Master Financial Education

E. F. Moody Jr.


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"

You must not believe everything you think

Stephan Thomas Vitas

Stephen Colbert

  Albert Einstein
Linkedin members: this website started in 1996 and I have done the Daily Commentary since that time. I used to do more reports and commentary here but it simply seemed more important from  around the early 2000s to present some of what I review every day and let the readers figure out the relevant issues themselves. Of course investments are covered but long term care, economics, life insurance, arbitrations et al command the bulk of a planners capabilities- though generally it's nothing more than lip service, Not so here.
Risk of Loss: There is a lot more to discuss but at this point I will give you a look at one of the most important videos you will ever see-  and that should change the industry regarding the "illusive" element of risk. You will need a financial calculator  Note- these were not initially designed for brokers but the material would not be much different.

Risk of Loss and Risk of Loss 2

Dollar Cost Averaging Down: Here is another very important video on risk-  that being a retiree will run out of money before death and the (semi) traditional 4% annual income rule. The position of the industry has been a buy and hold through the most perilous times and the market will always come back. So, over a long period of time, the investor will recoup their losses.  So, does it work? Well, from Peter Bernstein forward, the use of historical numbers tends to indicate that about 20- 30+ years you might do OK.   However, for middle income Americans,  it probably won’t work (very few things are 100% and maybe there will be far fewer major downturns in the next decades -as I type laughing greatly).  The trillions lost from 2000 and 2008 simply states that the middle class cannot take another big hit coming up soon.  So here is a video that will help consumers stem their losses on equities to around 10 to 15% (I was too pessimistic in the video at 20%-- that is too much to lose). It is DCAD- Dollar cost Averaging Down- another straight forward description to avoid large losses. Effectively guaranteed to work up to 95% of the time unless you are very emotional and/or stupid.  It's not perfect but it gets the job done. It is far better than the mathematical calculations that defy dieties and are based on numbers from the 1800s.  (It's almost an hour long and your spouse must watch as well. Extra bacon is a good incentive for men.)


DCA UP  Dollar Cost Averaging UP What goes down hopefully comes back up. But effectively every critic and pundit says there are no such triggers to  help advisors. .WRONG This  video shows you that an independent point in time can provide a valid entrance to the equities (bonds now dance to a different Yellen drummer). It is unemotional, nothing to do with a seance by the guru du jour of the week and it also negates your own ego (if that actually is possible). . Should provide around 85% to 90% of the upside.

DCA Dollar Cost Averaging: This is a marketing tool that is still being taught to "supposed" investors. It IS a conservative way to buy stocks and funds simply by not buying them. By the same token, it also lowers overall return about 2/3rds of time.  And in most cases the term is misused.


Consumer Broker/Planner Questionnaires- Utter Bollocks!
While I am not indicating that some valid information is not obtained, the idea that the consumer determines the amount of risk to be taken is ludicrous, stupid, simplistic, sophomoric, pretentious and more. It is a sham foisted on the American (and pretty much every other country) public that they know the risk of the market, the products they are purchasing and, above all, can determine their risk of loss if/when the economy should/will take a hit.

Right now FINRA is taking some brokers to task for the use of products/risk wherein not only the consumer was clueless to what could happen, but the agent was as well.
That should not be a surprise in that the fundamentals of investing have never been taught to a broker nor a RIA. Neither is the use of a financial calculator so one cannot expect much. .

These are not to be redistributed or used by anyone else in any manner whatsoever.

Uniform (Im)Prudent Investor Act- Waaaaaaaaaaaaaaaaaay Out of Date

World Clock by


World Development Report 2015: Mind, Society, and Behavior

By the world bank

12/14: Pay attention class:

Oil price fall sparks market turmoil
An accelerating slide in oil prices triggered broader turmoil across international financial markets on Friday, capping a turbulent week for energy that has compelled investors to sell shares and corporate bonds.

The speed of the descent in oil prices has cast a shadow across broader markets, with the US S&P 500 index falling 3.5 per cent this week, cutting its gain for the year to date to 8.3 per cent.

The S&P energy sector has fallen 18 per cent since the start of October with nearly a fifth of lower rated US energy bonds now trading as distressed securities.

View DCAD. The S&P has a ways to go before a major selloff. The problem is when you use higher risk- the energy sector for example- 18% drop is tough to handle. Now, if you had used only 5 to 10% of a portfolio, it might be OK. But bonds are also going to be a problem as well  since you are getting very little income  (IF ANY) from them and the asset value declines as well.
You are looking for a 10 to 15% correction. If you go out too soon (and you have a decent allocation) a small correction may just turn around. Once there is a 6% to 8% drop, you become concerned.

12/14: And more    FT
falling prices of oil and other commodities have been more bad than good for emerging economies as a whole. Commodities exporters have lost more than importers have gained,

  1. Date: 2014
    By: Barunik, Jozef
    Kočenda, Evžen
    Vácha, Lukáš
    Asymmetries in volatility spillovers are highly relevant to risk valuation and portfolio diversification strategies in financial markets. Yet, the large literature studying information transmission mechanisms ignores the fact that bad and good volatility may spill over at different magnitudes. This paper fills this gap with two contributions. One, we suggest how to quantify asymmetries in volatility spillovers due to bad and good volatility. Two, using high frequency data covering most liquid U.S. stocks in seven sectors, we provide ample evidence of the asymmetric connectedness of stocks. We universally reject the hypothesis of symmetric connectedness at the disaggregate level but in contrast, we document the symmetric transmission of info rmation in an aggregated portfolio. We show that bad and good volatility is transmitted at different magnitudes in different sectors, and the asymmetries sizably change over time. While negative spillovers are often of substantial magnitudes, they do not strictly dominate positive spillovers. We find that the overall intra-market connectedness of U.S. stocks increased substantially with the increased uncertainty of stock market participants during the financial crisis.
    Keywords: volatility,spillovers,semivariance,asymmetric effects,financial markets
    JEL: C18 C58 G15
  2. Date: 2014-07
    By: Georg, Co-Pierre
    When banks choose similar investment strategies, the financial system becomes vulnerable to common shocks. Banks decide about their investment strategy ex-ante based on a private belief about the state of the world and a social belief formed from observing the actions of peers. When the social belief is strong and the financial network is fragmented, banks follow their peers and their investment strategies synchronize. This effect is stronger for less informative private signals. For endogenously formed interbank networks, however, less informative signals lead to higher network density and less synchronization. It is shown that the former effect dominates the latter. JEL Classification: G21, C73, D53, D85
    Keywords: endogenous nancial n etworks, multi-agent simulations, social learning, Systemic risk
  3. Date: 2014-06
    By: Makoto Nirei (Hitotsubashi University)
    Tsutomu Watanabe (The University of Tokyo)
    Using a simultaneous-move herding model of rational traders who infer other traders' private information on the value of an asset by observing their aggre- gate actions, this study seeks to explain the emergence of fat-tailed distributions of transaction volumes and asset returns in financial markets. Without mak- ing any parametric assumptions on private information, we analytically show that traders' aggregate actions follow a power law distribution. We also provide simulation results to show that our model successfully reproduces the empirical distributions of asset returns. We argue that our model is similar to Keynes's beauty contest in the sense that traders, who are assumed to be homogeneous, have an incentive to mimic the average trader, leading to a situation similar to the indeterminacy of equilibrium. In this situation, a trader's buying action causes a stochastic chain-reaction, resulting in power laws for financial fluctuations.
12/14: True

Retirement calculators are wrong—but you need one anyway

Clients cannot rely heavily on retirement calculators as these tools only give an opinion of the sufficiency of their retirement savings, and as such, do not provide an accurate assessment, according to this article on Time Money. There are calculators that can offer help in making decision on taxes, Social Security benefits, and sequencing withdrawals from retirement accounts. When choosing a suitable retirement calculator, clients are advised to know the entity that developed the tool, its fidelity, and its real rate of return. –Time Money

EFM- like that'll wprk. If you have the ability to find out who really  wrote the program, its fidelity(?) and the real rate of return, you don't need a calculator.Do it yourself.

12: 14" False

When markets tumble, be like Bogle — 'Don't peek

Risk-adjusted investing is the best approach to build a retirement nest egg, allowing investors to resort to passive management as their investments grow even in the midst of dwindling markets, according to this article on MarketWatch. "One of my favorite rules is 'Don't peek.' Don't let all the noise drown out your common sense and your wisdom. Just try not to pay that much attention, because it will have no effect whatsoever, categorically, on your lifetime investment returns," says John Bogle, founder of the Vanguard Group. –MarketWatch

EFM- Follow DCAD and dcaup and you will be financially better off particularly if more things in your life go wrong . More than that, you will be better off emotionally.

If you are an absolute twit, pretty much nothing will work.

12/14:  Sing along please         All of me, please take all of me.........

Full body donations

go to and click on the button “Join the registry now.” We will add you to the list of registered donors, and send you and your family personalized ID cards to keep in your wallet for that time of need. Also, you could just simply pick up the phone and call 24 hours a day at our toll-free number, 1-800-417-3747, and we can walk you through the process, educate you and your family, and actually sign you up on the registry. And, the third way is that we have a special program for hospice patients called the Hope Program.

I have done this.

  1. Date: 2014-05
    By: Bekaert, Geert
    Hoerova, Marie
    We decompose the squared VIX index, derived from US S&P500; options prices, into the conditional variance of stock returns and the equity variance premium. We evaluate a plethora of state-of-the-art volatility forecasting models to produce an accurate measure of the conditional variance. We then examine the predictive power of the VIX and its two components for stock market returns, economic activity and financial instability. The variance premium predicts stock returns while the conditional stock market variance predicts economic activity and has a relatively higher predictive power for financial instability than does the variance premium. JEL Classification: C22, C52, G12, E32
    Keywords : economic uncertainty, financial instability, option implied volatility, realized volatility, risk aversion, risk-return trade-off, stock return predictability, variance risk premium, VIX
  2. Date: 2014
    By: Baruník, Jozef
    Kukacka, Jiri
    This paper develops a two-step estimation methodology that allows us to apply catastrophe theory to stock market returns with time-varying volatility and to model stock market crashes. In the first step, we utilize high-frequency data to estimate daily realized volatility from returns. Then, we use stochastic cusp catastrophe on data normalized by the estimated volatility in the second step to study possible discontinuities in the markets. We support our methodology through simulations in which we discuss the importance of stochastic noise and volatility in a deterministic cusp catastrophe model. The methodology is empirically tested on nearly 27 years of U.S. stock market returns covering several important recessions and crisis periods. While we find that the stock markets showed signs of bifurcation in the first half of the period, catastrophe theory was not able to confirm this behavior in the second half. Translating the results, we find that the U.S. stock market's downturns were more likely to be driven by the endogenous market forces during the first half of the studied period, while during the second half of the period, the exogenous forces seem to be driving the market's instability. The results suggest that the proposed methodology provides an important shift in the application of catastrophe theory to stock markets.
Date: 2014-02
By: Dominique Guegan (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
Bertrand Hassani (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
Stress testing is used to determine the stability or the resilience of a given financial institution by deliberately submitting. In this paper, we focus on what may lead a bank to fail and how its resilience can be measured. Two families of triggers are analysed: the first stands in the stands in the impact of external (and / or extreme) events, the second one stands on the impacts of the choice of inadequate models for predictions or risks measurement; more precisely on models becoming inadequate with time because of not being sufficiently flexible to adapt themselves to dynamical changes.

12/12: Sound familiar?????????   UK regulator criticised for not taking action on annuities

The City regulator was on Thursday accused of sweeping annuity mis-selling “under the carpet” after a two-year probe uncovered evidence of sales failings but did not recommend fines or customer compensation.\\

The probe, which was first launched in 2013, found evidence that some insurers were incentivising call centre staff to sell annuities to existing customers. There was also evidence that they did not explain to customers the benefits of shopping around for an annuity, or that they could get a better rate if they were in poorer health. In February this year, the FCA found that eight out ten customers could have got a better deal for their annuity, which converts pension savings into a guaranteed income, had they not bought from their existing provider, but on the open market.

12/12: 87 percent of middle-class military families are dealing with concerns about cuts to defense spending through increased financial preparedness

Top cost-cutting strategies identified during the most recent quarter include:

·        Cooking at home more often (36 percent)

·        Increasing the use of coupons (29 percent)

·        Spending less on junk food (27 percent)

·        Bringing lunch to work instead of eating out (27 percent)

·        Reducing clothing purchases (27 percent)

·        Reducing holiday spending (27 percent)

·        Reducing leisure activities (26 percent)

·        Shopping at discount stores (25 percent)

·        Reducing travel and staying closer to home (25 percent)

·        Attempting to reduce electric bills (25 percent)

12/12: Here Are The Breakeven Oil Prices For Every Drilling Project In The World

oil prices have fallen more than 30% in just the last six or so months, everyone wants to know how low prices can go before oil projects start shutting down, particularly US shale projects.

In a note in mid-November, Citi's Ed Morse highlighted this chart, showing that for most US shale plays, costs are below $80 a barrel.

The US shale plays

Over the last few years, Morse writes that companies have been willing to consider projects if they can sell the project's oil for $90 a barrel. 

And while the chart shows that almost every project that has been considered by companies to this point has required prices less than $90 to break-even, Morse writes that companies are canceling projects that require oil prices above $80 a barrel to break-even as the futures market has made hedging above that price a challenge. 

And beyond the implications for the economic feasibility of projects right now, there are also implications for future global supply. 

"We think the world has plenty of oil at $90 going forward," Morse writes, "but supply may be less adequate on a sustainable basis at prices much below $70...even though on a shorter-term basis, US shale production can continue to grow robustly even at lower prices."

EFM= Pay attention to prices by using this as a guide. However with a fabricated economy (QE), it is tough to how to figure it all out

12/12: Indexed universal life

The returns are similar to bond funds.Not easy to understand but this may help

12/12: North America is likely to be a net exporter of liquid fuels in the next decade, as production grows while demand in the US and Canada stagnates

Probably true- I'm just wondering if fracking might be detrimental to the environment because it pushes bad water back into the soil.

12:11: The obesity epidemic may be responsible for a spike in cancer cases — especially in women.

12/11: The Challenges with Participant Education
"Employers should work with their vendors to develop an education strategy ... specifically designed to direct the efforts of the vendors as they provide education services to employees on the importance of retirement savings and the value of the contributions made by the [employer]. Understanding that individuals learn differently, the key elements of these efforts should be focused on the four key drivers of successful retirement plan education programs: Plan participation; Employee deferral rates; Asset allocation; [and] Income replacement."

EFM- Sounds good but none of the instruction will cover a risk of loss calculation regarding the asset allocation. Asset allocation is usually designed in a vacuum of few probabilities and static correlations. That might be OK for the bulk of the time, but when a serious hiccup occurs it will fall apart.

12/11: Retirement Spending: How Much Can You Afford?
"There are a few caveats about the 4% rule you should be aware of: It applies to a specific portfolio composition.... It includes a very high level of confidence that your portfolio will last for a 30-year period.... [It] assumes that in nearly every scenario the hypothetical portfolio would not end with a negative balance.... It assumes a 30-year retirement."

EFM- I don't know what Schwab was really saying here but my point is that you do crunch numbers for 30 years to get some idea of the spending pattern and needed PV. . But the key is to really focus on not more than five years since the probabilities of life will cause some major wrinkles. Also that you cannot accept 50% losses once or twice a decade. See DCAD. If you can get around these, not only will you have more money but you will also retain your sanity..  

12/10: My hard drive went as well as the screen. My car is in the shop and it goes from there. Lots of material coming/

By Charles D. Ellis, Alicia H. Munnell, and Andrew D. Eschtruth

The book’s key findings are:

  • Today’s workers face a major retirement income gap because they will need more but can expect less from traditional sources.

  • The solutions are to save more and work longer.

    • Save more: shore up Social Security; make all 401(k)s fully automatic; extend coverage to those without a retirement plan; and tap home equity.

    • Work longer: encourage people to retire later, which boosts monthly Social Security benefits, adds to 401(k)s, and reduces the retirement span
Then there always is, don't lose money. If you stay invested when this next mess hit, all of Mid America will be lost in retirement

12/10  Bogle"

You once told a story about an adviser who said he was worried he'd be fired if he kept telling his clients to just stick to their long-term plan. He said his clients don’t see the value in doing nothing.

Right. And my point is that advisers need to sell their value as keeping their clients from doing the wrong thing at the wrong time. That’s what advisers have to offer: Keeping you from making a mistake is what you need me for.

EFM= Read above. You cannot take another 50% loss

12/10:  Not that bright


Predictors of '29 Crash See 65% Chance of 2015 Recession

November 12, 2014
By The Trust Advisor

The Jerome Levy Forecasting Center, based in Mount Kisco, New York, and run by Jerome’s grandson David, is again more worried than its peers. Its half-dozen analysts attach a 65% probability of a worldwide recession forcing a contraction in the U.S. by the end of next year.

