Master Financial Education


E. F. Moody Jr.


EFM@EFMoody.com

 PhD, MSFP, MBA, LLB, BSCE

352 228 4523

Knowledge makes obsolete the inequities that ignorance and prejudice justify

Below are sections that have been created over time 

Caution- They are rarely updated now due to time constraints so use at your discretion.

It is this intensive daily commentary that is the major focus

401(k) 

ARBITRATION and  LITIGATION

CHARITABLE STRATEGIES

COLLEGE PLANNING

ESTATE PLANNING

ETHICS

FINANCIAL PLANNING

INVESTMENTS

INSURANCE and ANNUITIES

LONG TERM CARE & AGING

REAL ESTATE

RETIREMENT


I have asked Errold Moody to provide a brief example of what he has actually found on behalf of a client who engaged his services to review the insurance contracts which funded the client's estate plan. You will be amazed. In my 30 years in the business, I have never seen an authoritative, objective, prudent expert speak so clearly on the use of insurance. What Errold can do is unique in the industry.

Steven Winks

Secretary of State John Kerry - In America,  "you have a right to be (as) stupid (as) you want to be."
(But too many Americans are abusing the privilege)

Why did our systems fail and why will they continue to do so?  From Paul Volcker- our economics are based on “an unjustified faith in rational expectations, market efficiencies and the techniques of modern finance”


  Albert Einstein
 


4/17:


4/17: GAAAACK



4/16: Does Rebalancing Really Pay Off??

Knock yourself out as there is NO definitive conclusion at all. So in  the theoretical sense, find something else to do.

4/16: Rider
a chronic care rider which first became available at the end of 2011, allows an individual to withdraw up to $116,000 tax free in 2013 (adjusted annually for inflation), from the death benefit of a life insurance contract to pay for qualifying long-term care expenses.

4/15:



4/15:



4/15:


If interest rates rise 1% the 10 Year Treasury would LOSE 8.4% in value and Muni's wouldLOSE 6.6% in value. What if rates rise 2% in the next few years? You could double these losses to 16.8% and 13.2%, respectively.



4/15:

Guide for Self Employed Individuals Confused Between SEP IRA, Simple IRA and Solo 401(k)

By: Rick Pendykoski

For a self employed individual there are a variety of retirement investment options to choose from. The three most popular ones are SEP IRA, Individual 401(k) Plan, and Simple IRA.

SEP IRA
A Simplified Employee Pension (SEP) plan provides self employed people an easy way to contribute toward their own and employee’s retirement. It is a lot like a traditional IRA in terms of benefits. Your savings invested in a SEP-IRA grow in a tax deferred manner.

Under a SEP IRA, the owner can contribute as much as 25% of his net earnings from self employment up to a limit of $52,000.

A SEP IRA is one plan to consider when you are the sole owner of the firm and there are no employees to support. However the plan can get complicated and costly once qualifying employees come on board.  The same contribution percentage you choose for yourself must be adopted for each employee.  Qualified employees must be at least 21, earn at least $550 and have worked 3 of the last 5 years.

An attractive part of contributing to a SEP IRA is timing.  You can contribute any time you wish up to and including when you file your taxes including extensions. If your net income turned out to be more than you anticipated you have the choice to contribute a higher amount, thus lessening your taxable income. Conversely in a down year, you are not roped in at all – contribute what you can.

Individual 401(k) Plan
Since 2002 the Individual 401(k) is the most popular choice for self employed people and their spouses.   It is a less complex plan, allowing for a combination of personal deferrals and profit sharing.  Personal deferrals (contributions) can be up to $17,500 or $23,000 depending if you are fifty or over.  The personal deferral can be designated as Roth or Traditional or parts there of. The profit sharing adds another even more money into the plan.  Depending how your business is established, the profit sharing can be either 20 to 25% of the participant’s self-employed income. The sum of both contributions can be a maximum of $52,000 or $57,000 if you are over 50.

The best part of a solo 401(k) plan is that the contribution amount is optional. If you have generated healthy profits you can look to save the maximum amount allowed, while in lean years, you can even opt not to save anything.

Personal Loan – with a self directed 401 k plan, you have the ability to borrow up to 50% of your plan account balance with a dollar limit of $50,000.  It is a loan of course and has to be repaid but you can use the funds for any thing you wish.

Sometimes this type of plan is referred to as a Solo K.  This is a misnomer.  Spouses and partners can be part of the same plan.  There are so many advantages of a self directed 401 k v.s. Ira’s –  we always try to graduate our clients to this type of plan if possible.
 
SIMPLE IRA
This is a Savings Incentive Match Plan for Employees and is tailored for small businesses and self employed individuals. It is very easy to set up a SIMPLE IRA as it involves very little paper work. It is a great option for those businesses which have less than 10 employees and make more than $5,000. You can offer your employees this plan as an incentive or a perk.

In a SIMPLE IRA, an employee can contribute up to 100 percent of his earnings subject to a limit of $12,000. The employer can either make a matching contribution to the employee’s contribution up to 3 percent of the compensation or make a non-elective contribution, which is 2 percent of the compensation of the eligible employee. The non-elective contribution has to come through irrespective of whether the employee choose or not choose to contribute to his or her SIMPLE IRA.

An important point to remember about investing in a SIMPLE IRA is that withdrawals within 2 years of inception attract a penalty of 25 percent which is way higher than the usual 10 percent penalty for other retirement plans.


4/14:
  1. Is Self-Reported Risk Aversion Time Varying?

Date:

2014-03

By:

Seeun Jung (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
Carole Treibich (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), Paris School of Economics - Université Paris 1 - Panthéon-Sorbonne, AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM))

URL:

http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-00965549&r=cbe

We examine a Japanese Panel Survey in order to verify whether self-reported risk aversion varies over time. In most panels, risk attitudes variables are collected only once (found in only one survey wave), and it is assumed that self-reported risk aversion reflects individual's time-invariant component of preferences toward risk. Nonetheless, one may wonder whether financial and health shocks a person faces over his lifetime modify his risk aversion. Our empirical analysis provides proof that risk aversion is composed of a time-variant part and shows that the variation cannot be reduced to measurement error or noise given that it is related to income or health shocks. Then, we nonetheless find that time-invariant factors explain a bigger share of individual risk aversion than time-variant ones. Taking into account the fact that there are still time-variant factors in risk aversion, we investigate how often it is preferabl e to collect the risk aversion measure in long panel surveys. Our result suggests that the best predictor for current behaviors is the average of risk aversion, where risk aversion is collected every 3-4 years. The risk aversion measure is, therefore, advised to be collected every 3 or 4 years in long panel surveys.


4/14: 20 Best Resources for Parkinson’s

4/14:

Helping Senior Loved Ones With Downsizing


4/14:
  1. Why are economists so different? Nature, nurture, and gender effects in a simple trust game

Date:

2014

By:

Haucap, Justus
Müller, Andrea

URL:

http://d.repec.org/n?u=RePEc:zbw:dicedp:136&r=cbe

We analyze the behavior of 577 economics and law students in a simple binary trust experiment. While economists are both significantly less trusting and less trustworthy than law students, this difference is largely due to differences between female law and economics students. While female law students are already different in nature (during the first term of study) from female economists, the gap between them also widens more drastically over the course of their study compared to their male counterparts. This finding is rather critical as the detailed composition of students is typically neglected in most experiments. --


4/14:

4/13: I just find this hard to believe. Except I know that consumers are really stupid.

A recent Nationwide Financial Retirement Institute survey showed that seven in 10 affluent baby boomers mistakenly believe the Affordable Care Act will cover their costs. The reality is that neither the ACA nor Medicare have much to do with covering long-term services.

4/13




4/13:



4/13: Confused???

“A Crisis of Complexity” is what a recent Siegelvision survey has discovered. “American consumers are confused. They are overloaded with ambiguous information with time consuming and complex transactions. Borrowing money, buying products, selecting insurance and financial services have all become complicated tasks.”  This survey found that over half (55%) of consumers have difficulty understanding life insurance/annuity statements, 87% find them time consuming to read and 8 out of 10 consumers are unfamiliar with insurance terms. So if the statements are difficult to read and the consumer doesn’t know the terms used on those statements than they don’t know what they are actually paying for cost of insurance charges (COIs), fixed administrations expenses (FAEs), cash value based “wrap fees” (M&Es), and premium loads or what they are actually getting in the performance of invested assets underlying policy cash values.  Given findings from independent studies2 indicate there can be as much as 80% difference between best-available rates and terms and poorly-priced products, the opportunity to bring reduced policy expenses and/or improved performance of invested assets underlying policy cash values can be both significant and meaningful today. Also, because the neither cash‑value‑based investment expenses, cash‑value‑based insurance expenses (e.g., M&Es), nor life insurance policy earnings are generally reported in a standardized manner, you need to measure cash value performance and cash‑value‑based expenses.

To add to the consumers confusion, agents/brokers (too) often use illustrations of HYPOTHETICAL policy performance to compete, comparing illustrations can be "misleading" and is "strictly prohibited" by the chief regulatory body of the financial services industry, and are "fundamentally inappropriate" according to a study by the chief actuarial body of the life insurance industry, and "are subject to a high degree of fluctuation" and thus not reliable for determining the suitability of a given policy according to the U.S. Office of the Comptroller of the Currency



4/13: LTC Increases

Several insurance companies including John Hancock and Genworth Financial are seeking state governmental approval for long-term care premium hikes of 50 percent or more




Boy, this guy is good

4/10:






What are you looking at???

4/10: More women working








4/10:



4/9: Does City Location Matter When Choosing Assisted Living?

49:



or is it



4/9: $6.000 worth of fat
Over a lifetime, the medical costs for someone who was obese as a child amounts to $19,000 compared with $12,900 per person for someone who was of normal weight as a kid
obesity causes all sorts of health problems ranging from high blood pressure and cholesterol to joint and breathing problems (sleep apnea and asthma). And kids with such issues are likely to be on medication, another factor in the high cost. Plus, once obese kids grow up, they incur costs in lost productivity and missed work due to such health problems — those costs are in addition to the $19,000.

4/9:

Older Adults and Alcohol

A national 2008 survey found that about 40 percent of adults ages 65 and older drink alcohol. Older adults can experience a variety of problems from drinking alcohol, especially those who:

• Take certain medications
• Have health problems
• Drink heavily

There are special considerations facing older adults who drink, including:

Increased Sensitivity to Alcohol
Aging can lower the body’s tolerance for alcohol. Older adults generally experience the effects of alcohol more quickly than when they were younger. This puts older adults at higher risks for falls, car crashes, and other unintentional injuries that may result from drinking.

Increased Health Problems
Certain health problems are common in older adults. Heavy drinking can make these problems worse, including:

• Diabetes
• High blood pressure
• Congestive heart failure
• Liver problems
• Osteoporosis
• Memory problems
• Mood disorders

Bad Interactions with Medications
Many prescription and over-the-counter medications, as well as herbal remedies can be dangerous or even deadly when mixed with alcohol. Medications that can interact badly with alcohol include:

• Aspirin
• Acetaminophen
• Cold and allergy medicine
• Cough syrup
• Sleeping pills
• Pain medication
• Anxiety or depression medicine

Drinking Guidelines for Older Adults
Adults over age 65 who are healthy and do not take medications should not have more than:

• 3 drinks on a given day
• 7 drinks in a week

Drinking more than these amounts puts people at risk of serious alcohol problems.

If you have a health problem or take certain medications, you may need to drink less or not at all.

4/9: Kinda depressing

4/9:



4/8: Caregiver.com

4/8: Demographics






chart showing the percentage of the population that's older than 55 (red line) vs. the percentage of the population that's prime working age (green line).







4/8: Construction rules- will it come back up in the warmer weather?

What's with mining and logging??



4/7:

Filing Status

Modified AGI

Roth IRA Contribution Limit

Married filing jointly or qualifying widow(er)

Less than $178,000

$5,500 ($6,500 if age 50 or older)

More than $178,000 but less than $188,000

A reduced amount

$188,000 or more

$0

Married filing separately (unless you did not live with your spouse at any time during the year)

Less than $10,000

A reduced amount

$10,000 or more

$0

Single, head of household, or married filing separately and did not live with your spouse at any time during the year

Less than $112,000

$5,500 ($6,500 if age 50 or older)

More than $112,000 but less than $127,000

A reduced amount

$127,000 or more

$0


4/6: REVERSE MORTGAGES

The maximum origination fee allowed for a federally insured reverse mortgage, formerly called a Home Equity Conversion Mortgage, or HECM, is 2 percent of the initial $200,000 of the home's value and 1 percent of the remaining value, with a cap of $6,000, according to the National Reverse Mortgage Lenders Association.

You will also owe a mortgage insurance premium fee based on the amount of funds withdrawn during the initial year. That fee is 0.50 percent of the appraised value of the home if you take no more than 60 percent of the amount available in the first year, and 2.5 percent if you take more than 60 percent of the available amount. On a $200,000 home, 2.5 percent amounts to $5,000, and 0.50 percent is $1,000.

You will also owe a mortgage insurance premium annually, which accrues over time when the balance comes due. The annual premium is equal to 1.25 percent of the outstanding loan balance.

There are also appraisal fees, which vary by region but average around $450. If the appraiser determines that your house requires repairs, you will be required to complete the repairs as a condition of approval, as well.

Finally, there are closing costs, which are comparable to those of any mortgage loan and often amount to about $1,000. Some lenders will also charge a $35 monthly service fee for the life of the loan, but most have dropped that fee


According to the Federal Trade Commission, single-purpose reverse mortgages are the least expensive option, but they're not available everywhere and can be used for only one purpose, which is specified by the lender. The lender might indicate, for example, that the money can only be used to pay for home repairs, improvements or property taxes.

HECMs and proprietary reverse mortgages can be more expensive than traditional home loans, and the upfront costs can be high.

The amount of equity you can borrow in a reverse mortgage depends on your age; the type of reverse mortgage you select, such as lump sum, monthly payments or line of credit; and current interest rates. In general, the older you are, the more equity you have in your home and the less you owe on it, the more money you can take out




4/6:


4/6:


4/2: Keeping Backyard Poultry
Many of you were asking

4/2: S&P Dashboard

4/2:



4/1: Oops:China’s biggest banks more than doubled the level of bad loans they wrote off last year, in a sign that financial strains are mounting as growth in the world’s second-largest economy slows.

The five biggest Chinese banks, which account for more than half of all loans in the country, removed Rmb59bn ($9.5bn) from their books in debts that could not be collected, according to their 2013 results. That was up 127 per cent from 2012, and the highest since the banks were rescued from insolvency, recapitalised and publicly listed over the past decade.


3/31: Fake???
Billions of dollars are flowing into online advertising. But marketers also are confronting an uncomfortable reality: rampant fraud.
About 36% of all Web traffic is considered fake, the product of computers hijacked by viruses and programmed to visit sites, according to estimates cited recently by the Interactive Advertising Bureau trade group.
-- Wall Street Journal, “The Secret About Online Ad Traffic: One-Third Is Bogus”, March 23, 2014

3/31: True???

as much as 70% of the trading activity in markets today – activity that generates the constantly changing up and down arrows and green and red numbers they see and react to on CNBC – is just machines talking to other machines, shifting shares around for “liquidity provision” or millisecond arbitrage opportunities.

Yes, true- High-frequency (HF) trading firms represent
approximately 2% of the nearly 20,000 trading firms operating in the U.S. markets,
but since 2009 have accounted for over 70%
of the volume
in U.S. equity markets and
are approaching a similar level of volume in
futures markets.


