders. The opportunity emerged from the tumult that seized financial markets and sent stock prices and bond yields tumbling. Rates on long-term mortgages tend to track the 10-year Treasury yield, which fell below 2 percent for the first time since May 2013.

Accordingly, the average rate for a 30-year fixed mortgage, mortgage giant Freddie Mac reported, dipped below 4 percent to 3.97 percent — a tantalizing figure. As recently as January, the average was 4.53 percent. Ultra-low rates do carry risks as well as opportunities. Charges and fees can shortchange refinancers who are focused only on the potential savings. And falling rates are often associated with the broader risk of an economic slowdown that could eventually reduce the income that some people have to pay their mortgages.

Yet the tempting possibility of locking in a sub-4 percent rate has a way of motivating people. "It gets people excited," said Michelle Meyer, an economist at Bank of America. "It gets mortgage bankers excited. It gets prospective buyers excited." The drop in rates could finally give homeowners like Issi and Amy Romem of Mountain View, California, the chance to refinance. Amy Romem bought the condo at the peak of the housing boom for $400,000, using an adjustable-rate loan with an initial 5.875 percent rate that would reset after 10 years. The reset would amount to an extra $400 a month on the condo, which the couple now rents, Issi Romem said. "Seeing rates go down even more is something I wasn't expecting," he said. "It reminds me that I need to do this now, before interest rates do go up."

Before this week, many bankers, lenders and borrowers had assumed that home loan rates would soon start rising closer to a two-decade average of 6 percent. That was based on expectations that the Federal Reserve would start raising its key short-term rate next year — a move that would likely lead to higher mortgage rates, too. But that assumption fell suddenly into doubt as stocks plunged on Monday and Wednesday amid fears about global economic weaknesses, the spread of Ebola and the threat of the Islamic State militia group in the Middle East. Seeking safety, investors poured money into U.S. Treasurys. Higher demand drives up prices for those government bonds and causes their yields to drop.

The yield on the 10-year note traded as low as 1.91 percent Wednesday before ending the day at 2.14 percent. A stock market rally on Friday helped lift the yield to 2.20 percent. That suggested that the moment to refinance might be fleeting. "It's likely to be the last time we see these rates for a generation, if ever again," said Jonathan Smoke, chief economist at Realtor.com.

Even a slight drop in mortgage rates can translate into significant savings over the long run. For a median-priced home worth $221,000, a 0.5 percentage point decline in a mortgage rate would produce savings of $50 a month, according to a Bank of America analysis. Still, it takes time for the savings to offset the costs of refinancing. "There's no free lunch in this," noted Gary Kalman, executive vice president at the Center for Responsible Lending.

Lenders typically charge fees for paperwork on the loan and to pay for a home appraisal and title insurance, among other costs. "You want to make sure the interest rate you're getting is dropping enough that it more than offsets whatever fees you may be paying," Kalman said.

Refinancing from a 5.5 percent rate — which some borrowers still have — to 4 percent would save $180 a month on a $200,000 mortgage. But the fees — averaging around $2,500 — mean it would take about 14 months to break even. Research done this year by economists at the University of Chicago and Brigham Young University found that 20 percent of eligible households failed to refinance when rates first made doing so profitable in late 2010. They essentially cost themselves $11,500 in potential savings. Those who missed those late rates last year now have a second chance.

"When you get these little boomlets like we see now, most of that is what drives refinancing activity," said Bob Walters, chief economist at Quicken Loans. While applications for refinancing have been rising this week at Quicken, Walters added, it's unlikely that many would-be home buyers will be able to benefit. It can take buyers months to mobilize, because they need to first find a suitable house in the right neighborhood. That makes it hard for them to immediately snap into action when rates drop, though it might coax them into looking.

"It's a bonus if rates are lower," Walters said, "but it doesn't dictate the decision."

http://www.foxbusiness.com/markets/2014/10/18/financial-market-turmoil-creates-tempting-opportunity-for-mortgage-refinancers/

Russia's high dependence on the hydrocarbon sector Moody's Cuts Russia's Rating to 'Baa2' from 'Baa1'

Moody's Investors Service cut Russia's sovereign debt rating to 'Baa2' from 'Baa1', becoming the second ratings agency to cut the country's ratings this year, after S&P initiated a downgrade in April. Moody's said the prolonged crisis in Ukraine was weighing on Russia's medium-term growth prospects.