EFM- I am over 50/50 for a mess in 2015. But such timing is "unknowable". That said, it is not necessarily the correct timing but what you are going to do when it happens

11/13: Today's Caregiver magazine is a gem. Covering every topic imaginable no matter how sensitive.

Caregiving Innovations: Male Incontinence Support

Leaving a legacy

11/13: Changes
Divorce among 50-somethings has doubled since 1990. One in five adults have never married, up from one in ten 30 years ago. In all, a majority of American adults are now single, government data show, including the mothers of two out of every five newborns.

The effects of the Great Recession on families are hard to ignore. Births and marriages have plunged, as millions of millennials skip or delay starting traditional families. The economic uncertainty of the downturn dismantled job security which, in turned, ripped up many wedding plans.

Families that have made unconventional arrangements are the most financially fragile. An Allianz survey of 4,500 Americans included an extra sample of families outside the historical norm, including single parents, same-sex couples and blended families. These “modern families” were less financially secure than traditional families, the study found. They were 50 percent more likely to have unexpectedly lost their main form of income -- and twice as likely to have declared bankruptcy.


Checklist for Older Adults

·        Falls at Home

o   Floors

o   Stairs & Steps

o   Kitchen

o   Bathrooms

o   Bedrooms

·        Other Things You Can Do to Prevent Falls

·        Other Safety Tips


VA Caregiver Support Services



Caregiver Support Coordinator

Your local Caregiver Support Coordinator is a licensed professional who can support you by matching you with services for which you are eligible, and providing you with valuable information about resources that are available to you through the VA.   

Services include:

Adult Day Health Care (ADHC) Centers

ADHC Centers are a safe and active environment with constant supervision designed for Veterans to get out of the home and participate in activities. (ADHC centers are generally open Monday through Friday during normal business hours).

Home-Based Primary Care

Home-Based Primary Care (HBPC) is a program designed to deliver routine health care services to your home when the Veteran you care for has medical issues that make it challenging for him or her to travel.

Skilled Home Care

The Skilled Home Care service provides a medical professional who comes to your home to help care for a homebound Veteran. Some of the care a Veteran can receive includes basic nursing services and physical, occupational, or speech therapies.

Homemaker and Home Health Aide Program

The Homemaker and Home Health Aide Program is designed to help a Veteran with personal care needs. Your local VA medical center can help arrange for a home health aide who will come to your home on a regular schedule to allow you time to take care of your own needs.

Home Telehealth

The Home Telehealth program is designed to give you ready access to a care coordinator by using technology (e.g., telephone, computers) in your home. The program is typically offered to individuals who live at a distance from a VA Medical Center.

Respite Care

If a Veteran requires a Caregiver, you are eligible to receive up to 30 days of respite care per year. The care can be offered in a variety of settings including at your home or through temporary placement of a Veteran at a VA Community Living Center, a VA-contracted Community Residential Care Facility, or an Adult Day Health Care Center.

Home Hospice Care

During the advanced stages of a terminal disease, Home Hospice Care can offer comfort and supportive services for you and the Veteran you care for in your own home. The team is there for you 24 hours a day, seven days a week. Bereavement care (grief counseling) is also available for you and other immediate family members.

To access these and other services visit

Or call the VA's Caregiver Support Line at 1-855-260-3274

Managing Lung Disease

By  Cheryl Ellis, RPFT, CRT, Staff Writer


The lungs oversee the body’s oxygen needs by taking in air deep into their corridors (called bronchi), allowing for oxygen and carbon dioxide to filter in and out of the blood. The dance of oxygen exchange becomes more complicated with inhaled pollutants of different kinds, such as tobacco smoke, pollution and congestion from infections.

Our lungs also help the body’s metabolic process, releasing more carbon dioxide in situations where the kidneys need help keeping the body’s acid and alkaline quantities balanced. They can release more or less carbon dioxide if needed in a given situation.

Each body system works with the other to keep the body in a state of health. Illness can be acute (short term) or chronic (recurrent). Each disease has its own definition of acute or chronic. Lung disease can be caused by restrictive conditions such as spinal curvature, or obstructive conditions like emphysema. Lung disease is often a mixture of more than one condition, and both restrictive and obstructive conditions can occur at the same time.


The National Institute of Health estimates that 12 million people have been diagnosed with Chronic Obstructive Pulmonary Disease (COPD).The term COPD is a general designation for a group of lung diseases that includes asthma, chronic bronchitis, emphysema and bronchiectasis.

COPD causes shortness of breath, and problems with mucus clearing and oxygen exchange from the lungs to the blood vessels. Each of the diseases that fall under the COPD classification creates different changes in the lung tissue, but essentially similar symptoms and challenges. Air flow is not only obstructed from going deep into the lungs. The ability to exhale properly hampers the next breath coming in.

The airways can collapse because the smaller airways “flop” closed when exhaling. The closed airway may need medication to open them up, or an altered breathing pattern that lets the air flow out more smoothly. Ideally, a combination of the two provides consistent help. The trapping of air prevents easy exchange of oxygen and carbon dioxide, and the “dance” that occurs when a new breath carries in fresh air causes “old” air to block the entry of “new” air. It’s similar to people needing to exit an elevator before others can get in.


Individuals diagnosed in early stages of COPD may have an easier time adapting to lifestyle changes to assist with management of the disease. Eliminating smoking is a first course of action; and the earlier one starts, the simpler it may be.

Therapies like pulmonary rehabilitation are designed to adapt to the current state of health, and provide great benefits at any stage of diagnosis. Pulmonary rehabilitation by competent professionals includes breathing exercises, education on energy conservation and supervised exercise to improve stamina.

In all cases, COPD increases the amount of work it takes to breathe. Conserving energy, especially in later stages, improves breathing and the body’s ability to transfer oxygen. By supplying the body’s oxygen needs adequately, everything from digestion to sleep is positively affected.


Family members and loved ones can have a difficult time with COPD diagnosis, treatment and day-to-day activities. Meals and medication schedules may have to be changed to assist the loved one with maintaining their health. Where meds and meals could be delayed or possibly skipped until a “convenient” time, a stricter schedule may have to be adhered to, delaying family activities.

Friends may not understand a progressive intolerance to certain odors from cleaning solutions, pets or colognes. The COPD patient may have adapted to exposure to some environments, but once diagnosed and advised on making changes, it may be less tolerable.

Mrs. Valorie Bender has been diagnosed with COPD, specifically emphysema, for fifteen years. She and her husband Michael had a number of adaptations to make during the first few years after her diagnosis.“Michael is a lot taller than me. If he sprayed air freshener or any kind of spray, I knew to stay out of the room until he was done.” Any spray releasing aerosol will have droplets that can be breathed in. Mrs. Bender learned to stay away from the area until the droplets had settled to avoid the mist penetrating her lungs.

She goes on to explain that adapting to COPD comes over time, and requires some creative thinking. With over a foot difference in height between the Benders, they are able to spot smokers to steer both of them away from second-hand smoke.“You have to be careful of people’s feelings” she indicates. Smokers, with or without a cigarette, carry the odor on their breath or clothing. The second- hand smoke can irritate lungs and trigger the need to use an inhaler. Preceding that would be a “coughing fit.”

Smokers may be used to strangers “commenting” on smoking by faking an intense cough. Mrs. Bender has chosen the middle path of dealing with this by avoiding the situation as much as possible. Family members may forget from time to time, or a new individual may be brought into their circle, requiring fancy footwork in being direct but kind. As her husband and caregiver, Michael Bender’s biggest adjustment was identifying what actions might be needed.“Michael had to learn not to panic when I went into a coughing attack.”


Loved ones with COPD may dig their heels in when it comes to adapting. Caregivers may feel obliged to push the situation. To eliminate stress on both parties, a middle ground is a better path.

When Valorie Bender’s “coughing fits” started, Michael learned to stay as calm as possible and just observe Valorie’s actions. If her handheld inhaler was needed, he could help by getting it for her, or help her to a chair to sit down until the coughing spasm passed. As they began to accept their roles in coping with COPD, caregiver and care receiver panic diminished. Michael learned the general “flow” of her coughing spasm, and that not all episodes are an emergency. Valorie, as the COPD patient, has adapted to letting herself get through the cough experience at her own rate, rather than push herself to “hurry up and get better so as not to panic Michael.”

The Benders have developed a lifestyle that may have limitations they didn’t have before Mrs. Bender’s diagnosis. Their changed lifestyle takes their mutual mental, emotional and physical well-being into the spotlight. Developing coping skills and creative management of activities has improved their relationship and mutual health.

11/11: Continuing care at home- new, untested and very interesting

Setting up a CCAH program is a way for a CCRC to serve more people without having to add facility beds. The CCRC that runs a CCAH offers the users many different home care services, such as care coordination, help with household chores and errands, transportation and in-home nursing services.

Date: 2014
By: Seeun Jung
Carole Treibich (Université de Cergy-Pontoise, THEMA)
We examine a Japanese Panel Survey in order to check whether self-reported risk aversion varies over time. In most panels, risk attitude variables are collected only once (found in only one survey wave), and it is assumed that self-reported risk aversion reflects the individual's time-invariant component of preferences to- ward risk. Nonetheless, the question could be asked as to whether the financial and macro shocks a person faces over his lifetime modify his risk aversion. Our em- pirical analysis provides evidence that risk aversion is composed of a time-variant part and shows that the variation cannot be ascribed to measurement error or noise given that it is related to income shocks. Ta king into account the fact that there are time-variant factors in risk aversion, we investigate how often it is preferable to collect the risk aversion measure in long panel surveys. Our result suggests that the best predictor of current behavior is the average of risk aversion, where risk aversion is collected every two years. It is therefore advisable for risk aversion measures to be collected every two years in long panel surveys.

11/11: True

“No investment strategy based on mainstream finance theory can, therefore, protect investors from market-wide crashes.” -

EFM-The issue is  mainstream finance,

It is then noted in a new CFA study=

The assumptions underlying mainstream finance theory are “clearly false”, it says. Markets are not in general equilibrium or populated by rational agents with perfect knowledge of the future. Even supporters of the theory acknowledge the unrealistic nature of the models and the need to add extra components, such as taking account of money creation and the banking system.

EFM- in 2000 and 2008, I did not know when the recession would hit, how bad it would be nor how long it would last. But both DCAD and DCAup both worked. They will work the next time, Just view the videos.


Investment management has grown up alongside the development of financial theory, via the efficient market hypothesis and capital asset pricing model. Much of today’s approach is predicated on the “obvious” advantage of diversification accomplished through portfolio optimisation.

The real value of diversification was called into question when the crisis hit and nearly all assets went down in price together. That was unpredictable, and probably part of normal variability, say defenders of the status quo. Most portfolios are still constructed on the basis that wide diversification, both within single asset classes and across asset classes, will reduce risk without sacrificing return.

Those critical of the standard approach are talking about or testing new ideas, such as diversification based on risk factors and dynamic asset allocation.

11/11: Britain will go into another recession

Blow for Cameron as UK faces deeper cuts
George Osborne will be forced to swing his axe much deeper into the budgets of departments such as the army, police and courts as the annual savings the chancellor must find to meet his austerity targets are set to nearly double to £48bn,

11/11: And so shall a bunch of others. . I know the data but I still have a problem with the U.S. at 3%

And we have this mess- Clashes between government forces and Russian-backed separatists in Ukraine’s breakaway eastern regions intensified this weekend, as Kiev accused Moscow of supplying rebels with heavy weaponry and new fighters

It will be interesting to look as this in a year
11/9: Economic commentary I agree with, Mainly that the world has radically changed and it will be tough to figure out. As regards investments, I do believe the simplistic format I identified above will tempter major losses by quite a bit.

"Plan advisors ought to take a somewhat jaundiced view of what the mainstream economists are projecting about the future. Prejudices aside, the world economy has become so complex that it is difficult for anyone to make accurate financial forecasts. 

It is also not unreasonable to assume that the future pattern will look very different from what it has been in the past. While the U.S. has recently weaned itself off of QE, that may not be the end of the story. At some point, the enormous debt load the U.S. has assumed could very well create a day of reckoning. What that day looks likes no one knows, other than it is a righting of the scales.

It is also the case that the U.S. can kick the can down the road further still".


Save Twice with the Saver’s Credit

If you are a low-to-moderate income worker, you can take steps now to save two ways for the same amount. With the saver’s credit you can save for your retirement and save on your taxes with a special tax credit. Here are six tips you should know about this credit:

1. Save for retirement.  The formal name of the saver’s credit is the retirement savings contributions credit. You may be able to claim this tax credit in addition to any other tax savings that also apply. The saver’s credit helps offset part of the first $2,000 you voluntarily save for your retirement. This includes amounts you contribute to IRAs, 401(k) plans and similar workplace plans.

2. Save on taxes.  The saver’s credit can increase your refund or reduce the tax you owe. The maximum credit is $1,000, or $2,000 for married couples. The credit you receive is often much less, due in part because of the deductions and other credits you may claim.

3. Income limits.  Income limits vary based on your filing status. You may be able to claim the saver’s credit if you’re a:

• Married couple filing jointly with income up to $60,000 in 2014 or $61,000 in 2015.

• Head of Household with income up to $45,000 in 2014 or $45,750 in 2015.

• Married person filing separately or single with income up to $30,000 in 2014 or $30,500 in 2015.

4. When to contribute.  If you’re eligible you still have time to contribute and get the saver’s credit on your 2014 tax return. You have until April 15, 2015, to set up a new IRA or add money to an existing IRA for 2014. You must make an elective deferral (contribution) by the end of the year to a 401(k) plan or similar workplace program.

If you can’t set aside money for this year you may want to schedule your 2015 contributions soon so your employer can begin withholding them in January.

5. Special rules apply.  Other special rules that apply to the credit include:

• You must be at least 18 years of age.

• You can’t have been a full-time student in 2014.

• Another person can’t claim you as a dependent on their tax return.

11/9: Insurance company investments

In September, Fitch Ratings examined the investment portfolios of U.S. life insurance companies at year-end 2013 based on statutory information the agency compiles annually from an investment survey of its universe of rated entities. Fitch Ratings estimates these results represent approximately two-thirds of the total life insurance industry's general account invested assets. Fixed-income investments on average accounted for 84% of total invested assets. The remaining 16% was made up of Schedule BA assets at 6%, contract loans at 4%, cash at 2%, stock at 2%, derivatives at 1%, and real estate at 1%. As interest rates remain at historically low levels, life insurers have made a modest allocation shift into less liquid asset classes, including alternative investments, private placement corporate bonds and commercial mortgage loans. 

11/9: And he probably voted.......

In Hueytown, Alabama, a citizen saw the surveillance video of the robbery of a Subway on Facebook, recognized the suspect shopping in the Hueytown Walmart, and called police. The police noticed he was wearing the same clothes and shoes as the robbery suspect. They believe he is also responsible for Subway robberies in Birmingham, Midfield and Adamsville. The man was taken into custody and admitted to the robbery in Hueytown. He told police he did it out of anger because the “Jared diet” didn’t work for him.

Surviving Caregiving with Dignity, Love and Kindness

By Barbara Hanson Dennis


Yesterday, my husband Les died. No, it was actually a year and 41 days ago, but it feels like yesterday. I’m still wondering how this could really have happened. He was diagnosed with Early Stage Early Onset Probable Alzheimer’s Disease in January 2000 at age 63.

For the first week after diagnosis, I kept saying, “WE have Alzheimer’s,” but then I quit saying that even though it was certainly true. When a person is diagnosed with dementia, there must be someone who is the caregiver. That someone may be hired, but in most cases it is a member of the family.

In many cases, that is the spouse of the person with dementia. Whether that new caregiver knows anything about the condition, she or he is thrust into a role for which they may have no preparation at all.

This article is about how I learned to become a caregiver and what I found to be the 10 most useful things to know in caregiving—not only for myself, but also for Les.

1. Love: Sometimes we don’t have strong feelings of love—when we are tired, scared or angry about the situation. I have heard and read about situations where there is a great deal of anger simmering in a relationship that may make it extremely difficult to be a caregiver. “Brotherly” love may help to get through those difficult times. Inspirational readings can be calming and encouraging. It may be useful also to talk with a clergyperson or a therapist.

2. Learning: Learn as much as possible about the particular kind of dementia your loved one has. There are many books about the subject now as well as articles on the Internet. Ask the doctor for recommendations about ideas for reading. If he or she doesn’t have any, then try the library or Google.

3. Support groups: I cannot say enough about the value of support groups. I learned as much from other caregivers about how to handle situations as I did from anywhere or anyone else. Fellow caregivers can be an absolute goldmine—not only for ideas, but for venting when things are tough. It takes a fellow caregiver to fully understand what you are going through.

4. Humor: This is one of the best ways to get through those sticky situations where you are getting resistance or disagreement. Your own “private” jokes with your loved one may be great for maintaining a bond between you.