3/31:
  1. Rating Agencies

Date:

2014-03

By:

Harold Cole
Thomas F. Cooley

URL:

http://d.repec.org/n?u=RePEc:nbr:nberwo:19972&r=fmk

For decades credit rating agencies were viewed as trusted arbiters of creditworthiness and their ratings as important tools for managing risk. The common narrative is that the value of ratings was compromised by the evolution of the industry to a form where issuers pay for ratings. In this paper we show how credit ratings have value in equilibrium and how reputation insures that, in equilibrium, ratings will reflect sound assessments of credit worthiness. There will always be an information distortion because of the fact that purchasers of ratings need not reveal them. We argue that regulatory reliance on ratings and the increasing importance of risk-weighted capital in prudential regulation have more likely contributed to distorted ratings than the matter of who pays for them. In this respect, much of the regulatory obsession with the conflict created by issuers paying for ratings is a distraction.



3/31: Roubini- “Last time around it took them two years to normalize from 5 to 5.25, too little too late … they created the biggest housing, real estate credit and equity bubble,” Roubini said Tuesday on CNBC’s “Closing Bell.” This time “it’s going to take them up to four years to go from zero to a neutral 4 percent. The risk is that we are going to create another huge bubble in the economy.”


3/31: Men and Aging

3/31: Needy Meds  Find help with the cost of medicine

3/31: Heal fundr Crowdfunding for Medical Needs

3/31: How Alzheimer’s Impacts Men and Women Differently

In 2010, 33% of moves to memory care communities were male residents, with that number increasing to 35% in 2014.

Because females tend to dominate the population of seniors, the decor, activities, and ambiance of senior communities are often feminine. This can make senior living environments somewhat uncomfortable for men, unless common areas and activities for men are present (for instance, card room, billiards room, gentleman’s club).

It’s easy to imagine a man of any age becoming frustrated with life in a environment where there are no opportunities to express or experience the masculine aspect of themselves

One challenge for men with Alzheimer’s involves a man’s size and strength. Alzheimer’s disease and the confusion and fear it can evoke on occasion causes sufferers to act out and even become aggressive. Some Alzheimer’s patients will yell at, curse at, push, or even strike their caregivers. Some patients, men in particular, will even act in sexually inappropriate ways that can make caregivers and family members very uncomfortable.

While professionals and family members recognize it’s the disease exhibiting this behavior and that the patient has little or no freewill by this stage of their illness, it doesn’t make them any easier to deal with. Both men and women can exhibit these behaviors, but because men are bigger, stronger, and generally more aggressive, these behaviors can be much more difficult to address in men. For this reason, finding care for a men with Alzheimer’s who has behavior problems can be a major challenge.

  • A woman in her 60′s has a one in six chance of developing Alzheimer’s disease during her remaining life, while that figure is one in eleven chance for men over 60
  • More than 60%-70% of Alzheimer’s and dementia caregivers are women
  • 10 million women are providing unpaid care to a loved one with Alzheimer’s disease or a related type of dementia
  • “Because of caregiving duties, women are likely to experience adverse consequences in the workplace. Nearly 19 percent of women Alzheimer’s caregivers had to quit work either to become a caregiver or because their caregiving duties became too burdensome”



3/31"  Marriage drops the probability of childhood poverty by 82%.

Specifically, high-income households have a greater average number of income-earners than households in lower-income quintiles, and individuals in high income households are far more likely than individuals in low-income households to be well-educated, married, working full-time, and in their prime earning years. In contrast, individuals in lower-income households are far more likely than their counterparts in higher-income households to be less-educated, working part-time, either very young (under 35 years) or very old (over 65 years), and living in single-parent households.

The data from the US Census Bureau shows that the number of single-person households has more than doubled in the last 50 years. Is it any wonder that income inequality in an absolute sense – as measured by household (which is the standard measure cited in the press and used in most academic economic studies) – has risen dramatically during that time?









3/31: Mauldin low rates

Over a period of time long [interest] rates, if left to their own devices, always converge to the nominal GDP growth rate (this was called the “golden rule” by Economics Nobel laureate Maurice Allais, and [this] is the core belief in Knut Wicksell’s theory). However, a central bank can fight against this natural tendency by maintaining short rates at abnormally low levels, as the Federal Reserve did from the early 1970s until 1980 and again since 2002. During these two periods long rates were conspicuously lower than growth rates, violating the golden rule.

If negative, the difference between long bond rates and the economic growth rate is effectively a subsidy paid by the saver to the government. In short, this difference measures the amount of financial repression taking place in an economy. The fact that it is not paid to the Treasury does not mean it doesn’t exist. It is a tax paid by a nation’s savers – e.g., pensioners in Peoria….

This shows us that US savers have been paying a virtual tax equivalent to between 1% and 2% of GDP almost every year since 2002 – a sign of the “euthanasia of the rentier” central to every Keynesian analysis. The problem is that subsidizing government spending ultimately leads to lower productivity, slower structural growth and higher financial-crisis risk.

The losers in this deal are usually ordinary folk. Pensioners get no interest on their savings, while rich investors use cheap capital to chase up the cost of property, oil, etc. The Gini coefficient rises, as the poor are seldom asset-rich, and real disposable incomes take a hit as prices rise. Sometimes banks are pressured to make up the shortfall with consumer loans to the struggling classes – adding to the bonfire when the inevitable financial crisis comes.

At the end of the day, it is simple. Savings equal investments, so any tax on savings leads to lower economic growth over time. We may be seeing declining ratios in government spending as a percentage of GDP, but this is really an accounting decline. Financial repression means the government is still taxing the savers, leaving less aside for meaningful investment in the future.



3/30: I am number 1

You go to a website to buy a tent for camping. You answer some questions about the type of camping you plan to do. The site then recommends four tents that best match your use, and compares the tents based on 10 attributes (how waterproof they are, how much they weigh, how much air ventilation they have, and so on). Two of the tents are “best buys” for the attributes that are important to you. Which tent will you buy?

Order effect at websites -- Felfernig (2007) set up a research study to find out. Even though there were 10 attributes that the tents were compared on, participants focused only on two or three attributes. The researchers varied the order in which the tents appeared on the page: first, second, third, or fourth. It turns out that the most important attribute was not whether the tent was waterproof or if it had plenty of air ventilation. The most important attribute was the order in which the tents appeared on the page! Participants disregarded attributes and simply picked whichever tent was the first one to show. People picked the first tent 2.5 times more than any other. They chose the first tent 200 times; they chose the other three tents (combined) only 60 times. This is an example of the order effect.

We rationalize the choice – The participants explained their choice, however, based on the logical decisions they thought they were making. For example, they explained the choice of tent #1 by saying, “This tent is the most waterproof.” They thought they were weighing all the attributes of all the tents, but in reality they were considering only a few attributes, and even those attributes didn’t matter. All that mattered was an unconscious reaction to which tent showed up first.


3/30: Remembering



This is why just in time info for financial literacy is necessary. People will not/ can not remember the hard stuff. Just doesn't work

the degradation of memories:

Re(−t/S)

where R is memory retention, S is the relative strength of memory, and t is time. The graph at the top of this post is an example of this formula. It’s called the “Forgetting Curve”. Because flashbulb memories are so vivid, it was thought that perhaps they were not as subject to forgetting as other memories. But it turns out they are. Which is kind of disturbing, when you think about it. Because they are so vivid, we are SURE they are accurate and real. But they aren’t nearly as accurate as we think.

Note that S is NOT strong in a financial course.

You can remember about 3-4 things (for about 20 seconds) and then they will disappear from memory unless you repeat them over and over.


3/30: Stop Impaired Driving

3/26: Growth-

Average state personal income growth slowed to 2.6 percent in 2013 from 4.2 percent in 2012, according to estimates released today by the U.S. Bureau of Economic Analysis. State personal income growth ranged from 1.5 percent in West Virginia to 7.6 percent in North Dakota, with every state growing more slowly in 2013 than in 2012. Inflation, as measured by the national price index for personal consumption expenditures, slowed to 1.1 percent in 2013 from 1.8 percent in 2012.

3/26:
Caring for an Ailing Spouse with Parkinson’s

By Richard N. Sater

 

The choice to provide care at home marks an important change affecting the lives of both partners. If you choose to be the primary caregiver for your spouse, you will find it is one of the most demanding tasks you’ve ever tackled. It is a major commitment, and not one to be taken lightly.  Once you make the choice to provide in-home care, it is entirely up to YOU to help your spouse get as much out of life as possible. 

The first consideration is attitude – not only of the potential caregiver, but of the ailing spouse as well.  If either of you considers the task to be a chore, it will probably not be done very well and neither partner will be satisfied.  For me, it was something I wanted to do for the woman who had given me so much love over the 54 years we spent together.  By making a commitment, I mean doing everything that you can for your spouse.  You make sacrifices as they are called for.

First things first. It is important for both partners to have Living Wills and Medical Powers of Attorney in place. (These documents are required to be witnessed and notarized.)  The first one defines the limits on health care that either partner is willing to accept in a crisis situation.  The second defines the procedures for transferring health care decisions to another party when the incumbent becomes incapable of making those decisions.  These documents take the need for critical decisions out of the hands of any caregiver.  It is important that all outside care providers are aware of the Living Will stipulations and have access to a copy of those instructions.

Regarding the practical, hands-on aspects of home care, first and foremost is providing a safe environment for your ailing spouse.  Use professional caregivers as a resource to determine the need for additional safety devices in your home.  (Such resources are available in most communities.) You may need to install safety bars and handrails in strategic areas – like bathrooms, stairways, areas across from open stairways, and other potentially hazardous areas.  A fold-down seat in the shower can make bathing much safer.  Eliminate tripping hazards such as loose carpets, extension cords, and low furniture. 

Single-floor living may be the best arrangement, but is not always possible. If your home is on multiple levels, consider installing a stairway lift to ensure safe passage from one floor to another. Consider using alarms to detect unsafe actions, such as getting out of a chair or bed without assistance.

A baby monitor or intercom can be useful to hear your spouse when you are in another part of the house. Special locks or gates for stairway doors or entries could be useful, as could arming your home security system (if you have one) to sound an alarm if an outside door is opened.  Think about how to keep your partner safe at all times.

An ailing spouse is likely to have increased medical needs, and it is important to manage doctor visits and medications. Schedule regular appointments and provide assistance in transporting your spouse to and from these appointments.  Sit in on the doctor visits and make sure you get satisfactory answers to any questions you have. Maintain adequate supplies of all necessary medications and make sure you administer them as directed.  Use a pill container that divides medications by the day of the week (and the time of day) and prepare everything in advance. If your spouse has trouble swallowing pills, try crushing them and mixing them with pudding or some other soft food. (Some medications cannot be crushed and administered this way – ask the doctor.)

Once you make the decision to be the primary caregiver, you must make sure to take very good care of your own health. Get regular physical examinations, a yearly flu shot, take your medications as prescribed, and exercise. You cannot help your spouse if you are ailing yourself.

Taking care of an ailing spouse may mean taking on a number of other household chores as well, including shopping for groceries, planning and preparing meals, doing laundry and housecleaning. Additionally, your spouse will likely need assistance with personal care – using the toilet, bathing, dressing and so on.
 
As illness closes in, the world becomes smaller and more restricted, which can be very frustrating for both of you. To the extent possible, try to see things from your spouse’s perspective. Be as patient and compassionate as you can. Adapt and improvise when you have to and you will have the best chance to overcome problems as they arise.

Mealtime can present some challenges. Remember the foods that your spouse especially enjoyed, and do your best to include those favorites regularly. If swallowing becomes a problem for your spouse, a speech therapist can give you some guidance.  You may need to puree food for safe consumption. Purchase a small food processor to help you out. (Baby food is an alternative also.) You may need to add a thickener to beverages, readily available at most pharmacies.  Specially-designed eating utensils and dishes are available that make it easier for your spouse to feed him- or herself, though you may need to feed your spouse at times. Use a bib or apron to protect clothing. Your spouse may need to eat small meals more than three times a day.  Keep favorite snacks on hand.

Keep an eye on your spouse to see how well he or she manages to accomplish routine activities like using the toilet, bathing, getting in and out of bed, dressing, just getting around. Be aware, and be ready to offer assistance if there appears to be a struggle.

Look for activities that your spouse can manage so that he or she feels useful around the home. There are a number of tasks that may be appropriate, such as sorting and folding laundry, drying dishes (nothing too heavy or fragile), setting the table, dusting, and so on. Even if your spouse is wheelchair-bound, such tasks may be possible with your help.

As often as possible, use your spouse as a resource – ask for advice or input about performing household tasks, planning meals, shopping for groceries, and so on. As much as possible, keep your spouse involved in your daily life, and certainly involved in any decision that directly affects him or her. Your spouse may not be able to dress without assistance, but he or she can still choose an outfit. Regular visits to the barbershop or salon for a haircut or style can do wonders for morale. Be creative – don’t get hung up on the way things were always done in the past. Communicate!

Give some thought to providing entertainment that your spouse can enjoy. Favorite movies on DVD can be enjoyed anytime. If your spouse enjoys reading, keep plenty of well-loved books on hand. Visit the library together! Make sure your spouse has adequate light, a comfortable chair, and glasses with extra magnification or a magnifier if necessary.  A special support for books, magazines or a newspaper may be helpful.  If short-term memory is a problem, consider options that don’t require remembering a storyline.  The MGM series That’s Entertainment consists of songs and dances excerpted from movie musicals. PBS ran a series on National Parks that includes beautiful scenery that can be enjoyed without having to follow a story.  Variety or talent shows may be good choices. As for books, consider episodic stories (such as James Herriott’s veterinary memoirs) that are light on plot.  Picture books or audio books may also be an option.

Encourage friends and family members to visit often; especially the grandkids! Even if your spouse has difficulty communicating, he or she can enjoy the company and conversation of others. Your place of worship may have a home-visitation program as well, allowing your spouse to keep up-to-date even if he or she is unable to attend services.

If physical intimacy has been a regular part of your lives, let it continue.  It is important for both of you. It shows your spouse that he or she is still a needed and desirable partner.  Find ways to work around any inconvenience that such intimacy may involve. It’s a small price to pay for the emotional benefits you both will gain.

Your spouse should have a regular exercise program, if possible – either for rehabilitation or to maintain a level of strength and mobility. Speak to a physical therapist or doctor and learn what exercises are appropriate and how (and how often) they should be done.  Provide suitable exercise equipment or visit a gym, if possible, to work with a knowledgeable trainer. Teach your children and grandchildren how to assist with the exercises. They’ll be pleased to help Mom or Dad, and you’ll get a break as well. (Other caregivers, if you use them, can help out also.)

Another area that should be addressed is keeping your spouse safe when traveling.  Always use a seat belt and shoulder belt. If your spouse has trouble sitting up straight, there are car seats available for adults that may be useful. They have a four-point harness like a child’s safety seat, and will keep your spouse in a safe position for traveling and reduce the risk of injury should the vehicle’s airbag be deployed.  A stool and a slippery covering on the seat may help them get in and out of the vehicle and be positioned for attaching the seat harness.  If your travel plans include staying in a hotel or motel, be sure to request a handicapped-equipped room. You may want to carry a rubber bathtub mat and suction-cup safety bars with you just in case. They’ll provide an extra measure of protection.

Your spouse will want your home to be just as it always was, so that it seems familiar. This is especially important if your spouse has short-term memory problems or dementia. However, it is important to keep your home clean and uncluttered at all times. Remove extra furniture and decorative items that could be hazardous if knocked over (glass vases or china figurines, for example).  Consider hiring a house-cleaning service to handle heavy cleaning, particularly in the kitchen and bathroom. Schedule a weekly appointment. It will be one less concern for you, and allow you to concentrate on care-giving.