"The military confrontation in Ukraine and escalating sanctions against Russia are likely to have an increasingly negative macroeconomic impact on Russia's investment climate," the ratings agency said on Friday. The agency maintained its negative outlook on Russia.

Moody's cited the ongoing erosion of Russia's foreign exchange buffers due to low oil prices and Russian borrowers' restricted access to international markets as key drivers for the downgrade.

Russia's high dependence on the hydrocarbon sector has not materially decreased despite its government's diversification strategies and is likely to limit the economy's potential for growth, Moody's said. The agency expects real growth to start declining by the end of the year and continue falling at least until mid-2015.

Moody's also lowered Russia's long-term country ceilings for local and foreign currency debt and for local currency deposits to 'A3' from 'A2'. (Reporting by Sudarshan Varadhan in Bangalore; Editing by Kirti Pandey and Simon Jennings)

http://www.foxbusiness.com/economy-policy/2014/10/17/moody-cuts-russia-rating-to-baa2-from-baa1/

Study annual survey : Financial Advice for the Youngest Baby Boomers

According to a Transamerica Center for Retirement Study annual survey, forty-two percent of baby boomers, the youngest of whom turn 50 this year, have less than $100,000 in retirement accounts.  

Those boomers celebrating their 50th birthdays this year are realizing their golden years are not too far away and it is time to get serious about retirement planning.

Craig Brimhall, Vice President of Retirement Wealth Strategies at Ameriprise offered the following tips on what boomers turning 50 need to start doing this year to ensure they have a financially secure retirement.

Boomer:  At age 50 what catch up contribution rules apply to my IRA and 401K savings?

Brimhall:  You may make additional contributions to a retirement plan if you are 50 or older. IRAs (and Roth IRAs) have a regular limit of an annual contribution of $5,500 and the catch up contribution is $1,000, so the annual limit for those over 50 is $6,500. All retirement plans have “catch up” provisions and those numbers vary by plan type. But it’s important to remember that if you are eligible to contribute to an IRA (and your contribution may or may not be deductible, depending on your income), you can contribute that $6,500 to a regular IRA, a Roth IRA, or some combination of each type. However you may not contribute more than the total limit when you add them all up.

Boomer:  How important is it for me to pay down my debt and in what ways can I speed up the process?

Brimhall:  Whether or not you are comfortable carrying debt into retirement is a personal decision – some people are determined to retire debt-free while others may plan to have a cash flow and budget that accounts for debt after they leave the workforce.

For those who want to eliminate a mortgage or a large loan, a simple way to accelerate your debt-free day is to pre-pay a little extra to the principal amount whenever possible. Though they’re quite rare, first, check to see if you are subject to pre-payment penalties. If you will not receive a penalty for pre-paying, consider simply following your amortization schedule and make an extra payment to the principal each period with your regular payment. This technique may significantly reduce the life of the loan, though if you wait until later in the life of the loan, you will notice that most of the payment goes to reducing principal and this idea may be less appealing.

Boomer:  If I do not have a life insurance policy when I turn 50, what type of life coverage should I be looking at?  If I do have life insurance should I be making any changes to the policy?

Brimhall:  Life insurance, even at age 50, can have very legitimate purposes like debt elimination for your family and funding of future expenses they may have (such as college). It’s common knowledge that the older a person gets, the more expensive life insurance can become. However, as average lifespans continue to grow longer, you may be surprised at the affordability of life insurance even at 50 and beyond.

There are different kinds of life insurance. A term life insurance policy may be suitable if you only want the coverage for a certain amount of time (a term of years) until certain expenses or obligations disappear. There are several types of term life options, but in short, a level term policy generally means level coverage but possibly increasing premiums as you age. Decreasing term generally means a fixed premium and reducing coverage, which may be a good fit if debts or obligations are decreasing as well.

While they can be more costly, a universal (or whole) life plan may be beneficial if you also want to put a significant amount of money away into the cash value as a form of tax-deferred savings.  In this way, the policy can do double duty by providing a tax-free death benefit for heirs and also provide a tax-deferred savings or investment vehicle from which you may be able to withdraw tax-free amounts later during retirement.

If you already have an insurance policy, you may want to see what options you have as you age. Depending on what type of plan you have, you may need to replace it or you may be able to make changes to it without replacing it. As an example, a universal policy may offer you the option of reducing the death benefit (assuming your needs for the coverage have decreased over the years) and pump up the cash values with additional contributions to use as income later.

Boomer:  What other insurance coverages would you recommend I look into?