5. Diversion: Another way to get through a difficult time is diversion. When humor doesn’t work, coming up with an alternative activity or topic of conversation usually does. It may be something as simple as looking for a favorite object; i.e., “Now where did the coin box go?” or possibly offering a drink of water or a “treat” that is appropriate to the person’s diet.

6. Exercise: This may sound like a nearly impossible thing to do if you are a 24/7 caregiver, but it is not. It is really on a par with being in a support group. Physical exercise is very important for anyone with dementia and their caregivers because it helps with depression, stress and overall health. There are several ways to do this. One possibility is to take your loved one with you as long as she or he can walk. Another option is to leave him/her doing some activity for the duration of your walk or other exercise. Finally, ask a family member, friend or agency person to stay while you exercise.

7. Planning: Time to plan ahead may vary with the extent to which the dementia has progressed when the diagnosis is given. Contact an Elder Care Attorney and have him or her help prepare all the Advance Directives one needs. This includes Power of Attorney, Living Will, Healthcare Power of Attorney and a regular Will. You may also want a Do Not Resuscitate (DNR) Form.

8. Meaningful Activities: While this may seem like an improbable recommendation for a person with dementia, it was definitely my experience that non-pharmacological activities were a key to a slower progression of the disease in my husband and others with dementia. Just as we are given suggestions for activities to “prevent” dementia, I strongly believe that activities can keep those already diagnosed from going downhill faster. It does not have to be huge. For Les, one year it was helping to propagate poinsettias over a year for the Christmas show at a Chicago conservatory and then taking people there to see them all. Other years, it was going to various nearby attractions with a caregiver willing to take him places to keep him seeing new things and active.

9. Dignity: As long as possible, it is important to treat those with dementia with as much dignity as possible. This occurs not only through participation in meaningful activities, but also when going to visit the doctor. One of my husband’s most important messages to doctors and other groups he addressed was that patients do not want to be ignored or separated from the caregiver during discussion. If there were things I wanted the doctor to know that I didn’t want to say in front of Les, I wrote them down and handed them to the nurse before we went in so the doctor could read them. It is not always easy to work around the patient as their abilities diminish, but it is vital to allow them to maintain their dignity, and especially not to treat them as a child. They have a lifetime of experience even if they have lost some skills, so they must be allowed personal freedom balanced with the degree of risk.

10. Respite: This is last, but not least. Even though Les had long-term care insurance so we could have paid caregivers to come in a few hours a day, I did have a stroke after 10 years of being a caregiver. It was only then that my sons suggested we put Les into a nursing home. If you have long-term care insurance, it’s good to use it while your loved one is still home so you can get much needed breaks. If you don’t have that insurance, hopefully family and/or friends will offer to help. If they don’t offer, ask. It you still need help, try your church or social service agencies in your municipality or township.

I have very fond memories of Les even after he was diagnosed with Alzheimer’s. I will never forget that he was still Les until the day he died; he was always “there” after 11 years. Being there for those moments was a blessing for me and our whole family. Dementia is a disease, but it doesn’t have to be a disaster.

Reality doesn’t interest me.

         Leni Riefenstahl,

11/9: I knew it was bad- but not this bad

A crash in Genworth shares comes after the company on Wednesday night reported earnings that widely missed expectations as it had taken a massive $844 million loss after completing a review of its long-term care businesses. 

"The company made changes to its assumptions and methodologies primarily impacting claim terminations, most significantly in later duration claims, and benefit utilization reflecting that claimants are staying on claim longer and utilizing more of their available benefits in aggregate than had previously been assumed in the company's reserve calculations."

11/9i: Assisted living stats

Resident Profile

Typical Resident The typical resident is a woman about 87 years old1 who is mobile, but needs assistance with approximately two to three activities of daily living (ADLs). She would have two to three of the Top 10 chronic conditions.2

Percentage Of All Residents By Age Groups: In 2010, 54 percent of assisted living residents are 85 years or older; 27 percent are 75-84 years old; 9 percent of residents are between 65 and 74 years; and 11 percent are younger than 65 years old.2

Gender - Seventy-four percent assisted living residents are female; 26 percent are male.2

Number of Residents - More than 735,000 people nationwide live in assisted living settings.

Activities of Daily Thirty-eight percent of residents received assistance with three of more ADLs.  The chart below shows the various ADLs and the percentage of residents needing help with them.2


Activities of
Daily Living
% of Residents
Needing Help
Bathing 72%
Dressing 52%
Toileting 36%
Transferring 25%


Other Common Services - Eighty-seven percent of assisted living residents need help with meal preparation, while 81 percent need help managing their medications.1

Top Ten Chronic Conditions 2 

  • High Blood Pressure: 57%
  • Alzheimer's disease and other dementias: 42%
  • Heart Disease: 34%
  • Depression: 28%
  • Arthritis: 27%
  • Osteoporosis: 21%
  • Diabetes: 17%
  • COPD and allied conditions: 15%
  • Cancer: 11%
  • Stroke: 11%


Moving In - Residents come to assisted living facilities from a variety of settings:1

  • 70% moved from a private home or apartment
  • 9% came from a nursing facility
  • 9% moved from a retirement or independent living community
  • 7% moved from a family residence (such as living with adult childrens)
  • 5% came from another assisted living residence or group home

Moving Out - Fifty-nine percent of residents will move into a nursing facility. Thirty-three percent will pass away. The remaining will move home or to another location.1

Median Length of Stay: The median length of stay for residents is about 22 months.2

Resident Rights - The National Center for Assisted Living advocates that residents' rights should include the right to:

  • Privacy
  • Be treated at all times with dignity and respect
  • Control personal finances
  • Retain and have use of personal possessions
  • Interact freely with others both within the assisted living residence and in the community
  • Freedom of religion
  • Control receipt of health-related services
  • Organize resident councils


1Overview of Assisted Living," published by the American Association of Homes and Services for the Aging, American Seniors Housing Association, Assisted Living Federation of American, National Center for Assisted Living, and National Investment Center for the Seniors Housing & Care Industry, or reflects NCAL's philosophy of assisted living. 

Data from the 2010 National Survey of Residential Care Facilities. The National Center for Health Statistics Data Brief No. 91.

11/10: Scary numbers when needing ltc

Once the assets go below roughly $2,000, Medicaid takes over:


11/7: Students of finance and investment management heading for the classroom this autumn will be taught the same mainstream theories as their predecessors.

Those theories failed to anticipate the 2008 financial crisis, or earlier crashes, and probably will not spot the next one. How can they when the underlying assumption is that markets are in a state of equilibrium that can only be disturbed by unpredictable events unconnected to market operations?

No investment strategy based on mainstream finance theory can, therefore, protect investors from market-wide crashes,” notes a study by the CFA Institute,

'Approximately right' through pragmatism is better then 'precisely wrong' through theory.
11/6: The answer is yes

Following the 2007–09 financial crisis, mainstream finance theory was criticized for failing to forecast the market crash, which resulted in large losses for investors. Has our finance theory, which many consider an idealization that does not take reality into account, failed investors? Do we need to reconsider the theory and how it is taught (and practiced)?


98% of drivers who say they "text daily" are "aware of the dangers of texting behind the wheel. Nonetheless, three-quarters of them admitted to texting while driving, despite broad public-service campaigns and laws against it in some states."

"Two-thirds said they have read text messages while stopped at a red light or stop sign, while more than a quarter said they have sent texts while driving. More than a quarter of those who texted while driving believed they "can easily do several things at once, even while driving."

— Twenty-eight percent said they are worried about missing out of something important if they don't check their phones right away.

— More than a quarter believes that their driving performance is not affected by texting, and just as many people said they believe that others expect them to respond to texts "right away."

— Just 6 percent answered that they are "addicted to texting," although 14 percent admitted that they are "anxious" if they don't respond to a text right away, and 17 percent feel "a sense of satisfaction" when they can read or respond to a text message.

\\11/5: Apparently we  didn't learn anything

The Financial Stability Board (FSB), a key watchdog and thought leader in the industry, has just released data on the global economy which shows that shadow banking is nearly matching its pre-crisis peak in terms of overall size. In total, for the 20 countries, plus the EU, which it calculates, the global shadow banking market is at $75 tn per annum. China, unsurprisingly, is showing the fastest growth in the world, and its shadow banking market is only smaller than the US and UK’s. The global increase in shadow banking is largely due to regulation, which has forced banks away from lending, and in turn, given rise to other sectors springing up to fill the credit void. Banking’s share of lending has shrunk from 49% globally in 2008, to just 45.6% this year, while shadow banks now account for 24.5% of all lending. The US dwarfs all other markets in total shadow banking, with an industry worth $14.4 tn, while China’s is only $2.7 tn, though it is growing at 38% per year.

11/5: Brokers need more training on complex products, regulators say
Regulators are calling for improved training for financial professionals who sell complex products such as annuities, alternative mutual funds, floating-rate bank loans and sophisticated fixed-income instruments. They say too many advisers can't explain such products.

“We're surprised at how many [registered] reps cannot explain the products they sell,” Tanya Solov, Illinois securities director

EFM- I'm not. A broker has never been taught the fundamentals of investing so what do you expect.

11/5: Disability problems- 3 times greater than dying

Personal disability insurance is one of the elementary financial needs of any professional, and in a perfect world should be as commonly prescribed as auto or homeowners insurance.  That ideal is far from the reality.  There are currently fewer than 30 carriers offering disability insurance in the United States, but more than 800 selling life insurance.  More working Americans annually purchase life policies than DI policies, but the average person is over three times more likely to become permanently disabled than die during his/her career.

Even if a high net worth prospect has employer sponsored group long term disability coverage (LTD) and a separate personal policy, he/she may often times be improperly insured at unacceptably low levels.  It’s crucial to think of and advise on disability risk assessment in layers or tiers.  Group LTD usually provides the basic coverage or first tier of insurance.  For a healthy client under the age of 60, the second tier of protection can be comprised of an individual non-cancellable or guaranteed renewable product readily available through the “traditional” disability market.  Most insured persons can find sufficient levels of protection through the first and second tiers. 

11/5 Big differences


European Commission slashes eurozone forecasts


The European Commission slashed its economic outlook for the eurozone on Tuesday, predicting the currency bloc would grow only 1.1 per cent next year, down from a 1.7 per cent forecast just six months ago.
The revisions were particularly big in the two largest eurozone economies, Germany and France, for which the commission cut its projections by nearly a full percentage point for 2015. The gross domestic product forecast for Germany, the common currency’s economic engine, was cut from 2 per cent in May to 1.1 per cent; France went from 1.5 per cent to 0.7 per cent.

EFM- with Germany with next to no growth, there goes any bailout for other members of the EU


The Professional Care Manager As A Family Caregiver: Unique Challenges

By Rona S. Bartelstone, MSW, LCSW, BCD, CMC
CEO, Rona Bartelstone Associates, Inc.

Care Management is probably the most holistic and consumer centered approach to the provision of services for frail and vulnerable populations.  Care Management is a process that looks at medical, social, emotional, spiritual, safety and functional needs of an individual and his/her family and support systems.  The provision of services to meet some of these needs may come from a variety of professionals, but the care manager is the key to understanding, accessing and coordinating those services that best meet the needs of the consumer. 

Because the Care Manager has experience in the complex tasks of assessing, organizing, facilitating, advocating and quality assuring the services provided, s/he is expected to have the ability to objectively understand the various systems’ needs and requirements.  S/he is also expected to understand personal and professional boundaries and the most appropriate therapeutic techniques.  This central, objective role enables advocacy and an interdisciplinary collaboration that is based upon the understanding of the different responsibilities of each member of the service delivery team and the consumer. 

So what happens when the professional Care Manager becomes a family caregiver and is acting on behalf of his/her own family system?  This presents many issues around objectivity, role and boundary definition, use of self and the emotional aspects of caregiving.  This is a concern that I encountered, when after thirty years as a professional caregiver, I found myself caring for a father with cancer, a mother with mild cognitive impairment and a husband who had suffered a stroke.  I found myself in unfamiliar territory in terms of emotional coping and my role within the healthcare system, when it came to my own family.

Good News/Bad News

Like most human endeavors, things are often not clear cut for the “proffamily” (a term I coined to describe my role as the professional caregiver turned family caregiver) caregiver.  As we move into the role of family caregiver, there are several unique challenges to our professionalism and our most intimate and loving relationships.  Many of these challenges are double edged swords for the professional who has both experience and knowledge of resources, but who can no longer claim the objectivity and boundaries that are expected in the work role.  This can create a role dissonance and challenge our professionalism.

1.  Resource and Health Knowledge

When you have a lot of knowledge and experience in working with health and social problems, it helps by enabling you to have many more resources, more immediately available than lay families.  On the other hand, knowing the trajectory of a disease process, the side effects of treatments, the nature of, or limitations to recovery can be a very challenging prospect for the “proffamily” caregiver, who doesn’t get the “luxury” of learning to live with the illness and its impact over time.  

For example, when my mother was diagnosed with Mild Cognitive Impairment, I immediately saw the nature of our future together and began to experience the grief and sadness that many families don’t face until much further into the disease process.  This makes it hard to stay in the moment and deal with the current situation without anticipating the future too much.  Moving immediately into the later stages of the disease process in thought and feeling can lead to excess disability.  The ability to balance present and future concerns, the lifetime of relationship issues (both positive and negative), and the immediate care needs can be a challenge for the professional who “knows too much.”

2. Accessing & Managing Systems

On the other hand, knowing the health and social service delivery systems is a strength that the “proffamily” caregiver can call upon to assure access to the most appropriate services in an efficient manner.  This provides a sense of control, confidence and self esteem, in the midst of the crisis. 

Knowledge of how different systems function enables the “proffamily” caregiver to manage the system to assure that our loved ones receive appropriate care.  This can include the ability to assure second opinions, specialty consults, appropriate discharge planning and timing, and the implementation and coordination of home and community based care services, for example. 

At the same time, being a professional caregiver does not make us immune to health and social service delivery problems. However, as the consumer it is difficult for the “proffamily” caregiver not to feel responsible for the deficits of the system.  This can be especially true if our own service delivery system is proven deficient in some way.  It can be difficult to acknowledge to our loved ones and ourselves that even we cannot “fix” the system, though that may have been our goal in becoming a professional caregiver.  This certainly challenged my role as the family “health care expert” when dealing with situations that are engrained in the fractured delivery system.

3.  Advocacy & Health Education

Advocacy and education is also a role in which the “proffamily” caregiver can demonstrate skill and feel a sense of mastery.  Despite the proliferation of health information and the emergence of consumer directed care concepts, it is still very difficult for the health community to adequately communicate the nature of health issues, the variety of treatment options, and the consequences of the various options.  This is especially true when dealing with complex, systemic health care treatments. By attending physician visits, reviewing charts, assuring communication among doctors and other related professionals, and asking probing questions about treatment the “proffamily” caregiver can bring a comprehensive and understandable approach to treatment.  Likewise, as a family member acting in the role of care manager, even asking the “right” questions is often a critical component for enabling healthy coping with catastrophic situations. 

4.  Role dissonance & Loss of control

One of the most challenging parts of being a “proffamily” caregiver is the role dissonance that arises when the care need is personalized.  I vividly remember my own feelings of helplessness and fear while I sat with my husband in the hospital after his stroke.  I felt that I had to “behave” or the hospital staff would find me to be an imposition and my husband’s care would be adversely affected.  Finding the appropriate balance between advocacy and intrusion is not easy when the wound is so raw and intense.  I felt that I was in a position that was so uncharacteristic for me and so lacking in control, that it was a most uncomfortable experience. And while I felt this most acutely in this particular situation, it remains a constant theme throughout the course of my caregiving responsibilities.

5.  Grieving/sadness vs. task orientation

One of the realizations that came to me in my role as “proffamily” caregiver for both parents is that I had to compartmentalize my grief in order to stay task oriented. In other words, my grief would often be put on the back burner to enable me to get through the variety of tasks related to parent care.  This compartmentalization further necessitated that when I was not with my parents that I pay attention to my grief and sadness and honor it by giving myself time to feel. By periodically embracing my grief and allowing its expression, I found that I was able to get back to the tasks at hand. 

Anticipatory grief, forgiveness work and learning acceptance can be a powerful experience that enhances our ability to give care to family, self and others.  “Proffamily” caregivers are in a unique position to understand this and to address it. 


While “proffamily” caregivers certainly do not have a monopoly on conflicted feelings at the time of an existential crisis, I do believe that we come to it and work through it with a special constellation of issues.  Being able to set appropriate boundaries and ensure self-care is critical for “proffamily” caregivers, who are often more used to giving than receiving.  Therefore, it is imperative to allow ourselves the opportunity to reach out to our closest support systems and to let them take care of us.  I know that this is a huge challenge, but it can also be immensely gratifying when we let others return the love that they feel for us.

Our unique knowledge and experience can facilitate or inhibit our ability to make conscious choices about how we use ourselves in our caregiving role.  When we choose to let our background facilitate the best use of self, we can experience the entire process of caregiving in a way that turns burdens into blessings.  We can further our self actualization with a sense of purpose, dignity and grace that creates growth as a professional, as well.