If your home is unsuited to the demands of your spouse’s illness, you may have the option of relocating. If so, there are a number of features that you should consider: open spaces are much easier for maneuvering walkers and wheelchairs, as are wide doorways and short-pile carpets. Choose a single-story house (no stairs) and consider the use of ramps for access. If you can’t afford to move, you may want to talk to an expert about ways to modify your home to make it safer for your spouse.

As your spouse’s care becomes more time-consuming, you will find that you have difficulty getting everything done. Being responsible for your spouse’s care 24 hours a day is a heavy load to carry. You will require some time away from your spouse so that both of you have time to catch your breath. Check with social services agencies in your area to see what resources are available. (Your place of worship may have some suggestions also.) Consider engaging a part-time caregiver to assist, even one or two days a week for a few hours, so you can have some time to yourself. Adult daycare facilities are available in most areas, and that may be a workable option. If you choose to get assistance, talk with your spouse to make sure he or she understands the arrangement. When you leave your spouse in someone else’s care, make sure you commit to a time when you will come back and stick to it. Your spouse may become anxious otherwise, as he or she depends on you.

Be aware of what is going on with your spouse.  Be alert for changes and they may be gradual or sudden, so you need to keep an eye on behavior, both physical and mental. Even an unusual odor may alert you to a medical problem that requires treatment.  If you notice such a condition, SEEK HELP IMMEDIATELY.  Your spouse may disagree, but you must trust your own judgment.  Prompt action may be critical. Call 911.

As your spouse’s condition changes, you need to modify your caregiving to accommodate the change.

Making home care effective requires a commitment and input from both partners.  If either partner cannot do that, don’t do it at all.  Find someone or some place that can provide the needed care without letting it become a point of disagreement.  Even under the best of circumstances, there will be challenges and frustrations that require attention.  Do the best that you can with them. 

Though no one likes to think about such things, you need to take care of some end-of-life decisions. Do you want a funeral? Cremation? A service? End-of-life planning is never easy, and having an ailing spouse can compound the difficulty. If possible, involve your spouse in the choices. Inform your family. Make sure you put everything in writing. Update your will, if necessary, to spell out your decisions.
 
It is conceivable that the care you provide for your spouse at home will not be enough eventually.  Conditions change, people change and it just may not work any longer.  Perhaps the needs of your spouse become too great to manage, or perhaps the illness progresses to the point that medical monitoring is necessary. It is much better to have thought about this possibility in advance and have made a decision about how to handle that situation before a crisis arises.

It’s a good idea to do some research. Planning ahead will make the process less stressful for you and your spouse. Check out the long-term care facilities in your area. Look online for ratings and feedback about them. Ask doctors and social service providers for their advice and input to help you make an informed decision. Meet with customer service representatives from the various facilities with a list of questions.

Visit prospective care facilities and talk with residents and their families. Is the home clean, well-lit, and inviting? Observe how the staff treats its residents. Is there enough staff to manage the facility and care for the residents?  Does the facility offer a variety of appropriate activities on a regular basis? How is the food? Does the staff provide feeding assistance if necessary? Is the staff able to supervise bathroom visits, or provide other personal grooming services? What is the policy about taking a patient away from the facility for the day? (Is a doctor’s approval required?) What about visiting hours? How will your spouse feel about living there? There is nothing easy about the decision to move your spouse into a long-term care facility, particularly since there may be little or no chance that he or she will be able to return to your home.

Caring for an ailing spouse is a major responsibility, but it can also be very rewarding. You may find yourself (as I did) feeling closer to your partner than you ever had been before. When there is no more care to be given, the best that you can hope for is the comfort that you did everything you could.


3/25: Gays can inherit property from one another without the need for a will. Those states (which include some states that now have legal same-sex marriage) are California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Nevada, New Hampshire, New Jersey, Maine, Oregon, Rhode Island, Vermont, Washington and Wisconsin, according to the Human Rights Campaign and Lambda Legal, the gay and lesbian legal services organization.

New York is not among them.

The Social Security situation gets murkier for people who don’t live in states that recognize their marriages, civil unions or domestic partnerships, though these experts hope that they will be eligible for benefits someday, without having to move.


3/25:

A 412 (e) (3) plan is a defined benefit plan funded with guaranteed annuities that may also have death and disability benefits. A defined benefit plan allows a plan participant to fund more for their retirement then a SIMPLE, SEP or 401k profit sharing plan

         In a SIMPLE the limit is $12,000

         In a 401(k) plan, the limit is $17,500

         In a SEP the limit is $52,000

In a SOLO 412(e) (3) plan the limit is an amount to provide a guaranteed income of  up to$210,000 for life-and is actuarially determined. The tax deductible contribution could be over $300,000 a year.



3/23: Life Settlements

1.   More than 90% of the U.S. population lives in the 42 states that regulate life settlements. All of the remaining 8 states are currently developing life settlement regulation.

2.    Depending on which study you refer to, a life settlement transaction results in a cash offer of 4X to 8X the surrender values offered by insurance companies.

3.    It is pretty well agreed upon across the life settlement marketplace that the industry has effectively promoted life settlements to approximately 5% of the insurance producer market segment.

 

4.   There are more funding sources today than there have ever been in the life settlement market. Purchasers are willing to evaluate large and small face amounts and a much longer range of life expectancies.


5.   According to data from the National Association of Insurance Commissioners, there have been only 4 life settlement-related complaints reported to insurance regulators nationally over the last 4 years.


3/23: Foreclosures-

From 2011 to 2013, for instance, more than 65,000 homes valued at above $500,000 went through foreclosure,


3/23: Poor???

latest research found that about one-third of U.S. households qualify as “hand-to-mouth” arrangements, defined as consumers who spend all their available resources in every pay period, with nothing left over. Of those, only about one-third are poor households, with no assets at all. The other two-thirds spend all their income but also have a sizable amount of illiquid wealth, with median net worth of about $50,000 for a 40-year-old who fits the profile, and $100,000 for a 60-year-old. That may not qualify as "wealthy," exactly, but it does reflect valuable assets that can't be readily used to pay bills. And some hand-to-mouth consumers have a net worth well above the median.

that would add up to about 105 million people (including kids and seniors) who live in a hand-to-mouth household, with about 37 million being poor, with no assets, and the other 70 million having considerable assets. The other 213 million Americans live with more of a cash cushion, whether they own hard assets or not.






3/23:




3/23: CAPE

The so-called Cyclically Adjusted Price/Earnings ratio, also known as the Shiller P/E ratio after Yale economist and Nobel laureate Robert Shiller, compares share prices to average per-share earnings from the past 10 years.

The latest boom in the stock market has taken this measure above 25—an alarming level. The market topped 25 on the Shiller P/E just before the great Crash of 1929, for example, and before the 2000-2002 and 2007-2009 slumps. A Shiller P/E above 20 has usually been associated with poor stock-market returns over the following decade.

3/23: Alzheimers

 

Today's Caregiver magazine - Educational Infographic

The Alzheimer's Test

If a test was available to determine
if you will develop Alzheimer’s
within the next 10 years,

WOULD YOU TAKE IT?

YES: 89.08%; NO: 10.92
IF YES, WHY?
IF NO, WHY?

Today's Caregiver

Source: Caregiver.com

Today's Caregiver

Today's Caregiver



3/23:



3/20: Productivity and income




3/19: Alzheimers

Meet Them Where They are

by Malika Brown, MSW, LSW

Oh boy, there goes mom again: “I want to go home! Take me home!” She actually is home, but she wants to go back to her home from childhood.

“Delores, come here!” Her sister’s name was Delores, but your name is Elaine, and her sister passed away long ago.

“I WILL NOT GET IN THAT SHOWER! LEAVE ME ALONE!”

These are just some examples of what caregivers go through when living with a loved one with Alzheimer’s disease. It is very difficult to understand why our parents or spouses, once alert, intelligent, lively people, cannot even remember our names anymore. We want them to snap out of it, to come back to reality: “For the one hundredth time, you are home, Mom. My name is not Delores; I’m your daughter Elaine; don’t you remember? You WILL get in that shower; you cannot walk around stinky all day!” Everyone gets frustrated because no matter how hard you try, they just don’t seem to ‘get it.’

While it is natural for us to want them to come back to our reality, many times, it may be easier to go into theirs. Alzheimer’s patients don’t remember recent events anymore because they can’t, no matter how many times we tell them, and no matter how hard they try. That’s what this illness is all about.

However, would it hurt us to go back to their reality? What is your mom, dad, or spouse thinking or feeling when they mistake you for their sister or brother? Why won’t they take a shower? Why do they want to go back to their childhood home?
Instead of becoming frustrated and angry at something that your loved one cannot control, step into their world, just for that moment. For example, ask your loved one “You have to go home? Is it important for you to go home? What do you have to do there?” This may just give you an insight into your loved one’s past that you never knew before. This will also allow them to talk about something that has been on their minds, but they really didn’t know why.

Another example could be “Do you miss Delores? What did you like best about her?” Again, this will allow your loved one to reminisce, and it will allow you to have an intimate moment with your loved one. 

Many times, people with Alzheimer’s disease don’t like the shower because the showerhead water comes down from above and scares them. This happens because their visual cues don’t work the same as ours. This can be handled by letting the water run from the faucet below, or giving a sponge bath instead of a shower.

Although these tips won’t work all the time, they may work some of the time. Easing the stress of you and your loved one will allow more quality time to spend with each other, a more trusting, intimate bond, and a better understanding of what’s on their minds. Remember, they’re not doing this on purpose; they do love you and they are trying the best they can.



3/18: Kitces on commission and fee.

This is really sad and has been so for over 20 years.  Any CFP, NAPFA, FPA, CPA PFS in CA (and in many other states) can even represent themselves as a fee planner since it is a clear statement/inference that they are legal to do so. Not so. As a fee investment adviser perhaps- but not as a financial planner. 

For 15 years I was the only CFP in CA who could offer comprehensive fee planning.

 
3.18: Shows the impact of smoking



3/17: Obviously there was no fraud   What a pile of crap

“We found that, despite public statements by the Financial Fraud Enforcement Task Force and the department about the importance of pursuing financial fraud cases, including mortgage fraud, the F.B.I. Criminal Investigative Division ranked complex financial crimes as the lowest of the six ranked criminal threats within its area of responsibility, and ranked mortgage fraud as the lowest subcategory threat within the complex financial crimes category. Additionally, we found mortgage fraud to be a low priority, or not listed as a priority, for F.B.I. field offices in the locations we visited, including Baltimore, Los Angeles, Miami, and New York.”

Even when investigators decided to pursue cases, they wound up closing many of them after doing little work. In fiscal 2011, for example, F.B.I. field offices closed 747 mortgage fraud cases without prosecution, the report found. Most were shuttered “with minimal or no investigation conducted.”

3/17: Taper and prices

average home prices rose roughly 10 percent in 2013 while the S.&P. 500 index surged more than 30 percent, disproportionately benefiting those who held stock. And, of course, those with neither home equity nor financial assets fell further behind those who own both.

The Fed’s report, “Financial Accounts of the United States,” broke down the figures this way: While the total value of real estate in the United States increased $2.3 trillion, the total value of stocks grew by $5.6 trillion.



3/17: Deadliest professions



3/16: CFPs
As of the end of February, there were 69,440 CFP certificants; 23% are female, and 70% are age 40 to 70. California has the largest number (7,890) of CFPs, with Florida coming in second at 4,725 and Texas third with 4,689

3/16:


3/16: First time ever

FINRA makes Suitability a Priority in 2014

 

In January, FINRA placed "suitability" on its annual list of its regulatory and examination priorities for 2014. A FINRA letter to broker/dealer members noted that its concerns in this area include "the suitability of recommendations to retail investors for complex products whose risk-return profiles, including their sensitivity to interest rate changes, underlying product or index volatility, fee structures or complexity may be challenging for investors to understand."


EFM- but not possible when the fundamentals of investing have never been taught to a broker or RIA.


3/13:

Most Americans Don't Think The Stock Market Rally Impacted Their Financial Well-Being (Bloomberg)

A Bloomberg National Poll found that 77% of those surveyed said the bull market in stocks "had little or no effect on their financial well-being," reports David Lynch at Bloomberg. Wealthy families also have a disproportionately higher percent of their annual income from capital gains, interest and dividends. From Lynch: "The wealthiest 10 percent of families earn 11 percent of their annual income from capital gains, interest and dividends, according to the Fed. The poorest three-quarters get less than 0.5 percent of their income from such sources."

3/13: Margin debt
\

3:13

Investors Understand Diversification But They Seem To Think Advisors Are Soothsayers And That's Concerning (Vanguard)

Joel Dickson, a senior investment strategist and a principal in Vanguard, said investors understand the importance of diversification. The problem is that they "have expectations that their advisors are soothsayers that are going to be able to predict which market at the exact right time is going to perform well or perform badly, and modify their portfolios."

Having attended the Inside ETF conference this winter, he said advisors discussed what advisor value proposition is. "…It is that building of long-term strategic balanced portfolios to meet investors’ goals, but then doing all of those other things that actually provide value in which you can control the outcome better—like taxes, sticking to the asset allocation, rebalancing, all of those types of elements are ways to demonstrate the value. So it gave us an opportunity to talk about the re-framing of the value proposition because ultimately if you’re just hanging your hat on being in the right place at the right time, you’re going to be wrong at some point. It’s just the nature of the financial markets."



3/12:Pay gap



3/12: Just for info



3/11: Let's be careful out there: Seth Klarman

“Any year in which the S&P 500 jumps 32 per cent and the Nasdaq 40 per cent while corporate earnings barely increase should be a cause for concern, not for further exuberance

When the markets reverse, everything investors thought they knew will be turned upside down and inside out. ‘Buy the dips’ will be replaced with ‘what was I thinking?’ . . .  Anyone who is poorly positioned and ill-prepared will find there’s a long way to fall. Few, if any, will escape unscathed.”


3/10: Where retirement is worse

only four out of ten Latinos and about five out of ten Asians and blacks work for employers that sponsor retirement plans, compared to six out of ten white employees. With low access to retirement plans and low wages, what we’re ultimately seeing is little if any retirement savings among people of color,”

3/10: hedge fund correlation
The present study aimed to analyze the correlations between hedge funds and passive asset
classes (bonds and equities) over economic cycles containing critical events for hedge funds,
such as the Asian crisis in 1998, the bursting of the technology bubble in 2000, and the subprime
mortgage crisis in 2007. The results indicate that, in general, some hedge funds tend to
outperform the examined passive benchmarks, making them seem very attractive from the
point of view of investors. Institutional investors and high-net-worth individuals have put
significant amounts of money into hedge funds, seeking the high returns and diversification
benefits promised by hedge fund managers (see Fung et al., 2008). However, during the subprime
mortgage crisis, the hedge fund industry was unable to generate positive returns
(independent of market conditions). Hence, in contrast to other research (Fung and Hsieh,
1997; Kat and Lu, 2002), this study finds that hedge funds have greater correlations with
passive asset classes than previously thought, especially during periods of recession. Although
there is evidence that hedge funds are affected by financial market distress, it seems that
hedge funds have been more significantly impacted by the recent financial crisis than by
previous stress events. In future research, we hope to discuss potential reasons for the
increased sensitivity of hedge funds to market distress, including the increasing size

3/10; 
  1. Are hedge funds uncorrelated with financial markets? An empirical assessment

Date:

2014-02-25

By:

Khaled Guesmi
Saoussen Jebri
Abdelkarim Jabri
Frédéric Teulon

URL:

http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-103&r=fmk

In this paper, we examine the correlations between hedge fund strategy indices and asset classes. Based on the Dynamic Conditional Correlation (DCC) GARCH Model, we estimate the correlations between hedge fund, stock, and bond indices during bull and bear markets. The results reveal that there are significant correlations between hedge funds and the stock market, especially during the recent financial crisis that took place from 2007 to 2009.