Brimhall:  While you are in your working years, your risk of having a disability lasting 90 days or longer is actually quite high. According to the Social Security Administration, 1 out of 4 people will experience a long-term disability during their working years. The chance of disability is actually higher than death at all ages during working years and for a 50 year old, the risk of disability is 1.8 times higher than death*.

So, a long-term disability plan may be as important as life insurance. And, as you age, the concept of disability evolves into the chance of needing long-term medical care. The chance of needing long-term care assistance before the end of life is about 70% for those who are now age 65.** So if you haven’t already, you may also want to consider long-term care insurance.

(*the Society of Actuaries)

(**US Dept of Health and Human Services )

Boomer:  Is turning 50 a good time to diversify my portfolio?

Brimhall:  Any time is a good time to diversify, depending on your risk tolerance. Remember that diversification is a technique to try to reduce volatility, not enhance returns. It may give you a better return, but diversification should be primarily thought of as a risk management tool, especially as you age. As you near retirement, you may want to try to reduce volatility and go for “good returns over time” versus trying to “hit the ball out of the park.”

http://www.foxbusiness.com/personal-finance/2014/10/16/financial-advice-for-youngest-baby-boomers/?intcmp=obnetwork

on busines :How to Invest Your 401k Savings

How to Invest Your 401k Savings

These days, we all have to be investment experts. If you want to retire in style and enjoy the same kind of golden years as earlier generations did, you have to take control of your own financial destiny. The amount of money you will have to live on depends on you – namely, your ability to make the right choices for investing your 401k savings and other retirement savings.

Unfortunately, you’re probably not getting much guidance from your plan sponsor for your 401k. You may just have a sheet of investment choices. How do you go about making sense of those 401k savings choices and decide what is best for you?

Manage Your Savings as a Single Portfolio

If you are like most people, you have your retirement savings spread across more than one account. To make the most out of your retirement savings, you need to make sure you have the appropriate asset allocation across your entire retirement portfolio, including your 401k savings. Include the assets that you have in other locations as you consider how to invest your 401k savings.

Organize the 401k Savings Investment Choices

A little organization can go a long way. Your fund sheet should at least provide categories for the different funds like “stock,” “bond,” “balanced,” and probably “target date.” The first thing you want to do is to separate out the target date funds from the rest, as deciding if target date funds are good for you is a separate decision (we’ll come back to this below).

Next, look for the word “index,” which is evidence of a passively-managed index fund. Index funds aim to replicate a market index like the S&P 500 or the Russell 1000 Value. Active funds, in contrast, try to outperform their benchmark indexes—but they come with higher fees. The fees for passive funds tend to be significantly lower than that for active funds.

You want to further separate the choices into “asset class buckets.” These include distinctions like growth versus value, large or small capitalization, international developed or emerging markets and so on.

401k Target Date Funds – Yes or No?

Now we come back to the target date fund question. First, let’s define what they are. Target date funds are a mixture of investments, such as stocks and bonds, that are allocated for you based on the amount of time that you have left before retirement. As you get older, the target-date fund will automatically shift your portfolio into less risky investments.

Because the target date fund’s asset allocation is being managed separately from the rest of your holdings, you should only consider target date funds if you do not have any other holdings. If you hold other investment assets, your portfolio will not have the optimal asset allocation.

If you do not have any other savings and are considering target date funds, you need to be aware of some additional shortcomings. Target date funds don’t know anything about your retirement goals, your risk profile and how much you are saving. Two people with entirely different risk profiles and financial situations will get exactly the same allocations just because they have a similar age. Plus target date funds don’t allocate assets in a tax-efficient manner. Because target date funds hold a large number of asset classes in a single account, it makes optimizing your portfolio for tax efficiency more difficult.

Investing Your 401k Savings

Now that you’ve organized your portfolio and your choices and made a decision – yea or nay – about target date funds, the next step is to figure out how you want to allocate your assets, and then pick a fund from each “asset class bucket.” Research has shown that the way you slice up your investments among asset classes is the most important determinant of successful long-term portfolio performance. So treat this decision seriously, and seek assistance from experts to help you get this right.

Jemstep’s Portfolio Manager can give you customized asset allocation advice based on your risk tolerance, goals and investing preferences. It can also analyze the options within your 401k plan, and offer you specific buy/sell recommendations based on what’s offered within your plans and make sure you stay on track with alerts when it’s time to make a change or rebalance.

https://www.jemstep.com/article/How-to-Invest-Your-401k-Savings?utm_source=outbrain&utm_medium=outbrain&utm_campaign=Owned