11/4: Puts the problem into perspective

11/4: Death with dignity

Here is an extended commentary on which states legally offer the ability to takes one's own life

11/4: Guy Debelle, head of the BIS’s market committee, said investors have become far too complacent, wrongly believing that central banks can protect them, many staking bets that are bound to “blow up” [at] the first sign of stress.

Mr. Debelle said the markets may at any time start to question whether the global authorities have matters under control, or whether their pledge to hold down rates through forward guidance can be believed. “I find it somewhat surprising that the market is willing to accept the central banks at their word, and not think so much for themselves,” he said. [Source: Ambrose Evans-Pritchard, “BIS warns on 'violent' reversal of global markets”]

11/4:  I sent a reply to a reader indicating how difficult planning actually is. That type of comment is heresy with all the tripe out there showing how to simply invest for 30 years and everything will come out rosy

So here are recent comments by Bill Sharpe: At least someone agrees with me.

The simple way in which most people have characterized the accumulation phase is to say: You’re going to invest, maybe you have a glide path, but the thing you’re going to produce is the probability distribution of the value at retirement. You can draw it on a flat piece of paper. It’s a probability of distribution of one outcome.

When you are talking about retirement-income strategies, you’re discussing probability distributions of what your income will be next year and every year thereafter. You’ve got 40 or 50 dimensions, even if you only do annual joint-probability distributions.

To think about what one of those problems looks like boggles the mind. To compare an outcome with another two, three, four or 10 outcomes to decide which one you like best is a nasty, nasty problem.

The question is how you cut into that. There are ways, but they involve – at the very least – coming up with 50 or maybe 100 coefficients for preferences and risk aversion vis-à-vis income at age 81, opposed to 82, etc.

Then you add in consideration of whether you are alive along with your partner, or just one of you, or if it goes to the kids and the charities after we die. Right there, you’re already up to 100, 200 parameters that you’ve got to somehow or other nail down before you can think about finding an optimum strategy.

The dimensionality is overwhelming, and the behavioral issues are of course, very difficult.

EFM- yes you can do monte carlo estimates out 30 years. For those that know my stuff, you can also do a risk of loss for 30 years. A budget one uses for 30 years. Your health for 30 years and on and on. It is necessary to get some type of a guide but frankly anything beyond 5 years just seems dicey. You have to keep doing adjustments very frequently to include all sorts of changes that happen. It's hard. ,

And while pundits may rail at DCAD (see video above) I think it will help the bulk of retirees if they can avoid the huge market losses that I expect many times over the next 30 years.

11/4: Fewer young home buyers

The share of first-time home buyers has dropped to its lowest level in 27 years, highlighting the challenges facing the housing market’s stalled recovery, according to an annual survey released Monday by the National Association of Realtors.

Only 33 percent of buyers purchased their first home this year, down from 38 percent a year ago. The last time the share was lower was in 1987, when first-time buyers made up only 30 percent of home purchases. The Realtors group cited several reasons for the decline, including a challenging job market and lending standards that tightened too much in the wake of the housing bust.

EFM Of particular note, new homes and construction have always been the hallmark of  a strong U.S. economy.



11/3: Funny, cynical and TRUE

11/3: It's the economy stupid

11/3: Poor poor

11/3: Correlations don't change much, eh?


11/2: The rich are taking it all

I wish I had good advice for your savings, but I can’t advise buying stocks that have only been more expensive in 2000 on some key metrics right before you know what, and I can’t recommend buying any long term bond as the yields also stink relative to inflation. With the Fed now saying that the dollars in your pocket are now worth too much relative to money in people’s pockets overseas and thus joining the global FX war, maybe you should buy some gold, but I know that yields nothing either. You are the sacrificial lamb in this grand experiment conducted by the unelected officials working at some building named Eccles who seem to have little faith in the ability of the US economy to thrive on its own as it did for most of its 238 years of existence. Borrowers and debt are their only friends. To you responsible saver that worked hard your whole life, may you again rest in peace.

Peter Boockvar

11/3: wow- did not know it was that much

Emerging-Market Financial Assets Have Nearly DOUBLED Since 2008
(Composition of financial assets, emerging markets, US$ billion)

11/3: Drink up

10 percent of Americans drink 74 servings of alcohol a week -- or 10 drinks per day

The top 10 percent of American drinkers -- 24 million adults over 18 -- consume, on average, 74 alcoholic drinks per week. That works out to a little more than four-and-a-half 750 ml bottles of Jack Daniels, 18 bottles of wine, or three 24-can cases of beer. In one week. Or, if you prefer, 10 drinks per day.

11/3: Please stop breathing.

11/3: You really shouldn't beat yourself with this graph. Use total market for a base

11/2: Lower China

New data was released this week which shows an alarming rise in Chinese bad loans at the country’s biggest lenders. Across China’s top five banks, including the sector leader ICBC, average bad loans rose 9% to 10% this month as the country’s economic situation deteriorated and borrowers became increasingly unable to service their debts. The hardest hit areas were in eastern provinces, such as in manufacturing strongholds like the Yangtze and Pearl River Deltas, which have a higher percentage of privately-owned companies. Worryingly, it is likely that this contagion will spread west, into areas where companies have even less backing of the powerful Chinese government. As credit quality deteriorates, funding is drying up and small to midsize companies are running out of cash. China’s banks expect a 15% year-n-year drop in annual revenues.

EFM- maybe we can weather the global economic storm since we are  not going to be impacted by higher oil prices. But it is iffy.


11/2: Funny



11/2: Interesting

11/2: This is a conundrum what happens with rates so low if there is another recession.???

11/2: I'm not so sure I agree. If all other countries truly falter, OK. But the U.S. is far from the power and influence it used to be. Admittedly however, we may see the dollar get better when and if we hit another bad patch which is absolutely possible


11/2: Does Olive garden's problems ring a bell

11/2: Why they still buy our stuff

11/2: This tends to show how fabricated the economy is. And how tough it is to figure out the future save that it will be tumultuous


11/2: This is good



11/2: Very interesting with the "highest level ever." but if oil prices drop a lot, would it make the cost of fracking prohibitive.?


11/2: Here's an understatement



11/2: REbalancing

Conclusion: no evidence as yet for a rebalancing bonus

My conclusion is that while the subject is interesting enough to warrant further research – certainly much more than has been done heretofore, given how much rebalancing is advocated by nearly all practitioners of the investment advice profession – no evidence has as yet presented itself to confirm that there is a rebalancing bonus.

Rebalancing is certainly not necessarily harmful, unless it conflicts with another risk management strategy that better suits the investor. It is better to have an investing discipline than not to have one, and rebalancing is one acceptable default discipline – especially when the investor would fail to adhere to any discipline if his portfolio’s volatility exceeded a particular level. It should not, however, be thought of as a strategy that delivers a returns bonus as compared to other strategies


11/2: Fail

The scale of shadow banking relative to the overall economy is closing in on its pre-crisis peak even as mainstream lenders’ share of business declines, according to official figures that highlight the heft of alternative finance.

The broadest measure of shadow banking assets tracked by the Basel-based Financial Stability Board grew by $5tn to surpass $75tn last year in 20 countries plus the euro area. That represented 120 per cent of the region’s gross domestic product -- approaching the high of 123.4 per cent recorded in 2007.

Shadow banks include a broad array of institutions engaged in bank-like activities, including money market funds, finance companies, and real estate investment trusts.

Last year shadow banking comprised 24.5 per cent of financial assets, the highest share since 2007, according to the FSB. By contrast, traditional banks’ share of the sector slipped to 45.6 per cent from a high of more than 49 per cent in 2008.

11/2: High yield bonds unquestionably have risk. foreign origin more so

According to JP Morgan, the yield on high-yielding bonds across Europe has moved from 3.82% in June all the way to as high as 5.3% this month, and alongside that jump, the market for issuance has virtually halted. Instead, borrowers are turning to the loan market, though that strategy has not been going well either, as investors in loans are demanding rigid structures, pricing, and terms. The slowdown signals the end of the surge in “covenant-lite” loans, or extremely loose forms of credit, which had become common alongside QE. Sentiment on which way the market will go is split, with ratings agencies saying a return to normal issuance is likely, while top research analysts believe Europe’s macro environment will mean that credit extension remains ultra-low. Meanwhile, Euro-denominated money market funds are nearing negative yields.

11/2:           Investor Sentiment in the Stock Market

Investor sentiment, defined broadly, is a belief about future cash flows and investment risks that is not justified by the facts at hand. The question is no longer whether investor sentiment affects stock prices, but how to measure investor sentiment and quantify its effects. One approach is "bottom up," using biases in individual investor psychology, such as overconfidence, representativeness, and conservatism, to explain how individual investors underreact or overreact to past returns or fundamentals. The investor sentiment approach that we develop in this paper is, by contrast, distinctly "top down" and macroeconomic: we take the origin of investor sentiment as exogenous and focus on its empirical effects. We show that it is quite possible to measure investor sentiment and that waves of sentiment have clearly discernible, important, and regular effects on individual firms and on the stock market as a whole. The top-down approach builds on the two broader and more irrefutable assumptions of behavioral finance -- sentiment and the limits to arbitrage -- to explain which stocks are likely to be most affected by sentiment. In particular, stocks that are difficult to arbitrage or to value are most affected by sentiment.

11/2: Investing for the Long Run when Returns Are Predictable
We examine how the evidence of predictability in asset returns affects optimal
portfolio choice for investors with long horizons. Particular attention is paid to
estimation risk, or uncertainty about the true values of model parameters. We find
that even after incorporating parameter uncertainty, there is enough predictability
in returns to make investors allocate substantially more to stocks, the longer their
horizon. Moreover, the weak statistical significance of the evidence for predictability
makes it important to take estimation risk into account; a long-horizon investor
who ignores it may overallocate to stocks by a sizeable amount.

11/2:  ACA PROGRESS - Since the ACA took effect, the nation's uninsured rate has dropped from around 18% to around 13% and health insurance premiums have stabilized in some places. Not enough data have been collected to determine whether health outcomes have improved or whether the ACA has contributed to the slowing growth in health care spending. We will have to wait until after the elections to see the 2015 exchange premiums


11/2: Bears repeating

The Financial Stability Board (FSB), a key watchdog and thought leader in the industry, has just released data on the global economy which shows that shadow banking is nearly matching its pre-crisis peak in terms of overall size. In total, for the 20 countries, plus the EU, which it calculates, the global shadow banking market is at $75 tn per annum. China, unsurprisingly, is showing the fastest growth in the world, and its shadow banking market is only smaller than the US and UK’s. The global increase in shadow banking is largely due to regulation, which has forced banks away from lending, and in turn, given rise to other sectors springing up to fill the credit void. Banking’s share of lending has shrunk from 49% globally in 2008, to just 45.6% this year, while shadow banks now account for 24.5% of all lending. The US dwarfs all other markets in total shadow banking, with an industry worth $14.4 tn, while China’s is only $2.7 tn, though it is growing at 38% per year.

32 AND COUNTING - The federal government will recognize same-sex marriage in six more states - Alaska, Arizona, Idaho, North Carolina, West Virginia and Wyoming - bringing the total to 32 states and Washington DC.

11/2: Japan
Decades ago I was positive that Japan would get its economic act together. But.........

BoJ stuns investors by expanding monetary easing programme


The Bank of Japan stunned investors on Friday by expanding its ultra-aggressive monetary easing programme, saying that a combination of weak demand and a lower oil price meant that more action was needed to banish “a deflationary mindset”.

The Japanese central bank said it would step up its asset purchases so that the monetary base expanded at an annual pace of Y80tn ($724bn), rather than Y60-70tn as in the past.

11/2: Society of Actuaries RP-2014 Mortality Tables

Long and tedious but valuable in understanding how much longer we are expected to live. I am afraid to look

11/2: Not very bright

Simonov and Andriy Bodnaruk of the University of Notre Dame compared the portfolios of 84 mutual fund managers in Sweden against the portfolios of untrained investors who had similar incomes and backgrounds. The findings are applicable to the United States and most other countries in the global marketplace.

Simonov said the inability of financial experts to make better investment decisions than their untrained peers is likely due to a lack of talent and the fact that succeeding in the mutual fund market is an extremely difficult task.

"I am not disputing that there is a very small fraction of managers who are extremely talented," Simonov said. "But there are very, very few of these superstars, and the average investor probably can't afford to invest with them anyway."

11/2: the fiscal multiplier.

The multiplier, a theoretical concept invented by John Maynard Keynes in the 1930s, is the most fundamental concept in the whole of macroeconomics. It measures the eventual impact on the economy as a whole, GDP, of a sustained increase or decrease in public spending. An increase in such expenditure brings more people into work, they in turn will have more to spend, the companies whose products they buy will have more revenue, and will employ even more people. The initial impact is multiplied through the economy

An inescapable problem for these highly mathematical models is that they do not take into account sentiment, the narrative which emerges around policy changes. Osborne’s fiscal contraction has gradually created a positive narrative across companies, so they are willing to create jobs and invest. Psychology rather than hardline maths is needed to tell us what the multiplier really is in any particular situation.

11/2: \What a switch

Christine Lagarde, the IMF chief, said her organisation had “underestimated” the strength of the recovery in Britain, and the IMF now believes that the UK will be the fastest growing of any major economy in 2014

10/31: GDP good

Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 3.5 percent in the third quarter of 2014, according to the "advance" estimate released by the Bureau of Economic Analysis.  In the second quarter, real GDP increased 4.6 percent.

BUT Greenspan says buy gold.


10/31: Working with dementia

Good stuff


10/31: not good

Over the last year, China has been on a strong economic mission to guide its economy out of its reliance on low cost manufacturing and exports and into a more domestic consumption-based model. The success of this transition is seen as key to maintaining the country’s growth rate, and in turn, the solvency of its huge networks of banks, trusts, and credit entities. New data has emerged on consumption, and while somewhat confusing, points out that China’s level of consumption is falling. Major retailers in China, including Unilever, Nestle, and Colgate-Palmolive, all saw their quarterly sales decline significantly, with Unilever seeing a 20% fall year on year. In total, the top 100 retailers in China have only seen their sales rise 0.1% this year, and for the third quarter, sales dropped significantly, reversing gains of the first and second quarters of 2014. However, Chinese government data, which many expect is heavily biased and manipulated, reported that through the third quarter, consumption spending grew 12% this year. Experts agree that if the figure continues to grow, it will be in the single digits, rather than the chunky 15% growth rates seen previously.

10/31: Bonds/Treasuries

Equity markets have largely recovered from the selloff two weeks ago, but bond yields are still very low, and according to industry analysts, Treasuries are seeing huge orders from funds. Many speculate that since Treasuries are infinitely more liquid than many credit products, funds are rotating heavily into them in advance of what they see as a high level of redemptions set to hit their businesses. Additionally, the undeniable wariness that the market selloff has put into investors seems to be leading many to close out equity positions and take gains, moving cash into safe sovereign bonds for a future they see as increasingly sluggish, with low growth and low inflation. The head of fixed income ETFs at Van Eck Global summed it up this way, saying “the more fund managers add Treasuries to their corporate bond portfolios, either as a hedge or as liquidity substitute, the more pressure we will see on [Treasury] yields to drop. That may be the reality of the next couple of months.”

10/31: dire

A Financial Times guest writer, Satyajit Das, who is a former banker and author, has written a very intriguing essay in today’s publication. Das argues that a complex mix of regulation, sovereign creditworthiness, and illiquidity are set to conspire to bring about a new crisis. Das makes a compelling case that as the new capital rules for banks have incentivized such firms to hold sovereign debt as collateral, banks have become overexposed to sovereigns. Das’ crisis map unfolds with the first step as a sovereign credit downgrade. Once this happens, banks will automatically take losses on their balance sheets and on their derivatives contracts (in the form of CVA scores) and will be forced to post more collateral, this time being compelled to hedge their sovereign exposure by shorting government bonds or currencies. The decreased creditworthiness of swaps will flow the system to all counterparties, forcing everyone to hedge, and thus both accelerating the decline of prices in sovereign bond markets, but also radiating into all asset classes, as the use of creative hedges grows alongside lower liquidity in some areas. All of these issues will be greatly exacerbated by herd behaviour, low credit liquidity due to regulations, and the huge similarity of risk models between financial institutions. Ultimately, the shocks will spread to the wider economy through higher borrowing costs, extremely tight credit, and weakness in investment and employment.

10/31:One in three. That's number of children in the United States living in poverty.

the share of U.S. children living in poverty has actually increased by 2 percentage points since 2008. Overall, 24.2 million U.S. children were living in poverty in 2012, reflecting an increase of 1.7 million children since 2008. "Of all newly poor children in the OECD and/or EU, about a third are in the United States,"

Finding Balance for the Caregiver
16 Stress Reducing Strategies

By Lisa Bailey 


When my husband Phil’s colorectal cancer returned in October of 2006, this time in the liver and lungs, I found myself stressed to the max.  With my full-time job as a kindergarten teacher, my commitment to my adult children and grandchildren, and keeping tabs on my teenage daughter, adding compassionate caregiving to my life’s work demands from me an incredibly difficult balancing act. 
The following sixteen coping strategies have helped me in my attempts to live a balanced life.  Because caregiving is such a universal task, faced by nearly all of us at one time or another, I hope you find these strategies helpful as well.