3/9"




3/9: I am still not impressed with our economics overall but at least it is a positive sign

US adds 175,000 jobs in February

 

The US added 175,000 jobs in February, topping expectations, even as winter's slush and frigid temperatures kept thousands of Americans from finding work. The unemployment rate edged up to 6.7 per cent.

Economists on Wall Street expected the country to add 149,000 new jobs during the month, after a 129,000 gain in January. Unemployment was forecast to remain unchanged at 6.6 per cent.

Investors tempered their February expectations after severe weather pummeled the midwest and US northeast and a separate report from payroll processing firm ADP fell below market forecasts.




3/9: S&P 500



3/9: higher education?????




3/9: Surprising Predictors of How Long You Will Live


3/9: How Will the New RP-2014 Mortality Tables Affect My DB Plan? (PDF)
"Updating to the new mortality tables will raise the assumed lifetime of plan participants, which will in turn increase a DB plan's total expected benefit payments and lengthen the plan's time horizon. Sponsors should be aware that this change will likely have the following knock-on effects: [1] Higher contribution requirements; [2] Lower balance sheet funded status; [3] Pricier lump-sum payouts; [4] Higher PBGC variable rate premium."


3/9: Alternative investments (FT)

Investors are being pushed further up the risk scale into illiquid assets in search of higher returns, even though interest rates look likely to rise within the next year.

New funds are coming to market investing in illiquid areas such as distressed debt, property and asset classes once dubbed “toxic”, such as mortgage-backed securities. Investors are being offered yields above 5 per cent and high total returns.


3/9: Alzheimers
Research found that medical staff often lists people's immediate cause of death, such as pneumonia, on death certificates, when Alzheimer's was the underlying cause. If properly accounted for, Alzheimer's could rival heart disease and cancer as a leading cause of death

researchers followed 2,566 people between the ages 65 and older who had yearly tests for dementia. After about eight years, 1,090 of the participants died, and 559 of the participants who did not have dementia at the start of the study developed Alzheimer’s disease. The death rate among participants was four times higher after a diagnosis of Alzheimer’s in people between 75 to 84, and almost three times higher in people over age 85.

The researchers say this equates to an estimated 503,400 deaths from Alzheimer’s in Americans over age 75 in 2010. This is six times greater than the 83,494 deaths from Alzheimer’s disease the CDC reported. Currently, Alzheimer’s is the sixth leading cause of death in the U.S., according to the CDC. Heart disease and cancer are numbers one and two, at 597,689 and 574,743 deaths, respectively.

3/7: Bell shaped curve

This practice creates the following outcomes:

  • First, we ration the number of "high performance ratings." If you use a five point scale (similar to grades), many companies say that "no more than 10% of the population gets a rating of 1" and "10% of the population must be rated a 5."
  • Second, we force the bottom 10% to get a low rating, creating "losers" in the group. So if your team is all high performers, someone is still at the bottom. (The "idea" behind this is that we'll continuously improve by lopping off the bottom.)
  • Third, most of the people are always in the middle - rated more or less "average." And implicit in this last assumption is the idea that most of the money and rewards go to the middle of the curve.

Does the World Really Work This Way?

The answer is no.

Research conducted in 2011 and 2012 by Ernest O’Boyle Jr. and Herman Aguinis (633,263 researchers, entertainers, politicians, and athletes in a total of 198 samples). found that performance in 94 percent of these groups did not follow a normal distribution. Rather these groups fall into what is called a "Power Law" distribution.



A "Power Law" distribution is also known as a "long tail." It indicates that people are not "normally distributed." In this statistical model there are a small number of people who are "hyper high performers," a broad swath of people who are "good performers" and a smaller number of people who are "low performers." It essentially accounts for a much wider variation in performance among the sample.

It has very different characteristics from the Bell Curve. In the Power Curve most people fall below the mean (slightly). Roughly 10-15% of the population are above the average (often far above the average), a large population are slightly below average, and a small group are far below average. So the concept of "average" becomes meaningless.

In fact the implication is that comparing to "average" isn't very useful at all, because the small number of people who are "hyper-performers" accommodate for a very high percentage of the total business value.

3/6: Suck on this
Every year 160,340 Americans die of lung cancer.

(That's more than prostate, pancreatic, breast and colon cancers combined.)


This is too true to be funny.
 ???????
The next time you hear a politician use the
Word 'billion' in a casual manner, think about
whether you want the 'politicians' spending
YOUR tax money.

A billion is a difficult number to comprehend,
But one advertising agency did a good job of
Putting that figure into some perspective in
One of its releases.

A.

A billion seconds ago it was 1959.

B.

A billion minutes ago Jesus was alive.

C.

A billion hours ago our ancestors were
living in the Stone Age.

D.

A billion days ago no-one walked on the earth on two feet.

E.
A billion dollars ago was only 8 hours and 20 minutes, at the rate our government
is spending it.


While this thought is still fresh in our brain....
let's take a look at New Orleans ....
It's amazing what you can learn with some simple division.


Louisiana Senator,
Mary Landrieu (D)
was asking Congress for
250
BILLION DOLLARS
To
rebuild New Orleans. Interesting number....
What does it mean?

A.

Well.... If you are one of the 484,674 residents of New Orleans
(every man, woman and child)
You each get $516,528

B.

Or.... If you have one of the 188,251 homes in
New Orleans , your home gets $1,329,787.

C.

Or.... If you are a family of four....
Your family gets $2,066,012.

Washington, D.C.

HELLO!

Are all your calculators broken??

Building Permit Tax
CDL License Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Federal Income Tax (Fed)
Federal Unemployment Tax (FU TA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Tax
Hunting License Tax
Inheritance Tax
Inventory Tax
IRS Interest Charges (tax on top of tax)
IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Tax
Marriage License Tax
Medicare Tax
Property Tax
Real Estate Tax
Service charge Taxes
Social Security Tax
Road Usage Tax (Truckers)
Sales Taxes
Recreational Vehicle Tax
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal Universal Service Fee Tax
Telephone Federal, State and Local Surcharge Tax
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Non-recurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Tax
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax
(And to think, we left British Rule to avoid so many taxes)


STILL THINK THIS IS FUNNY?

Not one of these taxes existed 100 years ago....
And our nation was the most prosperous in the world.

We had absolutely no national debt....
We had the largest middle class in the world....
And Mom stayed home to raise the kids.


What happened?
Can you spell

'Politicians'!

And I still have to
Press '1'
For English.


I hope this goes around
the
U
SA
At least 100 times

What the - - - - has happened to our country?????


3/5: Employees Ease Off on Using Investment Advisors
"The use of advisors to dispense retirement-related advice dipped slightly in 2013 for the first time since 2007 as the stock market performed well and volatility eased ... 33 percent of employees with 401(k)s used an advisor, down from 36 percent who used an advisor in 2012. The percentage of employees using an advisor had been rising steadily since 2007, when 24 percent of 401(k) plan participants used an advisor."

3/5: Gross


3/5:

Caring For A Stroke Survivor
With Sleep Apnea

By Deirdre Stewart, RN, PhD

 

Sleep apnea is common in stroke survivors. Recent studies suggest that as many as 65% of stroke sufferers experience some degree of sleep apnea. According to a leading researcher and physician in the field of sleep-disordered breathing, Mark E. Dyken, MD, University of Iowa, this high rate of sleep apnea in stroke survivors “requires aggressive assessment.” Because data suggest that rehabilitation outcomes may be worse in stroke sufferers who have sleep apnea, it is of particular importance to identify it.

Overview of sleep apnea

Normally during sleep the muscles which control the tongue and soft palate hold the airway open. As these muscles relax, the airway becomes narrower, which can cause snoring and breathing difficulties. In some cases, these muscles relax too much, which causes the airway to become completely blocked, preventing any airflow. Once the airway has closed and no breathing is occurring (apnea), the brain realizes that there is a lack of oxygen and alerts the body to wake up. Though the sufferer is often not aware of it, this cycle can occur several hundreds of times each night, severely disrupting sleep. This is sleep apnea.

The impact of sleep apnea on health

Each time an apnea ends, there is a surge in heart rate and blood pressure. These changes, as well as drops in oxygen levels that result from sleep apnea, have been identified in the progression of high blood pressure, heart disease, congestive heart failure, transient ischemic attacks (TIAs), and stroke.

Treating sleep apnea

Sleep apnea is commonly treated with positive airway pressure (PAP). PAP is administered via a nasal mask that is connected to a flow generator, or blower. The flow generator delivers a lightly pressurized stream of air that supports the muscles in the throat during sleep. There are many types of flow generators, but for stroke survivors with sleep apnea, the best type of PAP is automatic. Automatic positive airway pressure devices adjust the strength of air that they blow throughout the night, to provide the least amount of air necessary to support the airway breath by breath. In a sense, automatic PAP devices provide customized treatment based on the individual needs of each unique patient.

Caring for stroke survivors with sleep apnea

For stroke survivors, this customized treatment is especially important. Stroke can affect the severity of sleep apnea, and as stroke survivors recover, the amount of airway pressure required to treat them may change. Automatic PAP will adjust to meet those changes. Additionally, most patients find automatic PAP more comfortable than other types of treatment. In the stroke population, comfort is a key factor of success.

For the stroke survivor who is new to positive airway pressure, adjusting to sleeping with a nasal mask and feeling the sensation of positive airway pressure will require a period of adjustment. It is crucial that an experienced sleep technician or nurse is present to help the patient in the initial stages of sleep apnea treatment. Even though PAP is a very simple type of therapy, practical problems may arise. Because stroke will often leave the survivor with physical and/or mental deficits, patients being treated for sleep apnea may need assistance putting on their nasal mask or reapplying it during the night. Also, if the stroke survivor experienced damage to areas of the brain that affect memory, they may need continual reminders of the importance of using the PAP device. The success of long-term, effective treatment will depend on how well these problems are managed in the first few weeks of treatment. Medical support, in addition to encouragement and reinforcement from stroke caregivers, will improve the patient’s acceptance of PAP.

Whether sleep apnea was diagnosed before the stroke, during stroke rehabilitation, or after discharge, caring for a stroke survivor with sleep apnea requires support from everyone involved in the care process. In some cases, stroke survivors may not feel any physical or emotional benefits from treatment, despite objective evidence of improvement. It is not uncommon for the consequences of a stroke to overshadow the relief of sleep apnea symptoms. Educating the patient and family about the nature and consequences of sleep apnea during the first few weeks of treatment after a stroke is vital. The caregivers and family members of the stroke survivor should all be informed that the benefits of sleep apnea treatment, including reduced risk of a second stroke, are worth the adjustment time. Clearly outlining treatment goals will help keep the entire care team focused on stroke recovery.

Although treating sleep apnea in stroke patients may require additional effort for caregivers, experts such as Professor of Neurology, Antonio Culebras, MD, Syracuse University agree that “application of positive pressure breathing treatment may improve the rehabilitation potential of patients post-stroke.”


There may be times when we are powerless to prevent injustice, but there must never be a time when we fail to protest.

~~Elie Wiesel, writer, Nobel laureate (b. 1928) 


3/5: Nearing the End of Life

GREAT BOOKLET.  Highly recommended.  Covers a lot of ground about upcoming death.

3/5: Fees-

a study that suggests retirement plan administration and investment-related fees lead to an average participant loss of 86 basis points compared with low-cost index funds that could be used as retirement savings vehicles.

Beyond Diversification: The Pervasive Problem of Excessive Fees and 'Dominated Funds' in 401(k) Plans


Ian Ayres


Yale University - Yale Law School; Yale University - Yale School of Management

Quinn Curtis


University of Virginia School of Law

February 21, 2014

Abstract:     
Notwithstanding ERISA’s fiduciary requirements, a wide range of plan administrators establish investment menus with options that predictably lead to substantial underperformance of retirement portfolios. Utilizing data from more than 3,000 401(k) plans with more than $120 billion in assets, we provide evidence that fees lead to an average loss of 86 basis points in excess of low cost index funds. In 16% of analyzed plans, we find that, for a young worker, the fees charged in excess of an index fund entirely consume the tax benefit of investing in a 401(k) plan. We also document a wide-array of “dominated” menu fund options where the costs of fees in holding the fund so outweigh the benefits of additional diversification that rational investors would not invest in these assets. We find that approximately 52% of plans have menus offering at least one dominated fund. In the plans that offer dominated funds, dominated funds hold 11.5% of plan assets and these dominated investments tend to be outperformed annually by their low-cost menu alternatives by more than 60 basis points. We argue that existing fiduciary duty law (aided by improved rule-making by the Department of Labor) can be used to challenge plans that imprudently expose investors to the risk of excess fees. In particular, we argue that (i) evidence of excessive fees can be powerful evidence of an imprudent fiduciary process, and (ii) fiduciaries act imprudently if they included dominated option in their menus, even if plan participants have other offerings with which to construct prudent retirement portfolios.

But because heightened fiduciary duty reforms are unlikely by themselves to solve the problem of excess fees and dominated funds, we also propose three additional structural reforms: First, we recommend that the requirements for default fund allocations be enhanced to assure that the default investment is reasonably low cost. Second, we recommend that the Department of Labor (DOL) designate certain plans as “high cost” and mandate that participants in these plans be given the option to execute in-service rollovers to low-cost plans. Finally, we recommend that participants be required to demonstrate a minimum degree of sophistication by passing a DOL-approved test before being allowed to invest in any funds that would not satisfy the enhanced default requirement.

Number of Pages in PDF File: 41

Keywords: ERISA, defined contribution, 401(k)

3/5: Life settlements=

People sell policies because this is a “needs based transaction.” According to their study 38% sell to supplement LTC, 20% sell to supplement retirement needs and 20% sell to meet current medical needs. 

3/5: Adverse care in skilled nursing home facilities




3/5

Planning For The Financial Independence
and Security of A Disabled Child

By Philip H. Mondschein, Esq

 

As an elder law attorney, I am often asked by a parent of a disabled child “How can I provide for my child’s financial needs when I am no longer alive?” People are concerned that, by leaving an inheritance directly to their disabled child, this will usually disqualify the child from most means tested public assistance programs. If the parents make an outright gift to another sibling can they be assured that this child will properly look after the disabled child? 

The solution to the problem is to create a trust known as a “supplemental needs trust” for the benefit of the disabled child. The purpose of the trust is to preserve eligibility for public assistance programs, such as Supplemental Security Income (SSI). In most states, eligibility for SSI automatically creates eligibility for Medicaid, which may be the only health insurance the disabled child is able to receive. In addition to maintaining public assistance eligibility, assets held in the supplement needs trust may be used to substantially improve the disabled child’s quality of life by providing goods and services above those provided by federal and state agencies.

There are two main types of trusts. The third party "supplemental needs trust" and the self-settled "special needs trust." The third party supplemental needs trust is a trust which is usually created with the assets of a parent or grandparent for the benefit of the disabled child. The trust may be created while the parent is alive or at death through a testamentary trust under the parent’s will or revocable trust. As long as the child cannot revoke the trust or compel distributions, assets held in the trust will not be considered an available resource and will not disqualify the child from receiving public assistance.

During the child’s lifetime, depending on the laws of your particular state, the trustees may be granted broad discretionary authority to use trust assets to purchase goods and services not otherwise available from governmental programs. These may include supplemental medical, dental, diagnostic work and treatment, nursing and attendant care, travel and entertainment, supplemental housing, support and transportation. In drafting the trust, the attorney will have to take into consideration both federal and state law. In some states the mere existence of the trustee’s ability to use trust assets to provide food, clothing or shelter will disqualify the child from receiving public benefits. However, in other states direct payments to third parties for food, clothing or shelter known as "in-kind support and maintenance" will only cause a reduction in the disabled child’s SSI for the month. 

Upon the death of the disabled child, assets held in the third party supplemental needs trust may pass to other family members and the trust is not required to reimburse the state for public assistance furnished to the disabled child under the state’s Medicaid program. 

What happens when a parent fails to create a supplemental needs trust, during lifetime or at death, and the disabled child receives their inheritance outright, or the child receives funds as a result of a personal injury award? Fortunately, all is not lost. Under the Omnibus Reconciliation Act of 1993 ("OBRA ‘93") Congress specifically authorized the transfer of assets to a self-settled special needs trust, also known as a "1396p(d)4(A) trust," as a means of preserving public benefits. Under OBRA ‘93, the trust must be funded with the assets of a disabled individual under 65 years of age, by a parent, grandparent, legal guardian or the court. As with the third party supplemental needs trust, the trustee may be granted authority to provide benefits over and above those provided by public or private financial assistance. 

The major drawback to the self-settled special needs trust is that, at the death of the beneficiary, the state will have to be reimbursed for Medicaid benefits provided to the disabled child prior to distribution of trust assets to other family members. 

In choosing a trustee to administer the trust, the family should consider the size of the trust assets, the financial ability of the individual and the expected duration of the trust. Where the assets of the trust are small the appointment of a family member who has some investment experience to serve as trustee may be the only practical solution. However, where the assets of the trust are substantial and the trust is anticipated to last for twenty or thirty years, the appointment of a corporate trustee to serve along with other family members is preferable. 

Whether the trust is created as a third party trust or a self-settled trust the advantages are many. The disabled child is able to secure immediate eligibility for public assistance such as SSI or Medicaid. While on Medicaid, the child is able to obtain services at significantly lower cost than the private pay rate. Some programs and services are only available through the Medicaid program. Even if the state Medicaid program has to be reimbursed once the trust is terminated, the availability of public assistance will permit the funds held in the trust to go further in improving the child’s quality of life. 

The attorney who drafts the supplemental needs trust must take into consideration a broad range of both public and private benefit programs, including Supplemental Security Income (SSI) and Medicaid, as well as income, gift and estate taxes issues. In addition to peace of mind, the greatest flexibility is achieved when the trust is set up by a parent or other third party either during lifetime or at death, rather than passing the funds on to the disabled child. As in many endeavors, the most successful outcome is achieved by planning ahead. 



3/4:
Long term disability-One-third of people who survive a stroke before age 50 are unable to live independently or need assistance with daily activities 10 years after their stroke, according to research in the American Heart Association journal Stroke.

About 10 percent of strokes occur in 18- and 50-year-olds.

“Even if patients seem relatively well recovered with respect to motor function, there may still be immense ‘invisible’ damage that leads to loss of independence,” said Frank-Erik de Leeuw, Ph.D., senior author of the study and associate professor of neurology at the Radboud University Nijmegen Medical Center in the Netherlands.

Researchers assessed the function of 722 people who had a first stroke when they were age 18-50. After an average follow-up of nine years, about one-third had at least moderate disability, requiring assistance for some activities. Many were also unable to conduct routine tasks independently, such as caring for themselves, doing household chores or looking after their finances.

Upon closer investigation, researchers found the rate of poor functional outcome and the ability to live independently varied by type of stroke:

  • After a transient ischemic attack (TIA, or ‘mini-stroke’), 16.8 percent had functional disability and 10.8 percent had poor skills for independence.
  • After an ischemic stroke, caused by a blood clot in the brain, 36.5 percent had functional disability and 14.6 were unable to live independently.
  • After a hemorrhagic stroke, caused by a brain bleed, 49.3 percent had functional disability and 18.2 percent didn’t have the skills for independent living.

3/4: Margin  calls????

With the S&P 500 registering a
fresh closing peak of 1,859.45 last week, margin debt – money borrowed to buy stocks – hit a record level in January,

Though margin debt has been hitting record highs in recent months, it now stands at $451bn on the NYSE, a rise of more than 20 per cent over the past year and above 2007’s peak of $381bn. Five years ago it hit a low of $173bn.

In past market peaks, excessive levels of margin debt exacerbated the subsequent slide in stocks, as investors were forced to quickly sell their holdings as prices fell, sparking a nasty downward spiral.


3/3:
  1. Estimation Error of Expected Shortfall

Date:

2014-02

By:

Imre Kondor

URL:

http://d.repec.org/n?u=RePEc:arx:papers:1402.5534&r=fmk

The problem of estimation error of Expected Shortfall is analyzed, with a view of its introduction as a global regulatory risk measure.


3/3: chaos- Mauldin

A Stable Disequilibrium

So we end up in a critical state of what Paul McCulley calls a “stable disequilibrium.” We have “players” of this game from all over the world tied inextricably together in a vast dance through investment, debt, derivatives, trade, globalization, international business and finance. Each player works hard to maximize their personal outcome and to reduce their exposure to “fingers of instability.”

But the longer the game runs, asserts Minsky, the more likely it is to end in a violent “avalanche,” as the the fingers of instability have more time to build, until the state of stable disequilibrium goes critical on us.



Oops

3/3: Credit default:

Let’s say I own a $10 million corporate bond from Big Automotive Company (BAC) in my portfolio and it pays 7%. I can go into the market and purchase a credit default swap (CDS) for (say) 2% of the face value of the bond from a large investment bank (LIB). Now I am getting a net return of 5%, but my risk is greatly reduced. LIB has insured my risk. Now LIB has a liability of $10 million on its books, which of course reduces its capital. So LIB, clever folks that they are, buy another CDS from someone else on the same bond for 1%, and thus their books are even. They own both a put and a call on $10 million in BAC bonds, so they take no hit to their capital structure. However, they do make a neat $100,000 (the difference in the buy and sell prices) for making a market in BAC credit insurance.

Now, there are hundreds of investment banks and hedge funds making markets in all sorts of credit markets, buying and selling these derivatives to thousands of various investors and funds. It is quite possible that the CDS I bought was reshuffled a few times, so that we could have five or ten times the face amount of my bond in the form of derivatives. I have seen reports that the total amount of CDs written on General Motors bonds is ten times the actual value of the bonds.

Why would this be? If a hedge fund or investment bank thinks that default insurance on General Motors is too expensive relative to the risk, they can sell the CDS and hope to make a profit when the cost of insurance goes down. This provides liquidity to the market, but it also creates a lot of connections among unrelated parties. By that I mean that I am exposed to the default risk of all the counterparties of the firm that sold me the original insurance.

How, you might ask. Because if one of LIB’s creditors defaults, that reduces the capital of LIB. Let’s say that all $10 billion of Big Automotive Company’s debt goes bad. I call up LIB and ask for my $10 million. “Not a problem,” they say, “we’ll call the person who sold us the protection, who will call the person from whom they bought protection, until we find someone who is ‘naked long’ BAC debt. Then they will pay up. Or we can hope they do.”

But if there are several debt events that happen at once, as does generally happen in a business downturn, there will be funds or banks that may not have enough capital. Why? Because banks and funds do not have to set aside reserve capital for potential losses and can leverage their exposure a great deal. Technically, they are safe, as the assets and liabilities on their books should match. But those assets are only as good as the counterparties that guarantee them.

Thus, we create potential fingers of instability with every new derivative we sell or buy, as we get connected to market players we have never heard of. Let’s read the following paragraph from the introduction to the Chichilnisky paper:

Markets can magnify risk. As new assets [like CDS] are introduced, a creditor who is a victim of default in one transaction is unable to deliver in another, thereby causing default elsewhere. In this manner default by one individual leads, through a web of obligations, to a large number of defaults. Since new instruments create new webs of obligations, financial innovation is the precipitating factor. The transmission of default from one trader to another and from one market to another transmits individual risk and magnifies it into collective risk. Default by one individual leads to a collective risk of widespread default.


Another conclusion of the Chichilnisky paper is that the more we create new financial instruments, the more likely it is we will have systemic problems. And since we are creating them at an ever faster pace, and tying more and more market players together, we are sowing the seeds of another Black Swan event that will crop up somewhere, leading to yet another crisis.

3/2: ADVANCE CARE PLANNING FOR SERIOUS ILLNESS



3/2: Poverty

The U.S. Census Bureau showed a poverty rate of 27.2 percent in black households and 25.6 percent for Hispanic households in 2012, compared with 12.7 percent in white and 11.7 percent in Asian households.

"The president, I think, is uniquely qualified to talk about this. "The president is part African-American. The president did not have a father growing up

EFM- and there is the bulk of the problem. A one parent family.

"Preliminary 2012 data indicate that 40.7 percent of all 2012 births were out-of-wedlock, and there are vast differences among racial and ethnic groups. Among non-Hispanic blacks, the figure is highest, at 72.2 percent; for American Indians/Alaska Natives, it’s 66.9 percent; 53.5 percent for Hispanics; 29.4 percent for non-Hispanic whites; and a mere 17.1 percent for Asians/Pacific Islanders.

See Moynihan below. Also check bill cosby


History of the world in two minutes
Fascinating


3/2: Hospice Care

3/2:

  1. The Effect of Behavioral Codes and Gender on Honesty

Date:

2014-02

By:

Arbel, Yuval (School of Business, Carmel Academic Center)
Bar-El, Ronen (Open University of Israel)
Siniver, Erez (College of Management, Rishon Lezion Campus)
Tobol, Yossi (Jerusalem College of Technology (JTC))

URL:

http://d.repec.org/n?u=RePEc:iza:izadps:dp7946&r=cbe

We examine the effect of adherence to behavioral codes, as measured by the degree of religiosity, on the level of honesty by conducting under-the-cup die experiments. The findings suggest that behavioral codes, which prohibit lying, offset the monetary incentive to lie. The highest level of honesty is found among young religious females while the lowest is found among secular females. Moreover, when the monetary incentive to lie is removed, the tendency of secular subjects to lie disappears. Given the strict separation between the secular and religious education systems the research findings confirm the importance of education in instilling ethical values.

Keywords:

honesty, religion, behavioral codes, ethical values


3/2: Great communication skills


One-third (33 percent) of Americans who take part in an employer-sponsored retirement plan say they are not familiar with its investment options, and another 36 percent believe they have too many or too few choices.


There is a significant difference between males and females in terms of familiarity. Thirty-seven percent of women said they are not familiar with their investment choices compared to 29 percent of men. And there are differences among generations, with 43 percent of Gen Y respondents saying they are not familiar with their plans compared to just 24 percent of baby boomers.

EFM_ many are lying about their knowledge= mostly men.


The good news is that plan sponsors have the opportunity to help employees navigate their investment options. The survey showed that 81 percent of respondents trust financial information offered by their employer.

EFM- then why did their employer tell them about the upcoming recessions in 2000 and 2008?????



Ate them for years

3/2: Interesting Times
The use of models is wonderfully comforting to the human animal because it’s what we do in our own minds and our own groups and tribes all the time. We can’t help ourselves from applying simplifying models in our lives because we are evolved and trained to do just that. But models are most useful in normal times, where the inherent informational trade-off between modeling power and modeling comprehensiveness isn’t a big concern and where historical patterns don’t break. Unfortunately we are living in decidedly abnormal times, a time where simplifications can blind us to structural change and where models create a risk that cannot be resolved by more or better modeling!

It’s not a matter of using a different model or improving the model that we have. It’s the risk that ALL economic models pose when a bedrock assumption about politics or society shifts. If you’re not prepared to look past your model…if you’re not prepared, as Steinbeck wrote, to separate your observations from your preconceptions…then you have a big invisible risk in your portfolio.

I know it’s hard to embrace what I’m describing as a profound agnosticism about the mechanics of how the world works. I know it goes against our biological grain to reject the comfort and succor of a deterministic model and an Answer. In many respects, deep agnosticism is the ultimate Other. It is a non-human perspective on how to think about the world – a Rakshasa – and I’m not expecting it to receive a warm or trusting welcome, particularly when it has the skin of some familiar investment product.

But I think it’s the right way to look at a world wracked by political fragmentation, saddled with enormous debts, and engaged in the greatest monetary policy experiments ever devised by man. I think it’s the right way to look at a world of massive uncertainty, as opposed to a world of merely substantial risk

3/2: Why the market moved- Ben Hunt. (Great insight)

The inherent problem is that any market movement is over-determined. There are far more reasons that might account for a market move than actually account for the move, and that's without any consideration of stochastic factors or game-playing behaviors. But the questions of "Why is the market up?" or "Why is the market down?" are the only questions that matter in the heat of a big move up or a big move down, and no one who is in the business of answering such questions is ever going to say "I don't know" or "no reason". You MUST provide an acceptable answer, or whoever is asking the question is quickly going to find someone else to replace you. Fortunately, you can't be proved wrong if you ascribe market causality to a contemporaneous event, so it's the totally safe play to say that the November 24th 2008 market was up “because” of Geithner. And once a prominent opinion-leader like the WSJ says it's true, it's not only a safe answer…it's the only answer that’s safe.
The ability to convince someone that you know WHY a security is up or a security is down is at the heart of the entire financial advisory industry, maybe the entire financial services sector. It is the Power of Why, and it has no inherent connection to any true causal connection or the way the world truly works. Maybe it’s all true. Probably it’s partially true. But it really doesn’t matter one way or another.
Once you start thinking of everything communicated by humans as a signal, as an intentional effort to make you see the world differently than you saw it before, your world will change. This is the great insight of Information Theory – that information is measured by how much it changes your mind, that the strength of any communication has nothing to do with truth or accuracy, but only with the subjective impact it has on your perceptions – and it’s an enormously useful insight for making sense of markets.


3/2: Remarkable drop in cash-
China is rapidly ditching the centuries-old habit of paying its bills with trunkloads of cash, and making the shift to virtual forms of payment faster than any other country on earth.

Figures released by the People’s Bank of China show a sharp rise in the popularity of anything other than cash – from debit cards to credit cards to electronic wallet mobile apps. China has a staggering 4.2bn bank cards in circulation, enough for every mainlander to have at least three.

Ten times more of them are debit cards than credit cards (3.8bn compared with 391m), but credit card issuance also rose by 19 per cent in 2013, and Euromonitor predicts credit card usage will grow faster than that of other cards over the next five years. Overdue credit card debt – unpaid after six months – also leapt 72 per cent, but this is hardly US-style household debt: China’s overdue credit card debt is a mere 1.37 per cent of total credit outstanding.

The shift away from cash is remarkable for a country which was the first to print paper money a millennium ago: until recently, cash was so popular in China that even large purchases like cars or houses were paid for with bundles of banknotes bearing the portrait of Mao Zedong.

3/2: BIG DROP The US economy grew at a slower pace in the last quarter of 2013 than initially estimated, extending a string of weak data that could raise pressure on the Federal Reserve to reconsider its “tapering” of bond purchases.

Fourth-quarter gross domestic product was revised to annualised rate of 2.4 per cent, down sharply from the previous 3.2 per cent estimate which was made when the Fed started slowing its quantitative easing programme.


Teamwork
Fascinating- you will need to look at this several times

3/2:


3/2:

How Men And Women Invest Differently

3/2:

3/2: Say it isn't so!!!!!

In the report titled "The Stock Picking Skills of SEC Employees," researchers found that SEC employees' stock purchases look like your average person's. But when these employees sell their stocks, they appear to systematically beat the market by making sales within weeks of costly enforcement actions by the agency.