  1. Make all choices from a solid base of integrity. I try to make medical and personal choices from the base of my Christian faith, which helps free me from second-guessing myself.
  2. Be clear about today’s reality. Don’t imagine things are worse than they are.  Enjoy the good parts of today and don’t let worries for tomorrow take over your emotions and thoughts.
  3. Talk honestly to family and friends. Honest, frequent communication with close family and friends from the start of diagnosis is much easier than trying to play catch-up later. I discovered a wonderful, free Internet service at  which has allowed me to create a Web site to communicate regularly about Phil’s health. 
  4. Expect and prepare for tough talks.  Family and friends process the news about a serious illness at their own pace. They will not accept the reality of the illness on a schedule that meshes with yours. This means that sometimes family and friends will not understand the tension of your caregiving lifestyle, especially at first. This requires a difficult conversation about what the illness is, how it will be treated, and what kinds of side effects will be expected from the treatment and the disease itself. It is helpful to have a family conversation with the doctor present.This provides an opportunity for questions to be answered accurately.
  5. Learn the medical lingo.  It will help you as a caregiver and a medical advocate to learn the lingo surrounding your loved one’s illness. The Internet is a helpful resource, but you need to learn what Web sites can be trusted and what Web sites have a hidden agenda. I have included a list of trusted Web sites I have used for medical information.  However, even with a trusted Web site, don’t believe everything you read. Not all information will pertain to your loved one’s situation and you can worry yourself into a frenzy over some Internet information you have read.  Ask questions of the doctors and nurses. Check the accuracy of your information if you are at all troubled or in doubt.
  6. During treatment, pain or pain medication might do some talking.  Be aware that pain, stress and pain medications will release the patient from their social “filter” and they can and probably will say some interesting and difficult things at times.  Actually, caregivers do this, too, as stress lifts our social filters at unexpected times—forgive yourself as well when this happens. Listen and be compassionate as best you can. Children and teenagers will need help understanding the changes in their loved one’s personality, especially to know that the changes are not permanent. 
  7. Control what you can control. Lots of articles about stress-management advise letting go of control; however, I have found that being in control of some areas of my life has greatly reduced my stress. 
    1. Get help with housework—paid or unpaid.  Help with household chores has helped to make our home a cleaner refuge for Phil as he recovers and a sanctuary for me. 
    2. Get help with yard work—paid or unpaid.  Our backyard is our vacation destination this year; we eat most meals on the deck, enjoy the variety of birds that visit our birdfeeders, play cards, do art work and garden.  Help with yard work makes this vacation destination possible.
    3.  Prepare meals in advance and freeze them.  I do bulk cooking and freeze pre-prepared meals
    4. Keep bills and insurance paperwork organized so there are fewer financial surprises. Make necessary phone calls to insurance companies, and pay bills, or call to arrange payments, on time.
    5. Plan your work; then work your plan.  Be efficient at your outside job and in taking care of home stuff.  Don’t let things pile up. 
    6.  Do three things every evening before you go to bed—laundry, dishes and take out the garbage. The morning will be much more of a gift.
  8. Let go of what you cannot control. For me, this means “let go and let God.” I carry a scripture in my pocket from Jeremiah 29:11 which says, “For I know the plans I have for you,” declares the Lord, “plans to prosper you and not to harm you, plans to give you hope and a future.”  Cancer is what it is; I cannot change that, but I can and do trust God for our future.
  9. Nest.  Everyone, especially people who are recovering from illness or injury and their caregiver, needs a comfy chair—a place to relax and rejuvenate. Make a comfortable nest for your loved one and for yourself by adding afghans, pillows, fresh flowers, candles, books and great music to your comfy chair area. This is important to do both at your home and at the hospital should there be an extended stay there. 
  10. Make comfort food.  Think about what your patient is hungry for, and then consider the details—digestibility, comfort, correct textures, temperature and presentation.  A compassionate and informative book that I found helpful as I prepared food for Phil following chemotherapy and surgery is Laurel’s Kitchen Caring: Recipes for Everyday Home Caregiving, by Laurel Robertson, with Carol Lee Flinders and Brian Ruppenthal, R.D.  Laurel speaks with such love for both the patient and the caregiver and her encouraging voice revives my spirit for caregiving, especially in providing good nutrition for healing.
  11. Enjoy life today.  During my husband’s chemotherapy treatments, our world becomes pretty small.  We find that watching television is an important diversion, and we have become fans of shows we probably never would have discovered without some enforced downtime. We also play cards and Monopoly, put puzzles together and rent many movies.  I found a new interest in sewing, knitting and watercolor painting.  Phil, a drummer, has never stopped his daily drumming practice or working at his business from home.  We try to enjoy simple pleasures everyday.  We remember that Phil is a person with interests, not just a cancer patient.  And I, too, am a person with interests; not just a cancer patient’s caregiver.
  12. Journal for yourself.  There are so many ways to re-center yourself, but none works as well as journaling, in my opinion.  Even if you have never kept a journal, starting one now will help you clarify feelings, manage the stress and plan the work you need to do as caregiver. 
  13. Keep a vision for the future.  None of us comes here to stay; we know that.  But we also know that we can “grow until we go,” and we should.  One scripture that came right to mind when Phil was first diagnosed with a recurrence of cancer was “Where there is no vision, the people perish.” Proverbs. 29:18 KJV. We make plans for our future.
  14. Give.  While I have learned through Phil’s illness to receive the gifts of help, encouragement, prayer and love from other people, Phil and I continue to enjoy giving as part of our marriage. We enjoy praying for other people, talking to other patients in the waiting rooms, encouraging others as much as possible through conversations both in person, in email and through good, old-fashioned snail mail. Giving keeps us feeling emotionally and spiritually full and is always worth the effort.
  15. Take good care of yourself.  Eat good food, exercise a little, rest well and learn to say no to outside demands.  See your doctor and dentist for checkups. Get away from the house now and then—even if it is just to the laundromat to do the bulky wash. 
  16. Release yourself from expectations for perfection. As humans, we all experience finitude, our “feet of clay” when we do not have infinite energy, wisdom or capabilities to manage our lives. This is normal. Get through each day as best you can, and don’t dwell on mistakes.   



10/31 What problems do the elderly have  

1. Ending up with wet or soiled clothes.

This problem affected 43 percent of the study participants who needed help with going to the bathroom.

2. Getting stuck inside.

This problem affected 30 percent of the study participants who needed help with going out.

3. Having difficulty going to places in their own homes or buildings.

This problem affected 26 percent of the study participants who needed help with moving around their homes or buildings.

4. Making a mistake when taking medicine.

This problem affected 19.9 percent of the study participants who needed help with taking medication.

5.. Going without bathing, showering or cleaning.

This problem affected 12.9 percent of the study participants who needed help with bathing or cleaning.

6 Having to stay in bed is just the sixth most common bad outcome. That "adverse consequence" has affected 11.5 percent of the people who need help with getting out of bed.


My Sad, Sad & Happy, Happy Story

By Patsy Robertson


Today I hate my bipolar because I feel depressed and very sad. But it will not last. I will soon be happy again. I skipped one or two doses of my medication and that always throws me into a miserable sad depression. As I drove to my psychiatrist's office today to pick up my Eskalith & Concerta I became vividly aware that I thought about dying. But that will not last. I will soon be happy again!

I was diagnosed with Major Depression/Bipolar & ADD in 1994 when I checked myself into the hospital for a week. I was broken mentally & physically unable to work or get out of the bed for that matter.

This was not the first time I had been treated for depression in my life. The first time I was a young mother under a great deal of stress from an abusive husband. I was first hospitalized for two weeks and then one week shortly after my coming home the first time. I was not given medication. A beautiful young mother was my room mate. She got to go home on a weekend pass to see how she would cope at home. She never returned because she killed herself. This left a very strong impression on me. I decided then that I would run to my doctor anytime I felt the same feeling of depression coming on.

That seemed to work until around 1985 when a traumatic episode between my [new] husband, my daughter & I happened. I went to a psychiatrist for help because I recognized the exact same feelings I had when I was in the hospital. The feeling of hopelessness & darkness. My psychiatrist was the first to tell me about anti-depressants and how it would be trial & error to discover the right medication for me. I was very pleased to know he understood my depression. I began taking Desyrel & still it every night before going to sleep.

My father died in 1993, my mother moved in six months later. My daughter-in-law had a mastectomy at seven months pregnant when diagnosed with breast cancer. I was five years breast cancer free at the time. My grand son was delivered c-section & almost died when his lungs collapsed. My husband lost his "big important corporate job" after surviving 3 buy-outs. He & my mother freaked out because their lives were not going as planned. Everything began falling apart, I thought I was going crazy - it seemed everything was my fault. Oh! My middle child came to us for help with a "crank" addiction.

I knew I needed help. I found a physiatrist & therapist that I really liked.  I began taking an additional anti-depressant. I worked very hard at being strong. I wanted to keep everyone & myself happy. I loved my job. But it was getting harder to pretend everything was OK. I was a special events coordinator at a country club. I directed PGA golf tournaments, tennis tournaments, weddings, golf outings, holiday parties for the club members and booked corporate meetings & golf outings. I worked with a lot of celebrities & the press. I had to get well. I could not allow anyone to know how sick I was. The mental began making me physically ill. I could barely walk at times. I had sores on my head & in my mouth. I was broken physically & emotionally.  

When I wasn't at work, I was in bed. I would rest or sleep until it was time to go back to work. I became a work-a-holic because it was fun until I couldn't figure out what to do next. I always had 10-12 event files on my desk. I could not figure out which file to open first. I became so overwhelmed that I would take a walk around the club house. I would visit the pro-shop & the dish washers - anyone I could find to talk to early in the morning. Then I would go back to my desk & try it again. I actually fired my assistant because she made a mistake. This is something I am ashamed of. I was trying to protect myself because she had to be better at my job than I was in order to protect me. She was a wonderful person but I would never have fired her under normal circumstances. I was not operating with a normal mind & I knew it. But I thought it would go away. I couldn't loose my job.

My boss brought the food & beverage manager into the office to assist me. I knew I wasn't fooling anyone. I had always been super on the job and I could barely function on the job now.

My boss called me into his office one day & very kindly suggested I needed help. He gave me the name & phone number of an intake counselor at a wonderful facility here in Atlanta. I went right away and this was the beginning of some very scary times for me but after ten years I am doing better than I ever dreamed I would or could.

The most difficult part for me was how my family responded to my "mental illness" to  my "depression" to my "Bipolar" and I've never told them about ADD! ha! There is nothing funny about what I have been through or what I have to do now but I have found a sense of humor is necessary for me.

My oldest son told me that depression is not a medical illness while his wife said "yes, it is." My daughter called me "Elvis" because of all the meds I was taking. She will never know how much I would like to dump the meds. It is work to keep your medication organized & refilled. Then you have to remember to take it at a certain time each day & usually with food. Most people don't understand how important anti-depressants are to me.

Every single time I decide to skip a pill or run out of a prescription & skip a pill I find myself thinking about dying. I want to die. Then I remind myself that it is skipping the meds that cause me to feel this way. I am convinced 100% that if I stopped taking my meds I would want to or try to kill myself. I don't want to die, I want to live! I am beginning to feel so much better now. I am not going back where I was. I am not ashamed nor do I feel weak for taking my meds. I feel smart, I feel like I am enabling myself to attend my grand children's graduations & weddings. What would they think if I gave up? That keeps me going to my shrink more than anything on this earth.

It is very difficult being bipolar. I have to take Concerta now to "wake me up" because the Eskalith makes me so flat. But by sticking to the regiment I am beginning to reap some real benefits. I have a group of ladies in my home every Thursday night for a Bible study. I hadn't entertained in my home since 1998! They are new friends and they accept me just the way I am & I them too! It is so wonderful.

I began writing a book in 1982. I am now writing again. With this "Bipolar/ADD mind" of mine it is a challenge! But I don't care if I never get it done, I am so happy I am writing again. I did put the book together in a large binder. That is a major achievement for me. There are days that I look back over the last one to three days and it seems I floated through them. I do get tired when I have a string of mania days. I was mania most of my life now that I look back on it but without the drops. The drops are painful I think because I try to analyze them too much. But I have to remind myself even as I write this that the drops usually come when I miss my medication. In a perfect world they would make it easier to get the medications. There are such tight restrictions on Concerta for example that I have to drive all the way to my doctor's office to get a new prescription every 30 days. This should be easy, but for me it is not very easy. My daughter is allowed to pick it up, but sometimes I forget to give her & my doc enough notice.

If not for the researchers, the doctors & the trials I would have no hope. I am able to live a good life again because I have fought hard to keep my mind and I seek out good psychiatrists to help me. I am fortunate because I have a family doctor who insists I go to my shrink for my psychiatrist medications. It is not easy. It is very hard battle but it is a fight worth fighting.

Ever been sick or in pain for a long time? You will get depressed.

The Assistant Secretary for Planning and Evaluation (ASPE) is the principal advisor to the Secretary of the U.S. Department of Health and Human Services on policy development, and is responsible for major activities in policy coordination, legislation development, strategic planning, policy research, evaluation, and economic analysis.

10/30: Once in awhile humans do good

The Espanola giant tortoises, a species that can live for over 100 years, had numbered in the thousands but dropped to 15 by 1960 due to human exploitation, the study said. Between 1963 and 1974, conservationists brought the 12 female and three male surviving giant tortoises into captivity. Over 1,500 of their offspring have since been released onto the island, and the species’ survival no longer requires human intervention.

10/30: I have been saying this for years

some of the most supposedly financially knowledgeable people -- mutual-fund managers -- don't make better financial decisions than other people, according to anew study by Michigan State and Notre Dame researchers, as reported in The Atlantic.

It's the latest evidence that a years-long campaign to help normal Americans achieve "financial literacy" is ineffective at best and misguided at worst. As the Atlantic notes,expert stock-pickers in finance and forecasters in other fields have been derided for decades as no better than dart-throwing monkeys.

When it comes to getting ordinary people to know more about finance, however, the consensus has been that this time it’s different. On the surface, it’s a well-intentioned and uncontroversial mission: Helping people help themselves by making better decisions. And there's plenty of evidence that people have a scary lack of financial knowledge: One study found that just a third of Americans would correctly answer three simple financial questions.

And those questions are models of transparency compared with the opaque language consumers often face when making even the simplest financial decisions. The goal of making people financially literate seems to imply that it's the individual’s responsibility to safely navigate what is often intentionally inscrutable financial language.

The same companies who create the problem of financial products Americans can’t understand push financial literacy as the solution. For instance, Bank of America thinks the key is an online course. The financial industry’s self-regulatory organization has an entire foundation devoted to investor education.

But financial literacy in this gauzy, generalized form simply doesn’t work. The Cleveland Fed found no “conclusive support that any benefit at all exists” from financial education as it is currently taught. Shocking no one who has been to high school, one study showed that taking a financial literacy class in high school does nothing to improve financial literacy.

And a study by researchers at the Brookings Institution could not find “strong evidence that financial literacy efforts have had positive and substantial impacts."

In a 2011 presentation titled “The Financial Education Fallacy,” Lauren Willis, a professor at Loyola Law School, shot down the idea that “ordinary consumers would have made better mortgage choices and would have accumulated sufficient precautionary savings to weather the recession" if they'd just been financially educated. Straightforward consumer protections, like putting limits on how many single stocks people can own in retirement accounts, are most effective. Financial education is no substitute for financial regulation, she argues.

There is evidence that giving people specific information about a specific product (say, about credit card debt for people who are interested in applying for a credit card)works better. It’s not easy, given the mountain of details involved. But single-serving consumer information is likely to be far more helpful than vague goals of getting Americans to solve their own financial problems by thinking them through.

Personal finance author Helaine Olen has called financial literacy “both a failure and a sham.” This conclusion deserves to be widely accepted.

When mutual-fund managers are making dumb decisions, it’s time to admit that making average Americans generally more financially literate is not a useful goal. Starting with clear-cut consumer protections and unbiased information about specific financial products is far more helpful.

Uniform (Im)Prudent Investor Act- way out of date

For the very few that will read five pages, take a gander at commentary on why this rule is antiquated.  It is a very sophomoric regulation that is open to serious errors in interpretation primarily since those rendering an opinion are clueless to the real life fundamentals of investing.
I don't care if they are from the industry, government, are litigants, judges, the Tooth Fairy, et al. One of the most obvious missteps is the continuing lack of specificity to RISK, If you cannot get that right (and they can't since risk of loss is not taught) then the entire review of prudence is highly suspect

10/29: Good Times economic commentary but shows the many different commentaries by economists

"We need more time to evaluate whether we should be doing any updating. And I would say the financial market movements have not been triggered by very many real economic indicators.”
Boston Federal Reserve President

The real art of conversation is not only to say the right thing in the right place but to leave unsaid the wrong thing at the tempting moment."