"These results suggest that SEC employees potentially trade profitably under the new rules, and that at least some of their profits potentially stem from trading ahead of costly SEC sanctions and on privileged non-public information,"


3/2: Caregiving 101
By Michael Plontz

A family member has just been diagnosed with an illness that will eventually require round-the-clock care. Of course you want to be the one giving that care. This decision is usually made without hesitation; of course we want to be our loved one’s caregiver. Who else could take better care of them? However, when the reality of your decision sinks in, your head will be swimming with uncertainty, anxiety, and maybe even fear. Certainly you will have many questions. Welcome to Caregiving 101, a primer for first-time caregivers.

First of all, arm yourself with knowledge. An old maxim states that “Knowledge is power,” and it’s true. Knowledge will empower you to take the best care of your loved one and yourself. Learn all that you can about your loved one’s condition, illness or disease. There are local branches of national organizations like the Alzheimer’s Association and the Cancer Society all over the country. Use them as a tool to find out all about your loved one’s present condition and what the future may hold for both of you.

Another reason to learn is to take better care of your loved one. You may educate yourself through health care manuals, books and videos. The Internet is also a good source of information, but navigate carefully through that material because not all of it is valid. Also, ask lots of questions of your health care professionals. They are the best people to show you proper techniques like transferring, lifting and bathing. When you learn all that you can, you will be more confident in your caregiving abilities.

Caregiving can be an isolating experience, so it’s helpful to talk to others who are, or have been, in your shoes. You will feel that you are a part of a growing community of caregivers. You may also learn about options and community resources that you were not aware of from other caregivers. These people can also help with difficult decisions concerning your loved one. Determining your responsibilities will probably be one of the first things you struggle with, so talk to others who’ve been there before.

You must remember to take regular breaks from your caregiving responsibilities. You can’t be good to someone else if you’re not good to yourself. Use your relatives. They can help in several ways—financially, socially, and as respite support. If relatives are unavailable or do not exist, try community services like a volunteer group at your local church. Try and follow these guidelines for caregiving breaks: take half-an-hour a day to practice yoga, meditation, needlepoint, reading, etc.; spend a couple of hours a week away from the house at the mall, coffeehouse, library, etc.; monthly you should have an evening out with friends, go to a play or concert, etc.; on a yearly basis you should go on a well-planned (and well-deserved) vacation. These guidelines will help in avoiding “caregiver burnout.”

Your community most likely has organizations about which you never gave a second thought until now. These may include, but are not limited to, Meals on Wheels, day care centers, and home care agencies. If applicable, contact your local Area Agency on Aging for a list of services and organizations. Your local medical supply store may have gadgets and devices to enhance your loved one’s abilities, at the same time making your life a little easier. You might also inquire about local, state or federal programs that might provide financial aid for you and your loved one. As needs increase, so do costs. Understanding which programs can help and what you can afford, will allow you to plan for the future.

One way to deal with the emotional roller coaster you may experience is to get your feelings down on paper. Some journal entries might address the following subjects: How do you feel now? What are your fears and/or concerns? What outcomes would you like? What losses have you noticed so far? What changes in your relationship with your loved one have cause you to feel sad? What changes have given you comfort? Journaling is a healthy way to put your feelings “out there” and to possibly alleviate some of the anger, frustration and helplessness you may be feeling.

Caregiving need not be a lonely and emotionally debilitating experience. According to the latest statistics on caregiving for the National Family Caregivers Association, nearly half of the U. S. population has a chronic condition. From that number 41 million are limited in their daily activities while 12 million are unable to live independently or even leave the house. One can deduce from these numbers that there are millions of family caregivers out there. So keep in mind that you are not alone, and best of luck to you and your loved one.




Construction approved by OSHA

3/2: PALLIATIVE OR COMFORT CARE

3/2: Inequality






The share of income going to the top 1 percent of earners has increased sharply. A rising share of output is going to profits. Real wages are stagnant. Family incomes have not risen as fast as productivity. The cumulative effect of all these developments is that the US may well be on the way to becoming a Downton Abbey economy.  Larry Summers

3/2:



3/2:

This means that other countries will take over some work with cheaper labor. Immediate repercussions on China? Don't know. But over time, slower growth.





2/27: pension  shortfall




2/27: Protecting Your Finances If a Disaster Strikes: Are You Prepared?



2/27:
CAPE High CAPE values occur infrequently within the historical range of possibilities.
  • There have been 57 monthly observations since 1926 (5.6% of all observations) when the CAPE measured 30.0 or more, 55 of which occurred during the boom-to-bust stock market cycle between 1997 and 2002.
  • The average annualized return for all 3-year holding periods that began with a CAPE of 24 or higher has been 2.85%, while the average return for all 5-year periods was 1.88%.
  • Of the 152 3-year measurement periods that began with a CAPE of 24 or more, 49% resulted in a negative cumulative return, while 42% of all 5-year periods were negative.
  • Investors may choose to adjust the data to reflect structural changes like those Jeremy Siegel describes (i.e., a CAPE of 25 today might be similar to a historical CAPE of 22, or some other estimate).

 

U.S. Stock Market Returns Following “Expensive” Pre-Conditions:
Every 3-Year and 5-Year Holding Period with a Beginning CAPE of 24 or More
1926 to 2013


Beginning

Beginning

3-Year

Ending

 

Beginning

Beginning

5-Year

Ending

Date

CAPE

Return

CAPE

 

Date

CAPE

Return

CAPE

1928.11

25.12

-54.5%

11.42

*

1928.11

25.12

-46.0%

12.01

1928.12

25.30

-61.0%

9.31

*

1928.12

25.30

-44.9%

12.28

1929.01

27.08

-64.2%

9.31

*

1929.01

27.08

-42.4%

13.03

1929.02

27.13

-62.1%

9.34

*

1929.02

27.13

-44.1%

13.93

1929.03

27.68

-66.4%

9.41

*

1929.03

27.68

-44.1%

13.25

1929.04

27.57

-73.6%

7.19

*

1929.04

27.57

-46.4%

13.52

1929.05

27.70

-78.6%

6.39

*

1929.05

27.70

-48.5%

12.18

1929.06

27.94

-80.8%

5.57

*

1929.06

27.94

-52.7%

12.29

1929.07

29.93

-74.7%

5.84

*

1929.07

29.93

-59.9%

11.74

1929.08

31.48

-68.2%

8.83

*

1929.08

31.48

-61.5%

11.32

1929.09

32.56

-67.8%

9.76

*

1929.09

32.56

-59.7%

10.91

1929.10

28.96

-65.3%

8.48

*

1929.10

28.96

-51.2%

11.11

1930.03

24.59

-71.6%

7.87

*

1930.03

24.59

-54.8%

10.40

1930.04

25.84

-59.1%

8.72

*

1930.04

25.84

-50.0%

11.10

1930.05

24.31

-51.8%

11.25

*

1930.05

24.31

-47.4%

11.99

1966.01

24.06

22.3%

21.19

*

1966.01

24.06

22.2%

16.46

1995.11

24.35

103.1%

37.37

*

1995.11

24.35

135.2%

38.78

1995.12

25.03

110.8%

38.82

*

1995.12

25.03

131.9%

37.28

1996.01

24.76

112.4%

40.58

*

1996.01

24.76

132.3%

36.98

1996.02

25.98

103.9%

40.40

*

1996.02

25.98

109.2%

35.84

1996.03

25.63

110.0%

41.36

*

1996.03

25.63

94.1%

32.33

1996.04

25.43

115.0%

42.71

*

1996.04

25.43

106.1%

32.17

1996.05

25.81

104.6%

42.56

*

1996.05

25.81

102.3%

34.08

1996.06

25.97

115.2%

42.18

*

1996.06

25.97

96.6%

33.07

1996.07

24.86

118.1%

43.83

*

1996.07

24.86

103.7%

32.16

1996.08

25.41

112.5%

41.93

*

1996.08

25.41

87.0%

31.40

1996.09

25.68

95.7%

41.32

*

1996.09

25.68

62.8%

27.67

1996.10

26.48

102.5%

40.55

*

1996.10

26.48

61.4%

28.58

1996.11

27.59

92.1%

43.21

*

1996.11

27.59

61.6%

30.01

1996.12

27.72

107.5%

44.20

*

1996.12

27.72

66.3%

30.50

1997.01

28.33

85.5%

43.77

*

1997.01

28.33

54.3%

30.28

1997.02

29.27

80.6%

42.19

*

1997.02

29.27

50.1%

29.09

1997.03

28.80

106.7%

43.22

*

1997.03

28.80

62.4%

30.29

1997.04

27.59

89.2%

43.53

*

1997.04

27.59

44.0%

29.01

1997.05

29.93

74.7%

41.97

*

1997.05

29.93

34.7%

28.13

1997.06

31.26

71.4%

42.78

*

1997.06

31.26

19.8%

26.39

1997.07

32.77

56.3%

42.76

*

1997.07

32.77

2.3%

23.46

1997.08

32.59

75.8%

42.87

*

1997.08

32.59

9.1%

23.59

1997.09

32.67

57.9%

41.90

*

1997.09

32.67

-7.8%

22.36

1997.10

32.90

62.7%

39.37

*

1997.10

32.90

3.8%

21.95

1997.11

32.34

43.2%

38.78

*

1997.11

32.34

5.0%

23.34

1997.12

33.03

41.5%

37.28

*

1997.12

33.03

-2.8%

23.10

1998.01

32.86

44.9%

36.98

*

1998.01

32.86

-6.4%

22.89

1998.02

34.71

22.9%

35.84

*

1998.02

34.71

-14.0%

21.21

1998.03

36.30

9.5%

32.33

*

1998.03

36.30

-17.4%

21.31

1998.04

37.28

16.8%

32.17

*

1998.04

37.28

-11.5%

22.42

1998.05

36.96

19.6%

34.08

*

1998.05

36.96

-5.2%

23.59

1998.06

36.80

12.2%

33.07

*

1998.06

36.80

-7.7%

24.83

1998.07

38.26

12.3%

32.16

*

1998.07

38.26

-5.1%

24.86

1998.08

35.42

23.0%

31.40

*

1998.08

35.42

13.1%

24.64

1998.09

33.53

6.3%

27.67

*

1998.09

33.53

5.1%

25.24

1998.10

33.77

0.2%

28.58

*

1998.10

33.77

2.7%

25.68

1998.11

37.37

1.7%

30.01

*

1998.11

37.37

-2.3%

25.94

1998.12

38.82

-3.0%

30.50

*

1998.12

38.82

-2.8%

26.63

1999.01

40.58

-8.3%

30.28

*

1999.01

40.58

-5.0%

27.65

1999.02

40.40

-7.1%

29.09

*

1999.02

40.40

-0.5%

27.65

1999.03

41.36

-7.3%

30.29

*

1999.03

41.36

-5.8%

26.88

1999.04

42.71

-16.2%

29.01

*

1999.04

42.71

-10.7%

26.90

1999.05

42.56

-14.8%

28.13

*

1999.05

42.56

-7.3%

25.90

1999.06

42.18

-25.0%

26.39

*

1999.06

42.18

-10.5%

26.40

1999.07

43.83

-28.6%

23.46

*

1999.07

43.83

-10.7%

25.69

1999.08

41.93

-27.8%

23.59

*

1999.08

41.93

-9.9%

25.17

1999.09

41.32

-33.8%

22.36

*

1999.09

41.32

-6.3%

25.66

1999.10

40.55

-32.3%

21.95

*

1999.10

40.55

-10.6%

25.41

1999.11

43.21

-29.8%

23.34

*

1999.11

43.21

-8.8%

26.46

1999.12

44.20

-37.6%

23.10

*

1999.12

44.20

-10.9%

27.14

2000.01

43.77

-36.0%

22.89

*

2000.01

43.77

-8.5%

26.58

2000.02

42.19

-35.7%

21.21

*

2000.02

42.19

-4.8%

26.74

2000.03

43.22

-40.9%

21.31

*

2000.03

43.22

-14.8%

26.33

2000.04

43.53

-34.0%

22.42

*

2000.04

43.53

-13.8%

25.40

2000.05

41.97

-29.1%

23.59

*

2000.05

41.97

-9.2%

25.64

2000.06

42.78

-29.9%

24.83

*

2000.06

42.78

-11.3%

26.06

2000.07

42.76

-27.6%

24.86

*

2000.07

42.76

-6.5%

26.28

2000.08

42.87

-30.5%

24.64

*

2000.08

42.87

-12.8%

26.10

2000.09

41.90

-27.4%

25.24

*

2000.09

41.90

-7.2%

25.72

2000.10

39.37

-22.9%

25.68

*

2000.10

39.37

-8.4%

24.87

2000.11

38.78

-15.6%

25.94

*

2000.11

38.78

3.2%

25.92

2000.12

37.28

-11.6%

26.63

*

2000.12

37.28

2.8%

26.43

2001.01

36.98

-13.1%

27.65

*

2001.01

36.98

1.9%

26.46

2001.02

35.84

-3.1%

27.65

*

2001.02

35.84

12.4%

26.24

2001.03

32.33

1.9%

26.88

*

2001.03

32.33

21.5%

26.32

2001.04

32.17

-6.9%

26.90

*

2001.04

32.17

14.2%

26.14

2001.05

34.08

-6.2%

25.90

*

2001.05

34.08

10.2%

25.64

2001.06

33.07

-2.0%

26.40

*

2001.06

33.07

13.1%

24.74

2001.07

32.16

-4.3%

25.69

*

2001.07

32.16

14.9%

24.69

2001.08

31.40

2.4%

25.17

*

2001.08

31.40

25.5%

25.04

2001.09

27.67

12.6%

25.66

*

2001.09

27.67

40.1%

25.63

2001.10

28.58

12.2%

25.41

*

2001.10

28.58

41.9%

26.53

2001.11

30.01

8.4%

26.46

*

2001.11

30.01

34.3%

26.92

2001.12

30.50

11.1%

27.14

*

2001.12

30.50

35.0%

27.27

2002.01

30.28

10.0%

26.58

*

2002.01

30.28

39.1%

27.20

2002.02

29.09

14.5%

26.74

*

2002.02

29.09

39.0%

27.31

2002.03

30.29

8.4%

26.33

*

2002.03

30.29

35.5%

26.22

2002.04

29.01

13.2%

25.40

*

2002.04

29.01

50.6%

26.97

2002.05

28.13

17.7%

25.64

*

2002.05

28.13

57.0%

27.54

2002.06

26.39

26.9%

26.06

*

2002.06

26.39

66.3%

27.41

2003.06

24.83

37.5%

24.74

*

2003.06

24.83

44.1%

22.41

2003.07

24.86

36.0%

24.69

*

2003.07

24.86

40.4%

20.90

2003.08

24.64

36.5%

25.04

*

2003.08

24.64

39.7%

21.39

2003.09

25.24

41.6%

25.63

*

2003.09

25.24

28.7%

20.36

2003.10

25.68

38.4%

26.53

*

2003.10

25.68

1.3%

16.38

2003.11

25.94

39.8%

26.92

*

2003.11

25.94

-6.8%

15.25

2003.12

26.63

34.7%

27.27

*

2003.12

26.63

-10.5%

15.37

2004.01

27.65

34.2%

27.20

*

2004.01

27.65

-19.5%

15.17

2004.02

27.65

29.8%

27.31

*

2004.02

27.65

-29.0%

14.12

2004.03

26.88

33.3%

26.22

*

2004.03

26.88

-21.6%

13.32

2004.04

26.90

41.4%

26.97

*

2004.04

26.90

-12.8%

14.98

2004.05

25.90

44.4%

27.54

*

2004.05

25.90

-9.1%

15.99

2004.06

26.40

39.3%

27.41

*

2004.06

26.40

-10.7%

16.38

2004.07

25.69

39.6%

27.40

*

2004.07

25.69

-0.6%

16.69

2004.08

25.17

41.1%

26.14

*

2004.08

25.17

2.5%

18.09

2004.09

25.66

44.8%

26.72

*

2004.09

25.66

5.2%

18.83

2004.10

25.41

44.9%

27.31

*

2004.10

25.41

1.7%

19.35

2004.11

26.46

33.4%

25.72

*

2004.11

26.46

3.6%

19.81

2004.12

27.14

28.2%

25.95

*

2004.12

27.14

2.2%

20.32

2005.01

26.58

23.5%

24.01

*

2005.01

26.58

0.9%

20.52

2005.02

26.74

17.0%

23.49

*

2005.02

26.74

1.9%

19.91

2005.03

26.33

18.6%

22.60

*

2005.03

26.33

10.0%

21.00

2005.04

25.40

26.8%

23.35

*

2005.04

25.40

13.9%

21.80

2005.05

25.64

24.5%

23.69

*

2005.05

25.64

1.6%

20.47

2005.06

26.06

13.8%

22.41

*

2005.06

26.06

-3.9%

19.73

2005.07

26.28

8.8%

20.90

*

2005.07

26.28

-0.8%

19.66

2005.08

26.10

11.4%

21.39

*

2005.08

26.10

-4.4%

19.76

2005.09

25.72

0.7%

20.36

*

2005.09

25.72

3.3%

20.37

2005.10

24.87

-14.8%

16.38

*

2005.10

24.87

9.0%

21.23

2005.11

25.92

-23.8%

15.25

*

2005.11

25.92

5.1%

21.69

2005.12

26.43

-23.0%

15.37

*

2005.12

26.43

12.0%

22.39

2006.01

26.46

-31.3%

15.17

*

2006.01

26.46

11.7%

22.97

2006.02

26.24

-38.8%

14.12

*

2006.02

26.24

15.3%

23.48

2006.03

26.32

-34.2%

13.32

*

2006.03

26.32

13.9%

22.89

2006.04

26.14

-28.9%

14.98

*

2006.04

26.14

15.7%

23.14

2006.05

25.64

-22.7%

15.99

*

2006.05

25.64

17.8%

23.05

2006.06

24.74

-22.6%

16.38

*

2006.06

24.74

15.7%

22.09

2006.07

24.69

-17.3%

16.69

*

2006.07

24.69

12.6%

22.60

2006.08

25.04

-16.3%

18.09

*

2006.08

25.04

4.0%

20.04

2006.09

25.63

-15.4%

18.83

*

2006.09

25.63

-5.7%

19.69

2006.10

26.53

-19.6%

19.35

*

2006.10

26.53

1.3%

20.15

2006.11

26.92

-16.3%

19.81

*

2006.11

26.92

-0.8%

20.34

2006.12

27.27

-15.9%

20.32

*

2006.12

27.27

-1.2%

20.52

2007.01

27.20

-20.1%

20.52

*

2007.01

27.20

1.7%

21.21

2007.02

27.31

-16.0%

19.91

*

2007.02

27.31

8.2%

21.79

2007.03

26.22

-11.9%

21.00

*

2007.03

26.22

10.5%

22.05

2007.04

26.97

-14.3%

21.80

*

2007.04

26.97

5.2%

21.77

2007.05

27.54

-23.8%

20.47

*

2007.05

27.54

-4.5%

20.93

2007.06

27.41

-26.6%

19.73

*

2007.06

27.41

1.1%

20.54

2007.07

27.40

-19.0%

19.66

*

2007.07

27.40

5.8%

20.99

2007.08

26.14

-23.8%

19.76

*

2007.08

26.14

6.6%

21.40

2007.09

26.72

-19.9%

20.37

*

2007.09

26.72

5.4%

21.78

2007.10

27.31

-18.2%

21.23

*

2007.10

27.31

1.8%

21.57

2007.11

25.72

-14.6%

21.69

*

2007.11

25.72

6.9%

20.89

2007.12

25.95

-8.3%

22.39

*

2007.12

25.95

8.6%

21.23

2008.01

24.01

-0.1%

22.97

*

2008.01

24.01

21.5%

21.90

Sources: Robert J. Shiller; Standard & Poor’s; Capital Advisors, Inc.


Keith Goddard, Channing Smith and Monty Butts lead the research team at Capital Advisors, Inc. As of Dec. 31, 2013, Capital Advisors served as manager and advisor to approximately $1.3 billion in client assets.

2/27: Ludicrous- Home prices gained 11.3% in 2013, according to S&P/Case-Shiller index,

In 2005, homebuyers’ optimism was extraordinarily high, he said. They expected 12% increases for the next 10 years, this at a time when mortgage rates were 6%.

Their optimism has been declining ever since, he said.

Most recently, they expected home prices to increase by 3% over 10 years — below the current mortgage rate of 4.3%. Today, buying a home “is not an exciting investment,” Shiller said. “Buyers think they’re going to lose.”

The latest monthly data show that only Dallas, Las Vegas, Miami, San Francisco, Tampa and Washington, D.C., posted gains in December. Miami held onto the top position with an increase of 0.9%, followed by Las Vegas, up 0.4%



NASA spy

2/26:

Wheelchair Van Shopping Tips for Caregivers
By Susan Hawkins

If you’re the caregiver for an individual who uses a wheelchair, owning a wheelchair accessible van is helpful and can be more affordable with these tips.

Family Caregiver
As the caregiver for a family member, you can choose a wheelchair van based on the needs of the person in your care. Wheelchair vans come with rear entry access or side entry access, and one can sometimes work better than the other in certain situations.

The family caregiver, as the driver of the van, can consider both styles. Side entry access means the van’s ramp deploys from one of the side-door openings. The wheelchair user can sit in the middle of the cabin just behind the front seats or in the front-passenger position when the adapted minivan has a removable front seat. The removable seat lets you to carry up to two wheelchair users at the same time. Jump seats can be added for extra seating for non-wheelchair users.

If the person uses an extra-large or extra-tall power chair, rear entry access may be the best choice. The rear door-opening width and height are larger, and the ramp is wider, too. The rear entry conversion usually features a manually operated ramp, but a power ramp can be added for an extra charge.

Professional Caregiver
Having a wheelchair van is a unique selling point for many self-employed caregivers and caregiving companies. Whether it’s taking a patient to a doctor’s appointment or providing the patient with a change of scenery, a wheelchair accessible vehicle can make a big difference.

Your patients will have different mobility devices, including power chairs and mobility scooters, so your best choice is a minivan adapted for rear entry access.
A rear entry van also has seating if a patient’s family member or two comes along.

A long-channel rear entry conversion can handle up to two passengers in wheelchairs at the same time. If you’re a self-employed caregiver or caregiving company, you’ll have a well-equipped vehicle that can be a rolling advertisement for your business.

General Shopping Tips

Tip #1: Shop around.
Check out wheelchair van dealerships online and nearby to see what they have in your price range. There are also mobility classifieds online, where individuals list only wheelchair-accessible vehicles for sale.

Tip #2: Determine your budget.
Budget is almost always a top concern for family and professional caregivers.
Today’s handicap accessible van market has three clear price levels that represent the three base van/conversion possibilities.

  • A New Van with a Brand-New Conversion. Shoppers usually pay the highest prices for a brand-new minivan equipped with a brand-new conversion.
  • A Used Van with a Brand-New Conversion. Some conversion companies buy used minivans with newer model years and low mileage, which they convert for wheelchair use. That means you can save money when you buy a used van with a brand-new conversion. You’ll find high-quality conversions in a wide range of prices.
  • A Used Van with a Used Conversion. Last, and almost always least—though only in cost—are used minivans with used accessible conversions. Online and local dealerships usually have a number of used/used accessible vehicles on hand, because their owners trade them in or sell them to upgrade to a newer model van. You can find some great deals when you buy used/used.

If you’re on a budget, look for certified-used wheelchair vans with reasonable prices, and don’t forget to negotiate.

Tip #3: Understand kneeling systems.
Many vans with wheelchair accessibility have a kneeling system. The vehicle “kneels” closer to the ground to lessen the incline. That makes entry and exit easier for the independent, manual wheelchair user. These systems can be pricey, unreliable, and unnecessary for caregivers.

Tip #4: Be Prepared with Questions for the Mobility Consultant.
Mobility consultants, online or local, should give you this information, but if not, you should be aware of the following information before you buy:

  • What warranties do you offer? Warranties vary based on the base vehicle and conversion manufacturer. Brand-new minivans are always equipped with brand-new conversions, and you should have warranties on both. Used wheelchair vans for sale may have either a new or used conversion. A new conversion should come with a satisfactory warranty, and, if there’s time remaining on the base vehicle’s original warranty, you’ll have that, too.
  • Do you deliver? If you buy from a local dealer, pick-up may be your only choice. For caregivers who buy a handicap accessible van online, delivery options are a must. Ask about the company’s different delivery choices and charges.
  • What services do you provide after the sale? Every customer should receive a detailed demonstration of the adapted van and all its features at delivery or pick-up. Nationwide conversion service is important, because you might be in a remote location when service is needed. Ask about a toll-free, 24-hour Conversion Emergency Help Line, so you’re protected nationwide. Some dealers have a Buy Back Program, which is a stress-free way to sell your wheelchair van.

Tip #5: Read Company Reviews and Testimonials Before You Buy.
The most reliable online and local wheelchair van dealerships appear on review sites like Yelp and Google Local. Company web sites should feature customer testimonials.

When you shop for a wheelchair van, keep these tips in mind to make sure you get the best van for your needs at the best possible price.


2/26: Ponzi??
Sitting around a table in Baton Rouge, La., in February 2008, a handful of board members of the Firefighters’ Retirement System of Louisiana heard an investment pitch that would later come back to haunt them.

The fund was offering essentially a 12 percent guaranteed return, secured by a third-party investor, and the opportunity was so hot the board would have to make a decision that day.

(Secured by a third part investor??? Who the devil would do that???)



Family Outing

2/26:
Life Lessons Are Not Always Easy

By Mary Muir, M.Ed.

 

This week has taken me on a journey I never wanted to take. For the first time, my mother does not know me. She has lost all connection to my face, my identity and my voice. For the past five years, Mom has been suffering with Alzheimer’s and lives in a rest home nearby. Every day, my husband and I have visited her and taken her out for a ride or for tea. It has been a special ritual that helped her quality of life and provided sensory stimulation Likewise, it has given us the satisfaction of knowing she looked forward to our times together.

In December, she became 100 years old. Even then, she was able to walk without a cane and chat about the simple joys of nature, trees, sunshine, clouds and changing weather. I often joked that she is my best teacher on focusing and coming into the present moment.

July 2009 will long live in my memory. It is the beginning of an ending. It marks the beginning of an end of life as we knew it and an ending of a life as her only child, her daughter.

After returning from a few days’ vacation, my husband and I were both shocked to find that my mom has “lost” any memory of us or the fact that we are married. She has forgotten entirely that we have been coming to see her daily for the past five years. She continues to ask me who I am, if I know where her daughter is and why her daughter never comes to visit.

I am familiar with the symptoms of Alzheimer’s. I knew that this could happen one day, although one is never prepared for the emotional impact of becoming a total stranger to your own mother.

These changes are further evidence that the disease in now progressing full scale to take away even the smallest consolations we had as caregivers and that she had as an Alzheimer’s victim.

Unless one has had an “up close and personal” encounter with a family member who has dementia, it is difficult to imagine the heartbreak it creates and the amount of emotional readjustment it demands from both caregiver and loved one.

I have been told that the best way to approach our visits now is to avoid making any reference to being her daughter. Unless she brings it up, I do not mention that I have been there to see her. In spite of the personal pain I am feeling, it is important to confront the reality and not walk away from her at a time when she is most vulnerable.

Consequently, I must now try to focus on the calmness and comfort I can bring to her. We have let go of titles and relationships. We are now just two pilgrims on this journey and our focus is on how to relate purely at the heart level. I am holding on to the moments of comfort in the midst of pain and suffering over a lifetime of lost memories.

May you never have to take this life changing journey
May you not put off making time for those you care for and
May you remember to cherish and appreciate your loved ones
While you can.



2/26:


2/25:
 Bogle
- the Standard & Poor’s 500 Stock Index has risen from a level of 17 in 1950
to 1,540 at present. But deduct the returns achieved on the 40 days in which it had its highest percentage
gains—only 40 out of 14,528 days!—and it would drop by some 70 percent, to 276. Or eliminate the 40
worst days; then, the S&P would be sitting at 11,235, more than seven times today’s level. A good lesson,
then, about “staying the course” rather than jumping in and jumping out.
Financial markets, then, are volatile and unpredictable. Importantly, the markets themselves are
far more volatile than the underlying businesses that they represent, which collectively account for their
aggregate market capitalization. Put another way, investors are more volatile than investments.
Economic reality governs the returns earned by our businesses, and Black Swans are unlikely. But
emotions and perceptions—the swings of hope, greed, and fear among the participants in our financial
system—govern the returns earned in our markets. Emotional factors magnify or minimize this central
core of economic reality, and Black Swans can appear at any time.

Keynes warned: “It is dangerous to apply to the future
inductive arguments based on past experience unless we can distinguish the broad reasons for what it
(the past) was.”

2/25:
Valuing stock
Simply adding speculative return to investment return produces the total return generated by the
stock market. For example, if stocks begin a decade with a dividend yield of 4 percent and experience
subsequent earnings growth of 5 percent, the investment return would be 9 percent.5 If the price-earnings
ratio rises from fifteen times to twenty times, that 33 percent increase, spread over a decade, would
translate into an additional speculative return of about 3 percent annually. Simply adding the two returns
together, the total return on stocks would come to 12 percent

2/25: Bogle- Over the very long run, it is the economics if investing—enterprise—that has
determined total return; the evanescent emotions of investing—speculation—so important over the short
run, have ultimately proven to be virtually meaningless. In the past century, for example, the 9.6 percent
average annual return on U.S. stocks has been composed of 9.5 percentage points of investment return (an
average dividend yield of 4.5 percent plus average annual earnings growth of 5 percent), and only 0.1
percent of speculative return, borne of an inevitably period-dependent increase in the price-earnings ratio
from 10 times to 18 times, amortized over the century. Despite the Black Swans of market history,
ownership of American business has been a winner’s game.


2/25: 1. Black Swans—extreme and unexpected outcomes—are part of investing, and can’t be
predicted in advance.
2. As Karl Popper recognized, not only our market, but science itself, depends not on
observations confirmed by verification, but on wild conjectures sharpened by falsification
(proof that the theory is wrong).
3. Frank Knight focused on a critical distinction between risk—which is subject to
measurement—and uncertainty—which is not.
4. Stock market returns, in the short-term, are not normally distributed, but are explained by
the fractal patterns discovered by Mandelbrot. We can’t ignore the possibility—indeed,
the virtual certainty—that such extreme patterns will persist, and we never know when.
5. Keynes’s insight was to separate stock returns into two elements, enterprise—subject to a
reasoned financial analysis and speculation—the madness of crowds—which, he argued,
would become increasingly dominant.
6. Bogle (if you will) applied numbers to Keynes’s insight, showing that future investment
returns were subject to reasonable expectations, and that even speculative returns tended,
over time, to move toward zero.
7. Minsky added a sobering note: the financial economy, focused on speculation, was not
separate and distinct from the productive economy, focused on enterprise. Rather, the
former would come to overwhelm the latter.

2/23: Life Insurance: U.S. life insurance application activity fell across all three age groups with ages 0-44 experiencing the largest decline at -9.1%, year-over-year. Ages 45-59 closely followed down -8.7%. Notably ages 60+ were off -2.9% in January following a -5.3% year-over-year decline in December 2013. The 60+ age group has moved from being flat last August to negative territory for the next five months consecutively.