-- Lady Dorothy Nevill,

10/29: Must be bad overseas if Sweden is doing it"

Sweden’s central bank cut interest rates to zero – a record low – as it stepped up its increasingly desperate fight against deflation.

10/29: Just an example

10/29: Slowing a lot overseas, including china.

The economic situation in Europe has deteriorated, the unemployment rate in the US has fallen below 6%, and the Fed looks poised to conclude its quantitative easing program this week.

Volatility has returned to markets, with the S&P 500 recently declining more than 9% before sharply rebounding, while the bond market had one of its most volatile days in history as the US 10-year yield fell 37 basis points in just a few hours. 

And in the background of all of this is the declining price of oil, which on Monday fell below $80 a barrel for the first time in over two years, and a Russian economy that is looking at a dramatically depreciating ruble. 

EFM- U.S. fracking has hurt a number of oil exporters and that will destabilize many foreign countries that have little to fall back on. U.S. consumers are seeing the benefits but we could end up on the downside as our exports will drop. Another recession? Don't know but a major correction is now quite possible. again, as an investor one must accept a 10% to 15% drop in the market. But it starting to get dicey as regards DCAD noted above. If you have not viewed that video yet, I sure would take a look now. .

10/28: Housing

1. In 2013, the average size of new houses built increased to an all-time high of 2,679 square feet (see blue line in top chart), and the median size new home set a new record of 2,491 square feet (see red line in chart). Over the last 40 years, the average home has increased in size by more than 1,000 square feet, from an average size of 1,660 square feet in 1973 (earliest year available from Census) to 2,679 square feet last year. Likewise, the median-size home has increased in size by almost 1,000 square feet, from 1,525 square feet in 1973 to 2,491 last year. In percentage terms, the average home size has increased by 61.4% since 1973, while the median home size increased by 63.3%.

2. Meanwhile, the average household size has been declining, from 3.01 persons per household on average in 1973 to a new record low of 2.54 persons per household last year, a reduction of almost one-half person per household over the last 40 years (see brown line in top chart).

With the average new house in the US getter larger in size at the same time that American households are getting smaller, the square footage of living space per person in a new home has increased from 506.6 to 980.7 square feet using the median size home, and from 551.5 to 1,054.7 square feet using the average size home. In percentage terms, that’s a 93.6% increase using the median home size and a 91.2% increase using the average home size. In either case, the average amount of living space per person in a new home has almost doubled in just the last forty years – that’s pretty amazing.

3. What about the cost of new homes over the last 40 years? On a per square foot basis using median home prices and median square footage, the inflation-adjusted price of new homes has been relatively stable since 1973 in a range between about $105 and $125 per square foot (see bottom chart above). And the price of just under $106 per square foot for new homes in 2013 was almost 16 below the peak of $125.50 per square foot for a new home in 2004, and also below the cost per square foot in every year during the 1970s and 1980s, and below every year of the 1990s except 1992 and 1993.

10/26: Skin in the game

One of the main aims of the current round of US financial regulations was to ensure that banks had “skin in the game” as it concerned loan risk. Regulators believe that the overwhelming levels of securitization which occurred leading up to the Crisis made banks highly complacent above giving out loans, as they stood to lose little if they defaulted. The Dodd-Frank act sought to correct his by forcing lenders to hold at least 5% of the risk of a loan on their balance sheets. However, a small loophole, which provided that super safe mortgages did not need any part held by banks, has blossomed and overgrown the intent of the law. According to Barney Frank, the architect of the Dodd-Frank Act, the US’ most comprehensive set of financial reforms for several decades, “the loophole has eaten the rule, and there is no residential mortgage risk retention.” This means that despite years of regulations, there is virtually no system in place to contain explosive securitization levels and rampant over-lending besides the wisdom of mortgage-backed securities buyers, who have shown little restraint in the past.


10/23: Not a good sign with china

Chinese real estate figures have just hit the tape, and the results are very poor. Prices fell for the sixth straight month, and overall, prices dropped in 69 out of 70 major markets. The country is currently suffering from chronic oversupply, and reticence by buyers. Chinese property has been falling for several months, but the market was hoping for some turnaround in these figures, as the government has been continually reducing lending and borrowing requirements in an effort to boost the sector. Most startlingly of all, the figures were accompanied by data on real estate investment which showed that, astoundingly, investment in new property capacity expanded 12.5% in the first three quarters of this year, meaning builders are pouring more and more money into the sector despite the dire outlook. Agents in the country say that they have been disappointed by what has been a very weak pick up in demand on the back of the government easing lending and borrowing rules.


With commodity prices falling this far and fast, maybe it does bode well for consumer economics.

Across a wide range of commodities, prices are falling and sometimes falling fast. The Bloomberg commodity index – which acts as a benchmark for commodity investments – fell to its lowest level in five years this week. Prices are being pushed down by the increasing supply of most commodities and a weakening global economy, including a slowing China, the world’s largest consumer for many of these raw materials. Whether it is oil, corn, iron ore, coal, cotton or copper, prices are falling quickly.

The world has seen several rounds of quantitative easing (QE) over the last six years in the US, UK, and Japan, mostly with little to moderate success, but the most effective round yet might be just beginning. The global decline in commodities markets globally, which has seen prices drop in nearly every market from food, to metal, to energy, will have a hugely positive effect on nearly all consumers, no matter their geography or economic power. Significantly lower commodities costs, as we are seeing now, put real money back in the pockets of consumers, and free up disposable income which can be out into other areas. The IMF estimates that the declines we have seen so far will automatically boost GDP by 0.5% globally, and if sentiment grows, could raise this figure to 1.2% growth. According to economists, the current price falls mean that 1% of the world’s GDP flow back to consumers from commodities producers, and generally, half of this money will be spent. This means that roughly $320 bn will flow back into other areas of the economy, boosting growth. Such price drops will affect countries differently, with big producers like the US, Brazil, Russia, and Saudi Arabia seeing the least benefits. Net importers gain the most, though, in the case of the US, lower oil prices could lead to much larger consumer spending, which might be a net positive.

10/26: Read this article on risk and the comments

Here is my reply


Yes I do have a better way. It is direct, non emotional and, in my mind, easy to communicate. I will only consider those 50/55 and older at this point and only for the middle class. Yes the very rich can use the fundamentals but the assets of a business et al are too messy for this review. Most of the time what I am suggesting is for those that will not have a taxable estate.

First and foremost a very detailed budget needs to be done. I have one of the most detailed ones for middle class-  I have not liked what I have seen so far with standard questionnaires. There are two sections. One for those not yet retired and next to it is the estimated while retired. Each section  is reviewed with the client to reflect areas that may be questionable. (Health care costs are tough.) You can get involved with innumerable numbers after that- inflation, returns, time etc. to figure out what the “lump sum” will be needed at retirement. N (time)  reflects their actuarial lifetime plus a fudge factor. (Minimum 5 years). The return, i, may offered with two or three estimates. Inflation is done about the same.  And with a HP12c or similar, you can determine a few scenarios of present value for the client. The idea of doing tons of these strains credulity- stay focused to being conservative or middle of the road. Also one should be aware that when looking out 30 years or so the current analysis is fraught with divorce, illness, and so many other factors where it makes the numbers game intrinsically flawed.

The client does NOT pick what they want to do, has done before or hoped to do in the future. The planner has to do the analysis since only they have the skills and knowledge (chuckle). Want to impress? Do a couple on the HP in front of the client. If you are solely dependent on a software program to do the basics, you will not be able to do a formal risk of loss addressed below. (Why? There are no software programs to do risk of loss. )

Anyway, compare the PV with the asset base available and, voila, you now may not need to invest anything since there is enough assets already. Or the retiree needs to take a LITTLE risk. That may be attainable. A shortage? Well the best thing to do is have them reduce the budget. If not,  one can increase the return (perhaps) by taking more risk. But the budget determines the risk, not the questionnaire. 

In any case, no budget? No client. 

Now to the fun part. Let’s just look at risk. And assume we are just looking at the client questionnaire to see the risk comfort zone identified by the consumer. There is nothing in the industry set as a standard mainly because 1) they are stupid or 2) they know that the number computed might scare consumers into just buying CDs or doing nothing. But you can still do the job through direct comparisons. This is somewhat simplistic due to the obvious constraints but let’s say the consumer decides they do not want to lose anything. End game since you do not have an investor. How about a conservative entity. In such regard any investor should accept a 10% to 15% loss in equities since that is the amount of a normal market correction. If they cannot handle that, no investor. So maybe a conservative investor has to be willing to take a 20% to 25% hit.  Moderate risk= probably something close to 30% to 40%  drawdown. Aggressive is probably closer to 40% to 60%. Speculative is up to 80% and is reflective of the dotcom mania.  (I am not using any outliers on a standard deviation curve). This is just equities since the bonds will have a lower standard deviation to determine overall risk, but they may also be losing money every year for quite some time. So you lower the overall risk but have a negative return? Illogical but I leave that for another time.    
Does that sound reasonable/? Then what’s next? Just figuring out what might happen to the portfolio/allocation with a major economic bust.

As a note, standard deviation/volatility is NOT risk ipso facto. They are one of many risks that will occur but I use this to do the comparables. 

Let’s say you will invest for 9 years. Say the standard deviation of the equity section of the portfolio is 30% (use historical SD, not current (still too low). As another note, I do not like to use historical numbers if I can avoid them, but I have no choice here. The SD drops by the square root of the number of years. 30/3= 9%. So over time, the SD goes down. DO NOT USE THIS TO EXPRESS RISK OVER TIME.

What about if something went wrong and you did nothing? Take 1 minus SD for the number of years to the power of the number of years, (9). That represents how much money is LEFT at the end of that period. You can do the numbers for 15 years or so but I think the variables are far too unsettled  and it’s not worth the bother.  Go ahead and do the S&P 500 for 5 years with an initial SD of 20%. You will end up with 63% as what would be left. That is 37% lower than what you expected. (I cannot go into detail for every issue or interpretation here.) Then look at the equity losses for 2000. 44%. Look at the losses for 2008 top to bottom. 57%. In short, using the S&P 500 for 100% of the portfolio can result in a 50% loss  calculated/anticipated at the end of the period. Is that conservative?? Not even close. So maybe you use only 25% of the portfolio for equities. Well it sure could /would be a lot better depending on the risk of the other assets. (As I said, it will take more that I have time for here to address those.)

Is that the end? Not even close.

If it was necessary to use 100% equities to make a retirement, et al., could the retiree take a 50% hit because that is essentially what the industry says you HAVE to since the industry does allow any leeway to just sitting there. And therein is the fallacy/fraud/ineptness with such rule of thumb. Just look at the devastation in 2000 and 2008. No way were retirees could do that in the past messes nor certainly could they so it with this next mess. Right now advisers are trying all sorts of gimmicks to correct their incompetence by adding non correlated (supposedly) assets. This is a discussion in itself but recognize this per Professor Diebold of Wharton School, “The dirty little secret of diversification  is that the only thing that goes up in a down market is correlations” And from Taleb  Co-association between securities is not measurable using correlation," because past history can never prepare you for that one day when everything goes south.  "Anything that relies on correlation is charlatanism."  . 

If you are not going to try to alter those losses, then the investor/401k participant has to be told that their $100,000 account will lose $50,000. You now have  changed the game of investing by informing the investor of the potential loss but also by stating or inferring that you are going to simply rely on past statistics of “the market always comes back”.  You are going to do nothing.
(As regards rebalancing see Michael Edesess)

In short, you now know what to do. You can determine the allocation that a consumer must take for retirement (or other) and explain simply what exposure there is. Due to this economy I tend to use rough numbers for one year since 1) I feel that a mess is not that far off and 2) as stated, going out 15 or 30 years just seems ludicrous.

Risk questionnaires should use a risk of loss similar to that above. Then we all talk the same language. The numerical risk of loss is done in more detail in two videos at These were not made with CE credit in mind so view accordingly

Is that all? No because there are ways to limit the losses unemotionally and objectively but that is another review altogether. But even more important for retirement success.

10/26: Doesn't seem to be working though

Russia’s rouble plumbed new depths against the dollar on Thursday after reports that the country’s biggest oil company made a request for more than Rbs2tn of state cash that could add to the already acute pressures on the currency.

10/26: All fall down

 In the face of near deflation, and widespread recession, Eurozone ETF’s listed in the US have just seen their largest outflows on record. According to Markit, just this month, Eurozone ETFs have seen outflows of over $3 bn, compared with net outflows of $2.2 bn in August, which were already the largest to ever occur since the ETFs’ creation a decade ago (the worst times of the Eurozone debt crisis included). Part of the issue is the weaker Euro, which led investors away, but much of it was simply worries over growth. Interestingly, despite its strong growth, the UK has not been able to escape outflows either, and British ETFs saw $700m declines. Likewise, European equity funds have seen major withdrawals recently, with $5.7 bn flowing out just last week.

Yet the US is better with its fabricated economy.


Retirement Plan Deferral Limit Increases in 2015

October 23, 2014 ( - The Internal Revenue Service (IRS) announced cost of living adjustments affecting dollar limitations for pension plans, 401(k)s and other retirement-related items for tax year 2015.

The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,500 to $18,000. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $5,500 to $6,000.

Effective January 1, 2015, the limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) remains unchanged at $210,000. For a participant who separated from service before January 1, 2015, the limitation for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying the participant's compensation limitation, as adjusted through 2014, by 1.0178.

The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2015 from $52,000 to $53,000.

The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $260,000 to $265,000.

The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of key employee in a top-heavy plan remains unchanged at $170,000.

The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a five-year distribution period is increased from $1,050,000 to $1,070,000, while the dollar amount used to determine the lengthening of the five-year distribution period remains unchanged at $210,000.

The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) is increased from $115,000 to $120,000.

The dollar amount under Section 430(c)(7)(D)(i)(II) used to determine excess employee compensation with respect to a single-employer defined benefit pension plan for which the special election under Section 430(c)(2)(D) has been made is increased from $1,084,000 to $1,101,000.

10/26: Fraud

  • Ten percent of older individuals experiencing cognitive decline said they had recently experienced fraud.
  • As cognitive difficulties increase, this study confirms that seniors were more likely to have been victimized.
  • Confirming a finding reported in a previous blog post, over-confident older people were more vulnerable to fraud.
  • Fraud victims in self-assessments also report that they’ve become slightly more likely over time to take on risks, which also makes them more vulnerable to fraud.
  • But people who’ve managed to avoid fraud have less tolerance for fraud than they once did

10/23: Good for Them

A new survey of baby boomers, from those in their late fifties and above has shown some very interesting and relevant insights into how they handle their wealth. Opposed to generations before, 71% of those aged over 60 say that they intend to spend nearly all their wealth and leave little or none to the next generation. This fact runs contrary to generations of people who were keen on devising long-term plans to preserve and grow their family’s wealth. In their lifetime, the baby boomers have benefitted from vast wealth gains flowing from a long-term housing boom, massive privatization, and a water tight pension system. Even though they are getting older and retiring, politicians are still very focused on their attention as they both command huge amounts of capital—good for campaign contributions—and are very active in polls—85% of boomers vote regularly.

10/23  Is QE light like the CFP light

After many months of announcements and discussion, the European Central Bank has finally launched its QE-light campaign with targeted purchases of Eurozone covered bonds and asset-backed securities. The bond-buying began on Monday, but quantities are unknown. The ECB says it will announce how much it has bought in the previous week every Monday as long as the programme is running. The exact bonds already purchased are unclear, however, “purchases included at least two Spanish issues, one German and one French”, and were supposedly with durations of two to six years. They are thought to have been bought from BNP Paribas and Societe Generale. The ECB announced the programme last month as a means to combat recession and disinflation. Markets, however, are convinced that the measures will not be enough to boost the Eurozone’s economy, and many are calling for full scale quantitative easing.


The Art of Compassionate Communication for Elder Caregivers

By: Jill Sarah Moscowitz


“No one can ever be fully prepared for the challenges of care-giving. The tasks and responsibilities involved can be demanding, even more so when caregivers themselves are frail, have been thrust into their role unexpectedly or reluctantly, or must care for someone who is uncooperative or combative.” - The Merck Manual of Health and Healing

Caregivers can face overwhelming physical, financial, and emotional demands as a function of their service. In the face of these challenges, communication can sometimes be difficult. This article presents techniques for compassionate communication, as well as ideas for caregiver self-care and empowerment.

Communication is a process that allows a cyclical exchange of information through speaking and listening. However, as we all know, communicating is not as simple as that. Effective communication requires clarity from the person who is speaking and openness and attention from the person who is listening. This takes great commitment.