2/23:
Hubris Rick Ferri

EFM I understand what he is saying. But where are the comments about risk. Everything is almost solely focused on returns. Can Rick or Carl or Mary Poppins tell clients how much they will lose if the prognostication by Bogle of two 50% losses this decade comes true. The poor are sorely screwed and those that do not read are no different.  And my emphasis has never made much of a difference.  But it is absolutely valid for some consumers and all “investment adviser” to be followed. This next downturn may not be as bad as 2008 but it will come close.

Investing is about risk first and foremost


2/23: Term prices

The top is non smoker, preferred



The Irony of Caregiver Guilt      Gary Barg

After eight years of taking care of both parents by herself, Mary had a stroke. The stroke affected her mobility and leg strength, but most importantly to Mary, it meant her caregiving days were over. Her doctor said if she went back to full-time, around-the-clock caregiving, she would likely die before her 86- and 89-year-old parents.

Because Mary’s siblings lived out of state and offered no help, long-term care placement would have to be found for her parents before she was released from the hospital. Mary's guilt about no longer being able to be the direct caregiver for her parents led to a clinical depression and affected her own rehabilitation.

In desperation, Mary contacted a therapist who helped her see that she had given her parents eight years of the best, most loving care she could, even at the expense of her own health. The therapist also pointed out that as much as Mary’s parents might not like living in a long-term care facility, they would like it even less if she was institutionalized somewhere with a massive stroke, or dead because of the caregiving she provided for them. That helped ease the caregiver guilt a bit for Mary. Though she struggles with it still, there's more she can find to be grateful for than to feel guilty about. After all, she kept both parents at home for eight years, diligently handled their finances, and kept them both healthy and safe.

Regardless of the illness or disease with which your loved one is struggling, it is all too easy to find yourself in the clutches of caregiver guilt, despite the fact that you have nothing to feel guilty about. Another thing Mary began to realize through her therapy sessions was that her guilt was slowly giving way to another feeling – gratitude.

“I am grateful that I was given the chance to do all of this for them,” Mary says now. “I'm sad it wasn't until the end of their lives, but I am grateful it was for as long as it was. Gratitude keeps me from sinking to the depths of despair over the guilt...and it also helps me put everything into perspective.”

I couldn't have said it better myself.

The Fearless Caregiver's Guide to Beating Caregiver Guilt

  • Recognize your feelings of caregiver guilt
  • Understand the family dynamics with which you are dealing
  • Learn to appreciate all you do as a caregiver
  • Do not feel ashamed to share your feelings
  • Take the time to care for yourself

2/23: Education- John Mauldin

It seems to me that we have an education system that was designed to meet the needs of the US and the Second Industrial Revolution that was grown atop the industrial British Empire.

We are simply not preparing most of our children for the challenges that lie ahead. Many of course are going to do quite well, but that will be in spite of the educational process, not because of it. The complete higher-academic and bureaucratic capture of the educational process is as much at the root of income inequality as the other usual suspects are. There is more than one cause, and another root is the manipulation of capitalism and free markets by vested interests.


2/23: GDP
Following the release of
worse-than-expected retail sales data, market economists are slashing tracking estimates for GDP growth in both the fourth quarter of 2013 and the first quarter of 2014.

"Alongside the weaker-than-expected print in January, downward revisions to core retail sales growth in December (to 0.1% month-over-month from 0.7%) and November (to 0.1% from 0.4%) suggest notably softer growth in Q4 consumption than initially estimated,"


2/23: Notice how consistent the numbers are. NOT!

These are numbers for "interpretation" but the differences are SOOOOOOOOOOOOOOOOOOOO large that I think it is foolish.




2/20:


 

2/20: total debt



2/20:
Misguided- the application of the laws of probability to our financial markets is badly misguided. Truth told, the fact that an event has never before happened in the markets is no reason whatsoever to be confident that it can’t happen in the future.
we continue to look ahead with apparent confidence that the past is prologue, based on our assumptions that the probabilities established by history will endure.

The idea of seeking out evidence that contradicts our belief goes far beyond the financial markets.
It goes to the very nature of knowledge itself. For the eminent British philosopher Sir Karl Popper—wellknown
for his use of the Black Swan metaphor—the key question was “what if science didn’t proceed
from observation to theory? What if it was the other way around?”

Yet most of us—in our investment ideas and political ideas alike—search for facts that confirm our beliefs (reinforcement bias), not for the facts that would negate them.

Knight wrote:
. . . uncertainty must be taken in a sense radically distinct from the familiar
notion of Risk, from which it has never been properly separated. The term
“risk,” as loosely used in everyday speech and in economic discussion, really
covers two things which . . . are categorically different. The essential fact is that
“risk” means in some cases a quantity susceptible of measurement, while at other
times it is something distinctly not of this character. A measurable uncertainty,
or “risk” proper, is so far different from an immeasurable one that it is not in
effect an uncertainty at all.
Knight continues:
The facts of life in this regard are in a superficial sense obtrusively obvious and
are a matter of common observation. It is a world of change in which we live,
and a world of uncertainty. We live only by knowing something about the
future; while the problems of life or of conduct at least, arise from the fact that
we know so little . . . in business as in other spheres of activity. We act according
to (our) opinion, of greater or less foundation and value, neither entire ignorance
nor complete information, but partial knowledge. If we are to understand the
workings of the economic system we must examine the meaning and significance
of uncertainty; and to this end some inquiry into the nature and function of
knowledge itself is necessary.
The (likelihood) of opinion or estimate to error must be radically distinguished
from probability or chance, for there is no possibility of forming in any way
groups of instances of sufficient homogeneity to make possible a quantitative
determination of true probability (in which) any sort of statistical tabulation
(provides) any value for guidance. The conception of an objectively measurable
probability or chance is simply inapplicable . . .there is much question as to how
far the world is intelligible at all . . . It is only in the very special and crucial
cases that anything like a mathematical study can be made.”

So as long as we look at past patterns of market repetition on a sort of Gaussian “bell curve,” so
long as we rely on Monte Carlo simulations in which past stock returns are thrown into a giant mixer that
produces a million or more permutations and combinations, looking at probabilities in the stock market
seems a fool’s errand. Thus, we deceive ourselves when we believe that past stock market return patterns
provide the bounds by which we can predict the future.4 (Chart 4) When we do so, we ignore the
potential for future Black Swans.



2/20: Correlation

Using a simple “eye test,” which pair looks to be more highly correlated? Would you believe that the correlation between Stocks A and B in Figure 1 is 1.00, while that of A and C in Figure 2 is 0.52? Figure 1 shows an example whereby two stocks are highly correlated,  but the magnitude of directional movement for one (Stock A) is much more extreme than that of the other, (Stock B).

Whether the market is experiencing high correlation or low correlation, some stock has to be an outperformer and some stock has to be an underperformer.






2/20: Size matters



2/19: Reverse mortgages: Under federal regulations, after the last borrower named on the loan has died, the lender must provide up to 30 days for the heirs to decide on a repayment method. Heirs then have up to six months to sell or arrange financing.

The heirs will not be on the hook for any shortfall should the home fail to sell for enough to pay the loan in full. If the loan balance exceeds the value of the home, the amount owed is limited to 95 percent of the appraised value.

 On a home with an appraised value of $100,000, and a reverse mortgage balance of $120,000, the amount owed the lender would be $95,000. (No short sale would be approved for less than that amount.) Government-backed insurance on the loan would cover the $25,000 gap.



2/19:
Bonds - Authors= the most commonly used broad market bond index, the Barclays U.S. Aggregate Bond Index, posted a -2% return in 2013[1], its worst annual result since 1994. we believe investors’ myopic focus on one, relatively small negative number may distract them from the primary reasons they bought bonds in the first place: diversification and low volatility.

EFM- you need to understand that asset allocation is valid. But if you use an area that is now going to effectively lose for perhaps a decade, what is the point?? Sure the volatility/standard deviation is low and that will bring down your overall volatility to the entire portfolio. But Again I ask, what is your point?  I can suggest all sorts of portfolios to reduce volatility, but that is not the same as reducing risk. Volatility is not risk ipso facto. Risk of loss is- but then no one really cares about that until a worst case scenario. Yet after 2000 and 2008 there is no way (save for what I have done) to determine the riskiness of a portfolio. It is just business as usual.

In essence, a 60/40 split using standard bonds funds reduces volatility and, for all intents, will reduce the overall return for maybe a decade  (say a 2% loss each and every year) or more without addressing the huge potential loss of the equity side (50%)  or  that it will almost assuredly occur once or twice in this next decade.

This view is not myopic. It is not even considered at all by consumers or certainly the authors of the commentary.  

2/18: comparisons



2/19:
Academic article on how many stocks you need.  they note- We calculate several widely-accepted measures of risk: standard deviation, expected shortfall at 1%, and terminal wealth standard deviation.

efm- STANDARD DEVIATION IS NOT RISK.!!!

Holding too
few stocks exposes the investor to unnecessary idiosyncratic risk. Holding too many stocks
is costly both in terms of the cost of numerous transactions needed to build the initial port-
folio and the opportunity cost of monitoring a large diversified portfolio.

Campbell et al. (2001),
however, have shown that firm specific risk in the U.S. has grown over the past thirty years
relative to the overall volatility of the stock market and that correlations between stocks
have correspondingly decreased, reinforcing the advisability of larger portfolios.

2/19:
ETF Taxation

Table of Contents

  1. Introduction
  2. What Drives ETF Taxation
  3. Equity and Fixed Income Funds
    1. Taxation of Regulated Investment Companies
  4. Commodity ETFs
    1. Commodity Grantor Trusts
    2. Commodity Limited Partnerships
    3. Commodity ETNs
  5. Currency ETFs
    1. Currency Open-Ended Funds
    2. Currency Grantor Trusts
    3. Currency Limited Partnerships
    4. Currency ETNs
  6. Alternative ETFs
  7. Taxation of Distributions
    1. Equity ETFs
    2. Fixed-Income ETFs
    3. Commodity ETFs
    4. Currency ETFs
    5. Return of Capital
    6. MLP ETFs
    7. Buy-write ETFs
    8. Tying It All Together
  8. Appendix: 2013 Capital Gains Tax Changes
    1. Medicare Surcharge Tax
    2. Tax Tables

2/18:401k
. Last year, 35% of all participants who left their jobs cashed out their accounts


2/18: gold


2/18:
401K
Employers are squeezing their workers’ retirement savings, holding back on both the amount and the timing of 401(k) matching funds and dragging out vesting schedules. Taken together, these measures are making it more difficult to save for old age.

The investment industry has said for the past 30 years that 401(k)s are a big improvement over pensions, giving employees more investment choice, more control over retirement planning and more portability amid the frequent job changes of the modern workforce. That, at least, was the promise held out by the industry that now holds $4 trillion in retirement assets.

It hasn’t worked out that way. The median balance in 401(k) and individual retirement accounts for households headed by people ages 55 to 64 who had accounts at work was just $120,000 in 2010

Companies that adopted 401(k) plans have realized they can adjust them, tinkering with the plumbing and, in the process, costing workers millions in retirement savings. What’s more, contributions aren’t mandatory as they generally are in traditional pensions. Since 401(k) contributions are measured as a percentage of payroll, the savings from any cuts are realized immediately. Some employers are changing what they offer to lower their own expenses and improve profits.

a growing practice among companies of quietly scaling back retirement contributions, according to documents reviewed by Bloomberg. Many companies, including some major U.S. banks that sell investments to retirement plans, now delay their contributions to their employees’ 401(k)s until early the following year, paid in one lump sum rather than through regular payroll checks. Those changes depress employees’ compounded returns. And employees at some companies who change jobs before the end of the year wind up leaving company matches on the table.

2/17:
Too long

James W. Paulsen, chief investment strategist at Wells Capital Management:  “The sad truth is that over shorter periods, there’s really no certainty that the market will behave the way it has in the past, which is why you need to stay very broadly diversified in your investments and why most people need to go for the really, really long term.” 

, the stock market has tended to outperform the bond market in the past. (That’s probably because investors demand a premium for the greater risk involved in stock investing, according to prevailing theory.) This has been true, on average, for many decades — but it wasn’t true during the financial crisis. In order to count on a long-term trend like this, you may need to stay in the markets for 20 years or more — maybe for a lifetime, or even several lifetimes.

2/17: this problem is monstrous. the implications are staggering

The summer melt season for Arctic sea ice has lengthened by a month or more since 1979
In the past decade, the additional heat stored in the upper ocean has increased Arctic sea surface temperatures by 0.9 degrees to 2.7 degrees Fahrenheit (0.5 to 1.5 degrees Celsius). These warmer ocean temperatures prolong the
summer melt season because the ocean must fall below about 29 F (minus 1.9 C) before new sea ice forms.



2/17:
What, me worry??



the global population of people ages 65 and older is expected to triple to 1.5 billion by mid-century

When asked who should bear the greatest responsibility for the economic well-being of the elderly—their families, the government or the elderly themselves—the government tops the list in 13 of the 21 countries that were surveyed. However, many who name the government are less confident in their own standard of living in old age compared with those who name themselves or their families.

Rarely do people see retirement expenses as mainly a personal obligation. In only four countries—South Korea, the U.S., Germany and Britain—do more than one-third of the public say that the primary responsibility for the economic well-being of people in their old age rests with the elderly themselves.



2/16 OMG- Scientific literacy-

one in four unaware that the Earth revolves around the Sun.

The survey included more than 2,200 people in the United States and was conducted by the National Science Foundation.

Ten questions about physical and biological science were on the quiz, and the average score -- 6.5 correct -- was barely a passing grade.



2/16:
AUM-  Could not have said it better myself (
James W. Watkins)

I have never understood the media’s preoccupation with AUM and the presumed correlation between AUM and an investment advisor’s asset management skills.  As a certified financial planner™ professional, a securities attorney and former securities compliance officer, I can assure investors that there is no absolute correlation between an investment advisor’s claimed AUM and an investment advisor’s asset management skills. 

In analyzing AUM, certain questions need to be considered.  When AUM numbers increase, how much of the increase is due to the return on existing AUM and how much of the increase is simply due to the inflow of new money?  Growth in AUM from the inflow of new money might be an indicator of an investment advisor’s marketing skills, but not necessarily their asset management skills.  Have the AUM numbers been independently verified?  There have been a number of regulatory enforcement actions for misrepresentations of AUM.  Who actually manages the AUM?  If actual management of an advisor’s AUM is turned over to a third party asset manager, who is protecting the clients’ interests and what impact do the extra fees have on investment returns?

......

In the context of asset management, “swimming naked” is equivalent to managing assets without having an effective risk management program in place.  Investors often get so caught up in returns that they fail to protect against downside risk.  Bull markets become bear markets and vice versa.  The bear market of 2000-2002 taught many investors a hard lesson about the need to protect one’s profits through effective risk management.  It took six years for the S&P 500 Index to recover to its pre-2000 bear market level. 

Enter the investment advisor.  Forget the claimed amount of assets under “management,” the fancy titles, the company plaques and trophies, and the fancy marketing materials.  Look at your investment advisor’s performance record and determine how effective your investment advisor has been at avoiding significant losses in your investment portfolio.  What, if any, risk management strategies has your investment advisor discussed with you and actually implemented?  Are you possibly a victim of the Wall Street “the firm made money, the broker made money, two out of three ain’t bad” trap?

EFM- Do you know your risk of loss? Has any advisor ever addressed that to you? None that I have ever heard of.

2/16: Financial Planning in Fantasyland, William F. Sharpe

2/16: big change Not sure what it means right now but I have watched this for years.

all that said- here is the accompanying commentary-

Forecasters Predict Higher Growth, Lower Unemployment over the Next Three Years