And to be compassionate, the communication should touch the heart. Compassionate communication can be understood through a breathing exercise. Put a hand on your heart; this is the center of compassionate communications. Notice your state of well-being. Imagine your whole being is entirely cared for. Take a breath in, and imagine this as a listening breath. Allow the breath to be touched by your heart, to be oxygenated and returned out. As you breathe out, imagine this as a speaking breath. And so is the cycle of breath and communication – incoming breath – touched by heart – and out going breath.

Compassionate communication includes:


2.Speaking with Clarity

3.Listening with Openness and Attention.

1. Awareness

Compassionate communication begins with an awareness of your own well being because when we focus on our well-being we create a space for the well-being of others around us. We create a space for authentic listening and speaking.

Identify Needs and Values. To create a dialogue of compassion, become familiar with your needs, values, expectations, and motivations. How did the role of caregiver come to you? Was it out of choice, obligation or circumstance? Does this role fulfill an underlying need or value to give or to feel appreciated? What other needs or values may be present for you? Perhaps there may be the need or value for connection, sense of purpose, or financial security. Marshall B. Rosenberg, Ph.D. describes a list of “universal needs and values” that all humans share. To become familiar with this list visit

Options for Meeting Needs and Values. Once you’ve identified some of your core needs and values, you can evaluate how you might have these needs met. It’s possible that your needs are met through care giving. It’s possible that you hope or expect these needs to be met through care giving, but they are not. Clarify for yourself what your expectations and motivations are and then determine what is realistic for this relationship. Use the “here and now” in your determination, rather than remembering how things were at one time or how you wish things to be. Consider all of the ways your needs and values can be met, including but not limited to this relationship.

 2. Speaking with Clarity

We all have many years of experience in speaking, but may not have skills in expressing ourselves with clarity. Here are some suggestions:

Use “I” statements. Probably the easiest tip for compassionate communications is to use “I” statements. These statements begin with the word “I” and they clearly express something about our own view, not something about the other person. For example “I am finding it hard to believe what you are saying” Notice the difference between the “I” statement and the following “You” statement. “You are lying!” When we start sentences with the word “You” we tend to put the other person on the defensive.

Use observations, not evaluations. An observation is a statement of fact, similar to what might be recorded on a video camera. For example, the statement “Aunt Ann has been talking on the phone for one hour”. An evaluation is a statement of fact with an added value (a judgment of good or bad). The statement “Aunt Ann talks too much on the phone” is an evaluation.

Speak Authentically. There are times when we choose to protect those we love from the truth about our feelings. We are the best judges of the impact of such non-disclosures. It’s possible that when we choose not to share our feelings, an opportunity for distance not closeness is created. Although it may feel very risky, the loving and heart-centered sharing of your feelings may be a beginning to more open communications. Sharing of feelings could begin with a sentence like “When you said [insert the Observation], I felt [insert the feeling].” See Marshall B. Rosenberg, Ph.D, ( for more tools for authentic speaking.

Know many realities exist. If a group of five people go to the same movie and each is asked the question “what happened in the movie”, we would get five each different stories. Each person’s story is based on the unique backdrop of each person’s perceptions. Many times our perceptions are based on our values or experiences. Remember, your reality belongs to you. Another person’s reality belongs to them. Neither reality is “right” or “wrong.” We simply perceive and interpret things based on our own values.

3. Listening with Openness and Attention

Many communication breakdowns occur because of difficulties in listening.

Waiting is not Listening. So often in our conversations we are “waiting to speak” while the other person is talking. We are formulating our ideas in response to what is being said. We become engaged in our own thoughts and their importance. Anxiously waiting for the other person to stop talking, we find that we are not listening.

Avoid Unspoken Stories. Another pitfall in listening is when we interpret rather than listen. While the other person is speaking, we create a story about what is being said. For example, a simple statement like “I think you look very nice today” can be incorrectly interpreted to mean, “Today, unlike any other day, you look very nice.” So, you can see how easy it is to create your own a story about someone’s communication.

Active Listening. Listening is truly an art. It is a skill that can be acquired. One way to practice this skill is through active listening. Active listening is a technique in which the person listening re-states his or her understanding of what the speaker has said, before introducing their response to what has been said. For example; “What I heard you say is …,” followed by “Does that sound about right?

Reframe Hostile or Difficult Communications. It’s possible that the person you are caring for may speak to you in anger. It may be helpful to consider that their anger may be due to their own frustrations, and not about you. For example, “You are no good! You never help me!” This statement might be reframed: “What I hear you saying is that you are wanting help and it feels like I am not helping now. Is that what you meant to say?” In hostile or difficult communications, it is sometimes helpful to involve a third neutral person to help with this type of communication.

At the very heart of compassionate communication is our desire to be collaborative in our communications – to hold a balance between our needs and the needs of the other. This is particularly important for caregivers who are so often looking after the needs of the other.

10/21 From a reader  Mr. Moody while I'm going to school to get my CFP, do you have any recommendations on how to gain experience in the field of finance?

I wish there was a magic bullet of some type but it still seems that either you become appointed with a large brokerage firm to learn some of the ropes (mainly selling products that few might comprehend to people who could use something else.)  In part that is cynical- mostly it is real life. Or you could latch on to a fee planner for a few years as perhaps another way to get started. You wouldn't get caught up in most of the sale hype, That said, it is still about how much Asset Under Management that will determine your supposed 'rung on the ladder''.
You didn't specifically ask about increasing knowledge while getting experience (though I assume it was part of your request) but I will tell you this. Financial planning, properly done, requires a HUGE commitment to reading and research- far more than the industry will ever let on since there is no way they can provide it. The CFP is good but far from good enough. I got mine 30 years ago and it was necessary but I still didn't know that much. Got the Masters 23 years ago. Much better of course but since 1995, the world economics and finance has changed dramatically. Many of the revered theories never were tested so you got to keep your eyes and ears open to the entities who are very very good. Read Peter Bernstein, Mandlebrot, some of Taleb's commentary; Mauldin and Ben Hunt for economics and more, I like Edesess  stuff etc. Keep an open mind to change- which means don't let your ego tell you what to do. I have to change my insight and orientation regularly as I read some  of those that have a lot more expertise in their respective areas.
In short (though I wasn';t) you are not going to get that good by just "working" because so many changes occur and you must try and keep up. Maybe there are some courses or institutions that are cutting edge though I am not aware of any.
The videos will give good real life (non marketing,. non brokerage) insight and a firm is requesting that I do some for continuing ed.
Good luck

10/21: The Entire US Economy Depicted In Emoji

Interesting visual  but a little tough to comprehend. Worth it though

10/21: Washington Posts commentary on the market and economy.. I tend to lean towards Larry Summers

The wave of panic that knocked down international stock markets on Wednesday subsided by the end of the week, with equities recovering most of their lost value. But is the tide coming in?

If selling continues, it may be that investors are starting to buy the gloomy thesis of secular stagnation, according to which the world will struggle to avoid a long period of disappointing growth -- decades, or more. On this view, an aging global society, the end of a certain kind of technological innovation, a glut of saved-up cash moldering in banks worldwide, or some other combination of factors will hobble the economy for the foreseeable future. First it was Japan, next it will be Europe, and then it will be all of us.

Academic economists don't all buy into this theory, with one extremely notable exception. Larry Summers has argued that secular stagnation is on the way, and that there will be little central bankers can do to stop it. They'll do they most they can -- keeping interest rates at zero indefinitely, as they have been since the financial crisis, with the goal of discouraging people from saving money and encouraging them to borrow and spend.

If the global economy really is headed toward stagnation, then Janet Yellen and the Federal Reserve might have no choice but to keep interest rates there for a while longer, and maybe a little longer after that, and maybe even...

In a wry column on Saturday, Robert Shiller basically accuses Summers of giving investors Ebola (in a metaphorical sense, of course):

Fundamentally, stock markets are driven by popular narratives, which don’t need basis in solid fact. True or not, such stories may be described as “thought viruses.” When they are pernicious, they are analogous to the Ebola virus: They spread by contagion.

In other words, Summers hasn't convinced the academy, but he just might have won over the market. Shiller warns that Summers's pessimism about the economy could become a kind of self-fulfilling curse as squeamish investors pull back from the market, and less money trickles into the real economy.

If the stock market continues to wobble this week, that doesn't necessarily mean that Summers is right. It could just be that he's very persuasive. We won't know for years. In the meantime, the central bankers of the world, especially in Europe, must do everything in their power to prove him wrong.


What is global market turbulence telling us?


The extraordinary volatility in all financial asset classes in the past week can only be described as ominous. On Wednesday, the US ten year treasury, perhaps the most liquid financial instrument in the world, traded at yields of 2.21 per cent and 1.86 per cent within a matter of hours. This type of volatility in the ultimate “risk free” asset has previously been seen only in 2008 and other extreme meltdowns, so it clearly cannot be swept under the carpet.

EFM the statistical odds of that much movement is far beyond the fluid  standard deviation curve.

10/19:   The FED may delay because of the fragile economy

The US Federal Reserve should carry on with its asset purchases in October, said James Bullard of the St Louis Fed on Thursday, as he became the first policy maker to call for a central bank response to recent market turmoil.

“Declining inflation expectations are a serious matter for a central bank,” . He said the Fed could “pause at the October meeting”, wait for more data, and then cease purchases in December if the economy looks strong.


10/19: For the first time

For the first time ever, mutual funds have surpassed banks as the largest holders of corporate and foreign bonds, holding 13 percent of these securities.


A group of market watchers, led by the IMF, has signaled the alarm over high yield bonds. A handful of large asset managers, including Pimco, Fidelity, BlackRock, and Dodge & Cox, hold an eye-popping proportion of high yield bonds, and that poses an unequivocal threat to credit markets. In many bonds, such as auto financier Ally Financial, or student loan company SLM, managers like Pimco control as much as 30-50% market share. This commanding position creates severe issues for both the managers and the markets, as most of their holdings are highly illiquid and only held by one another, meaning in a period of stress, perhaps similar to the one we have just seen, the managers would very likely be unable to offload the bonds without extraordinary losses. This is a major concern because it would incite panic across credit markets, but further, because individual managers would therefore be very unlikely be able to meet redemption demands from their own fund investors. If they cannot liquidate the bonds quickly enough, or at prices high enough, there is no way they could meet immediate withdrawal demands. The same bond investors hold even higher shares of bonds in European markets, including heavily indebted sovereigns like Italy and Spain. Because of regulatory constraints, banks are no longer major market-makers in illiquid credits.

10/19: Signs of the Next Industrial Revolution and Its Impact on Investing

Very concise and interesting

10/19: We are sooooooooooo stupid

EVEN if we grade on a very generous curve, many Americans flunk when it comes to financial literacy. Consider this three-item quiz:


• Suppose you had $100 in a savings account and the interest rate was 2 percent a year. After five years, how much do you think you would have if you left the money to grow? More than $102, exactly $102 or less than $102?

• Imagine that the interest rate on your savings account was 1 percent a year and that inflation was 2 percent. After one year, would you be able to buy more than, the same as or less than you could today with the money?

• Do you think this statement is true or false: “Buying a single company stock usually provides a safer return than a stock mutual fund”?

Anyone with even a basic understanding of compound interest, inflation and diversification should know that the answers to these questions are “more than,” “less than” and “false.” Yet in a survey of Americans over age 50 conducted by the economists Annamaria Lusardi of George Washington University and Olivia S. Mitchell of the Wharton School of the University of Pennsylvania, only a third could answer all three questions correctly.

This is particularly troubling given the inherent complexity of our modern economy. Whether in taking out a student loan, buying a house or saving for retirement, people are being asked to make decisions that are difficult even if they have graduate training in finance and economics. Throwing the financially illiterate into that maelstrom is like taking students currently enrolled in driver’s education and asking them to compete in the Indianapolis 500.

A new paper by three business school professors — Daniel Fernandes of Erasmus University in the Netherlands and the Catholic University of Portugal, John G. Lynch Jr. of the University of Colorado and Richard Netemeyer of the University of Virginia — presents a discouraging assessment of attempts to teach people how to deal with money. Their article uses a technique called meta-analysis, looking at results from 168 scientific studies of efforts to teach people to be financially astute, or at least less clueless.

The authors’ conclusions are clear: over all, financial education is laudable, but not particularly helpful. Those who receive it do not perform noticeably better when it comes to saving more, for example, or avoiding ruinous debt. Even more depressing, the results of efforts aimed at low-income people are particularly weak. Those who need the help most seem to benefit the least.

we shouldn’t fool ourselves into thinking that adding a household finance class to a high school curriculum will in itself create knowledgeable consumers who can understand today’s wide array of financial products.

It would be premature to conclude that all efforts at improving financial literacy are futile. But it is a fair conclusion that simply doing more of the training commonly used now will not produce significant results.

10/19: just-in-time education. Because learning decays quickly, it’s best to provide assistance just before a decision is made.

education decays over time; even large interventions with many hours of instruction have negligible
effects on behavior 20 months or more from the time of intervention. Correlational studies that measure
financial literacy find stronger associations with financial behaviors. We conduct three empirical studies,
and we find that the partial effects of financial literacy diminish dramatically when one controls for
psychological traits that have been omitted in prior research or when one uses an instrument for financial
literacy to control for omitted variables. Financial education as studied to date has serious limitations that
have been masked by the apparently larger effects in correlational studies. We envisage a reduced role
for financial education that is not elaborated or acted upon soon afterward. We suggest a real but
narrower role for “just in time” financial education tied to specific behaviors it intends to help. We
conclude with a discussion of the characteristics of behaviors that might affect the policy maker’s mix of
financial education, choice architecture, and regulation as tools to help consumer financial behavior.

The financial services industry — either on its own or as required by government regulators — needs to find ways to make it easier for people to make sound decisions

10/19: Lower net worth


10/19 Everbody felt that oil prices would rise with all the worldwide problems


10/19: Very bad Greece and possible contagion

Amid the wider market selloff, Greece has suffered a particularly volatile period. Interest rates on the country’s ten-year bonds have spiked in the last week, soaring from around 6.5% to near 9% now, a level many believe represents an unsustainable borrowing cost. Equity markets in the country dropped 8% in just two days. Meanwhile, German bonds touched new lows, hitting near 0.7% on ten-year bunds. Investors are increasingly worried about Greece, because the party leading in the polls is in favour of enforcing at least 50% haircuts to the country’s bonds holders in an effort to cut the country’s debt, which is currently 174% of GDP. Fears over Greece have also reignited worries over other Eurozone periphery countries and Italy saw its borrowing rates rise 40 bp on Thursday morning alone. The Eurozone is in the midst of a recession, with near deflation, and little prospect of breaking out of the malaise because of serious political disagreements over the proper course of action. 

10/19: And more of the mess  Senior Financial Times Columnist Gillian Tett has written an insightful article on the links between the recent market selloff and the important reality of liquidity. Tett explains that liquidity has been hurt by four factors, and all of them helped exacerbate market volatility over the last few weeks. Firstly, most market investors are holding the exact same views, which has left everyone caught by surprise. Last week, 100% (truly) of surveyed economists said they believed interest rates would rise soon—this helps explain the like-mindedness of investors. Secondly, and leading on from the first point, asset managers have adopted a severe herd mentality, and are all buying and selling the same assets at the same time, which makes rises and falls much steeper. Thirdly, computer programs and algorithms, despite purporting to boost market liquidity, have actually made things worse. Most of them operate in a similar fashion to one another, and because they can function at lightning speed, move markets even faster downward than in the phone-based days. Finally, and perhaps most critically, regulations have forced large banks out of the market-making space in many products. This means that there is simply not enough liquidity in trading to handle the volume of bonds in the market at an adequate level, leading to heavy losses.
The chief risk officer of Goldman Sachs, Craig W. Broderick, warned at the I.M.F. meetings last week that the asset management firms that now hold the bulk of these bonds had not yet been tested in terms of how they would react to a market shock.The chief risk officer of Goldman Sachs, Craig W. Broderick, warned at the I.M.F. meetings last week that the asset management firms that now hold the bulk of these bonds had not yet been tested in terms of how they would react to a market shock.
Especially vulnerable, I.M.F. economists say, are companies in which one manager and one investment view hold sway over a wide family of funds. That can lead to a situation in which numerous funds companywide accumulate concentrations in the debt of a certain company, sector or country. When retail investors are driving the investment money coming in and flowing out, the dangers are compounded.


10/19: Types of Cash Flow and Cash Flow Calculations Guide


10/16: Ruble Rubble

The Russian ruble has collapsed to a record low against a basket of dollars and euros despite intervention by the central bank to prop it up. The Russian central bank has spent as much as $1.75 billion from the country's foreign currency reserves to support the ruble, buying it on currency markets in an attempt to prop up its price,

10/15: Big data explained

Over the last few years, the world has been flooded by so-called big data, or large data sets culled from a wide variety of sources. The idea of using massive amounts of data to solve issues has been highly touted, promising to cure all evils from healthcare to financial markets. However, despite a decent amount of interest and promises made, fund managers, from private equity to hedge funds to mutual funds, have been scratching their heads with what to do on the topic. Fund managers have reportedly been amazed with the data they can obtain, from corporate sales, to Twitter data, to search term analysis, but many simply do not know how to put them altogether into a usable investment strategy. Many funds, such as Schroders, say they are “fascinated” by the possibilities, but have “nothing set in stone” as to how to use the technology. This lack of uptake is worrying the same managers, as they fear that asset management could quickly come to be dominated by tech giants like Google, Facebook, and Amazon, who have a great degree of expertise in using big data to make decisions. “I suspect that [Google’s artificial intelligence] people could clone an asset management stalwart before breakfast”, says an FT commenter.

10:15:  China's problem (oxfwd_

For the fourth year in a row, US investors in Chinese-focused equity funds have withdrawn money from the space. This year, over $1.1bn was withdrawn from funds focusing on China, meaning the space lost 20% of its capital. European investors have withdrawn money as well, but not to such an extent. Investors have become disgruntled with China’s corruption, ailing real estate market, high indebtedness, and its weakening economic outlook. Investors have also been unhappy with the Chinese equity market’s volatility, down 6.8% last year, but up 16% this year. Because of a lack of institutional investment in the country, the market is still driven by retail trades, making it much more volatile. The development will hurt large Chinese fund houses’ efforts to penetrate western markets. Such businesses, which are dominant in China, have been trying to attract AUM from western sources, but have been unable to do so because of the negative outlook for the Chinese economy, and a generally distrusting view of the fund businesses themselves.

10/15:  We will not see 3% however in 2015 or 2016


10/15: US oil exports

For forty years the US has adamantly stuck to its policy of a crude oil export ban. However, as the country has once again become awash in black gold, companies are having more and more success chipping away at the blockade. Several weeks ago, a shipment of American crude oil left harbour in Texas, destined for South Korea. The shipment represents a major step towards exporting, as it was the first ship to leave port with light liquid hydrocarbons, a category of oil which has historically been referred to as “crude” because of its only minute differences to the benchmark resource. Such a substance, like many others that the US Commerce departments’ new policy allows, is only very lightly refined, and the process of doing so can be done right at the wellhead in little time with low costs. This means that much of Texas’ new oil is now exportable. Since refined petroleum products, like gasoline, are already allowed to be exported, the government says this is not a change of policy. However, in reality, it represents a fundamental shift, as an estimated 300,000 barrels a day are now eligible to be exported.

EFM- I wonder if fracking will not cause significant problems. there have been lots of earthquakes and ground water pollution. Mother Earth may really get pissed and force a shutdown.
10/15: Where Not To Die In 2015  (estate tax)

10/15: Key Person Disability Insurance

10/15: Business Overhead Insurance

10/15: Buy-Sell Disability Insurance

10:15 Active versus passive

Active portfolio management involves the selection of securities and market timing in an attempt
to provide value to fund investors. It has been suggested that periods of falling securities prices provide
opportunities for expert managers to locate underpriced investments. The notion that active managers are
better able to earn their management fees during recessions is cited in the literature (Moskowitz [2000],
Kosowski [2006], Glode [2011]) as a justification for holding actively managed funds within a portfolio.
This assertion has been subject to little scrutiny. In this article, we estimate the performance of active
equity portfolio management across business cycles.

Our study attempts to answer two simple questions. Is active portfolio management performance
superior in recessions relative to passive investing, and to what extent is performance persistent across
business cycles? Our findings suggest that active portfolio management is not superior to a passive
investment strategy in either expansions or recessions. We also find that persistence is weak across
business cycles. Collectively, the findings support a low cost passive investment strategy for retail
investors across all business cycles.

EFM- all critiques of active management tend to reflect the first sentence. And that is fine for most purposes IF the consumer can handle major losses without difficulty AND that the market will always some back- or at least in enough time to make the consumer whole once again. But middle class cannot accept huge losses under a buy and hold nor accept the fact that the market will gain enough in a relatively short period of time to make up such losses. With the latter, the retiree is spending money for retirement and waiting for the eventual gain. Probably will simply lose out. Period
What to do? View DCAD above. Simple no brainer. . 

10/15: But.......

the U.N. said that an estimated 180,000 Iraqis have fled Heet since it fell earlier this month to the radical Islamist group
Kim Jong Un has bad feet
Ebola is scaring America
The Pope has softened views on homosexuality
And so on
But Putin and the Ukraine  don't really get mentioned now,

Special Needs Children Turning 18 Years Old

By Lori K. Murphy, Esq., Bean, Kinney & Korman, P.C.


A single mother of an adult child visited me to prepare her estate plan.  During our first meeting, she shared that her 24-year-old adult son lives at home and has a mental impairment.  He recently needed a new physician and my client requested to direct his medical care. In response, the new physician asked for her son’s medical power of attorney.  My client was thrown for a loop–she had always directed his medical care and no one before had asked for a power of attorney.  Later, she determined this was because her son had the same medical treatment team since he was a young boy and the team knew her son’s medical condition and that his mother directed his care.  Now that new care was needed, the physician’s office properly sought the mother’s authority to direct care and she needed to determine how to continue to help him.  Our discussion turned from her own estate planning to one about guardianship, conservatorship and powers of attorney. 
In no legal field have I been challenged more than in representing families with special needs children.  Over the past 14 years, I have had the pleasure of working with families with estate planning efforts, including those who have children with Down syndrome, autism spectrum disorder, spina bifida, birth injuries and other conditions impacting a person’s mental capacity.  A topic many families are passionate about is determining how to attend to the less-abled child after he or she attains the age of 18 (the age of legal majority) and whether a guardianship and conservatorship is appropriate. 
When discussing this topic with clients, it is crucial to consider both the cognitive capability of the child and the parent’s perceived need to continue involvement in the child’s financial life and medical affairs.  Other relevant factors include an analysis of the pros and cons of guardianship, conservatorship, agency under a financial power of attorney, and agency under an advance directive/health care power of attorney.  Additional factors that impact the analysis include whether the child needs outside care, such as an assisted-living facility or companion-care home, and the parent’s financial resources.
Important Factors
In determining how to best help parents provide for their adult child with special needs, it is important to take into account the self-sufficiency of the adult child.  Here are factors to discuss when tailoring a course of action:

  • Whether the child is capable of communicating his or her needs and wants regarding his or her care;
  • Degree to which the child can adequately feed, clothe and otherwise take care of his or her basic needs;
  • Whether the child is employed outside of the home;
  • Whether the child will require outside care (i.e., an assisted-living facility);
  • Degree to which the child can understand the effects and consequences of his or her actions; and
  • Income and finances of the child and the child’s family.

It is crucial to take the adult child’s needs and wants, if capable of expressing them, into account when determining how to best provide for him or her.  Apart from moral sensitivities, Virginia law provides that fiduciaries in charge of the child’s care allow the child to participate in the process as much as he or she is able.  Further, if the child has no input in the process, it could disrupt his or her relationship with the parents, making the process emotionally taxing on everyone involved.
Guardianships & Conservatorships
Run to the Courthouse
One way to provide continued care for special needs children over the age of 18 is by securing a guardianship and conservatorship.  Adult guardianship is the legal process in which a guardian is appointed by a court to make personal decisions on behalf of the adult child, including decisions about where he or she lives and what medical treatment he or she receives.  In contrast, adult conservatorship is a legal process in which a conservator is appointed to make decisions about an adult’s financial world, including property and estate.  An adult’s guardian and conservator are often the same person, but need not be, and one does not have to seek the appointment of both.  If a guardianship and conservatorship is sought by the parents, an official opinion from a physician must be presented to a court stating the reasons these are necessary. 
Virginia law provides that a court order granting guardianship be tailored to rectify the incapacity of the individual.  As a result, guardianship is a particularly flexible system in Virginia: the court order appointing a guardian can be as broad as covering all decision-making or limited to specific decision-making spheres, such as medical care.  Some parents welcome the child’s right to vote, for example, and are pleased to learn that a court order can provide that the adult child retains that right.

When a child does not have the cognitive ability to direct his or her own financial or medical affairs, a guardianship and conservatorship is appropriate.  The parents are relieved to know they can continue to direct the child’s affairs after the age of 18 and welcome the daily involvement.   Most parents of children with mental incapacity determine that a guardianship and conservatorship is the right thing to do for a child who cannot live independently.
Slow down
However, guardianship and conservatorship are not always the appropriate tools to protect individuals with mental impairments.  First, the cost to be designated by a court as a guardian and conservator can easily exceed several thousand dollars in legal fees.  Second, a guardian is required to provide significant attention to the incapacitated adult.  Third, the guardian has to report at least annually to the state as to, in part, the living arrangements, mental, physical and social condition, and the scope of services provided and whether those services provide adequate care to the individual.   Furthermore, the guardian directs the living arrangements and health care of the incapacitated individual and often those decisions are challenging. 
Conservatorships, in particular, require significant maintenance.  A full conservator is required to post surety on a bond with the court, annually report on all income received on behalf of the adult child, and annually report on all funds expended on behalf of the adult child to the local Commissioner of Accounts.  This means a conservator must collect and keep records of all receipts, checks and bills so he or she can account for all the child’s funds “to the penny.”  Without help from an accountant or financial planner (which can be costly), this can be time consuming.  Many of my clients are working parents, juggling the responsibility of raising multiple children, including the special needs child, so this additional work is burdensome.
Further, a guardianship and conservatorship can infringe upon the child’s independence if it is not tailored toward that child’s needs and level of functioning.  A child who is autistic, for example, may be able to work, earn an income, ride public transportation, and pay rent, and may not need such parental control after the age of 18.  Also, the legal process of obtaining a guardianship and conservatorship over an adult child may be a stressful experience for such a child. 
If a guardianship and conservatorship is the right decision for a parent and child, the process is typically instigated about six months before the child turns 18.  This provides sufficient time to obtain the necessary medical, psychological, or psychiatric opinions required, to seek the input of a guardian ad litem (a person appointed to protect the rights of the adult child), and to prepare the court petition for appointment of guardian and conservator.
Powers of Attorney
Let’s get powers of attorney
An alternative to guardianship and conservatorship are the powers of attorney.  A power of attorney is a legal document in which a person (the “principal”) appoints an individual (the “agent”) to make decisions and take action on behalf of the principal.   For our discussion purposes, an adult child who has already attained the age of 18 would execute powers of attorney as the principal and would delegate authority to one or both parents as the agent(s).  The adult child would also name successor agents if the parent was unable to attend to the adult child’s affairs.
There are two types of powers of attorney used in lieu of a guardianship and conservatorship: (1) Advance Directive/Health Care Power of Attorney and (2) Durable General Power of Attorney.  The former document allows an agent to make decisions about medical affairs to include typical, daily health care decisions as well as the serious end-of-life decisions, and the latter document allows an agent to make decisions about financial and administrative affairs.  Generally, if powers of attorney are properly executed, a guardianship and conservatorship is not necessary.  Additionally, the cost to secure powers of attorney is low in comparison to the court-administered process of guardianship and conservatorship and the ongoing cost is nil – there is no annual reporting to a third party associated with the powers of attorney (unless the adult child makes that specific request). 
The appointment of a power of attorney can be a wholly private affair.  So long as the adult child demonstrates sufficient capacity, he or she can execute the two powers of attorney and the relationship between parent as caregiver and overseer will be continued with little interruption after the eighteenth birthday. 
But only if there is capacity
However, powers of attorney can be executed by the adult child only if he or she has sufficient mental capacity.  (For powers of attorney, “capacity” is the term used rather than ability or disability).  In fact, determining capacity is often the crux of the decision-making process of whether to obtain a guardianship and conservatorship or to request the child to execute powers of attorney.  No legal checklist exists that can be used to determine whether a child meets the capacity level required to execute a power of attorney.  Thus, it is often the most important thing an attorney can do.  Yet, many attorneys are uncomfortable with making the assessment as it can be perceived to cross into the medical arena of determining cognitive ability.
Thus, if the adult child has a diagnosed condition affecting decision-making capacity, it is important to secure a medical opinion as to the adult child’s mental capacity.  If decision-making capability is not a factor, then it is general practice that an adult child with sufficient capacity must be able to consciously understand (1) the nature of a power of attorney; (2) the effect of signing a power of attorney such as when the power begins and the subject matter over which the agent can exercise control; (3) the power of attorney can be limited or broad; (4) the power of attorney can be revoked so long as the adult child has capacity to do so; and (5) the power of attorney continues even if the adult child becomes incapacitated.   However, in any case, the attorney will want to meet with the adult child alone, without the influence of his or her parents.  This allows the attorney to make the difficult decision of whether the adult child has sufficient capacity to execute the powers of attorney and that the terms in the powers of attorney are directed by the adult child. 
An issue that needs to be acknowledged by the parents is that if the adult child has sufficient capacity to execute the powers of attorney in favor of his or her parent, he or she can also execute powers of attorney in favor of another person.  An elderly woman called me to express concern that her middle-aged adult child with some mental impairment had recently executed powers of attorney in favor of his girlfriend.  It was difficult to hear the elderly woman express her concern that the girlfriend may take advantage of her son.  This is a real issue that needs to be considered if powers of attorneys sound like an easy, cost-effective solution to managing an adult child’s care.
Even though executing a power of attorney comes with its own complex issues, especially when adult special needs children are slightly mentally impaired and the determination of capacity is a close call, a power of attorney is a far less invasive means of providing for the care of a special needs adult child. It requires almost no maintenance, unlike a guardianship and conservatorship, and is a low-cost method to ensure the continued care of the child by the parents.   
Other Considerations
When deciding whether to pursue a guardianship and conservatorship of an adult child with special needs or have the adult child execute powers of attorney, it is imperative that the discussion includes consideration of whether the child is receiving or will receive public benefits (both Federal and local) and whether the parent has completed his or her own estate planning.  Public benefits and the special needs child go hand in hand with topics like appointing Representative Payee for Social Security payments, preparing special needs trusts, and the relationship of the child to the parent’s own financial estate. 
In evaluating whether a guardianship and conservatorship or powers of attorney are appropriate, a parent should consider the adult child’s mental capacity, the ability of the child to manage his or her own affairs, and the deprivation of rights imposed by a guardianship and conservatorship.  If the adult child has the capacity to execute powers of attorney, then that is a good first step.  A formal guardianship and conservatorship may then be sought later, but only if needed.


10/14: Global Economy DOWN

The IMF is expected to cut its estimate of global growth in 2014 from 3.4 per cent to a little over 3 per cent this week as poor second quarter figures from Germany, Japan and other countries weigh on the outlook. As recently as April, the IMF was expecting 3.6 per cent growth this year, faster than the long-term average.

FT Interactive – Tiger Index

Explore the index, which delivers a snapshot of the state of the global economy, with an interactive graphic

Eswar Prasad, an economist and senior fellow at Brookings, said: “The world economy is now being powered mostly by the US growth engine, a situation that is untenable for a sustained and durable global economic recovery”.

10/14: Probabilities (Kahneman)

“to compute probabilities you need to keep several possibilities in your mind at once. It’s difficult for most people. Typically, we have a single story with a theme. People have a sense of propensity, that the system is more likely to do one thing than the other, but it’s quite different from the probabilities where you have to think of two possibilities and weigh their relative chances of happening.”

10/14: Active Management

Dougal Williams, CFA11 Oct 2014 21:23

Prof Ken French often reminds folks that identifying skill is incredibly hard, indeed.  For example, if you take a manager who has outperformed by about 5% per year, but experienced a similar level of volatility as the US stock market, it would take roughly 64 years to say with statistical significance that manager wasn't lucky.  60+ years to say with confidence it's skill, not luck.

Forget 64 years.  Think about what our industry does to managers who "ouperform" for 3 years, 5 years even 10 years--those "winners" are featured on the front page of newspapers, grace magazine covers, and become the keynote speakers at industry conferences.  Money flows into those mutual funds, advisors allocate to their funds / separate accounts, and those same advisors tout their own ability to pick-stock-pickers skill.

Just for a moment, check your ego, suppress your emotions, detach your mind from your source of income and think agnostically:  SIXTY FOUR YEARS to say with confidence that manager was indeed skillful, not just lucky.

Now tell me how good you are at picking winning managers in advance.

Lastly, studies comparing index vs. active performance don't compare index performance the "average" manager.  They compare them to all managers.  Every credible study concludes the same:  over short periods, the relevant benchmark outperforms about 60% of active managers; over 10 years about 70%; and over 20 years about 80%.  

Interestly, the same long odds face those previous periods' winners in the subsequent period.  Past winners are HIGHLY UNLIKELY to win again.

Yes, outperforming due to picking stocks / funds / managers or through market timing is POSSIBLE but not PROBABLE.  Highly improbable, in fact.

10/14: Planners suck

How Long will I Live

Simple 8 question form.

Married men live longer than single men

But married men are more willing to die