Quote of the Week

“The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will.”  – Vince Lombardi

Technical Corner

Last week saw a big drop in the markets on Thursday over the comments by our president concerning North Korea. The markets rallied slightly on Friday. Without any North Korea tweets over the weekend, the markets were up 1% on Monday. I think the economy is a Plow Horse as far as economic growth is concerned and is pretty much ignoring politics in Washington unless something outrageous is said or happens. This is a good thing. We are not going to get rapid growth in GDP, just slow but steady growth which is also a good thing.

The Congress has put the end of Obamacare repeal behind and now wants to pass a tax reform bill. The problem is that they have to deal with the upcoming debt ceiling debate and the funding of the government by the end of September. These two issues are always contentious and usually not solved until the last possible minute. That takes us into October and all of a sudden it is time for Congress to recess.

What most people do not seem to remember is that it took Ronald Reagan and the Congress two years to complete the last tax reform legislation in 1986. Then the situation in Washington was not nearly as polarized as it is now. Odds are we will not get tax reform this year and we certainly will not get an Infrastructure Bill. I do not see anything completed before the midterm elections in 2018. Remember, all the House seats and 1/3 of the Senate seats are up for re-election next year. A lot of political posturing for re-election will be the agenda in 2018.

We currently like the prospects of a continued, but slow rise in the markets. There is no sign of a coming recession at this point.

The UPI of the S&P 500 is still at 38 and holding. Our allocation for most clients remains the same: 65% equities, 0% bonds, 30% alternatives, and 5% cash.

Sue’s Thoughts

About a month ago I bought a smartwatch. I have yet to read all 500 pages in the user guide, but I like using the features that I have figured out and plan to learn more eventually. However, the feature I like best is using my watch to pay for store purchases.

No longer do I fumble in my wallet to search for the cash I never carry, or to remove a credit card. In addition, I do not have to worry about putting the credit card back. I used to use my phone to pay, but now that stays safely tucked in a pocket, too. Just by holding my wrist near the card reader and a simple push of the button, my purchase is complete, and I am out of the store just a little quicker. Now I wish the gas stations would catch up and use this technology. At the pumps, using a smart device is a lot safer than using a credit card. Read the following article to see why.

Preventing a Debit Card Hack – How can you plan to protect yourself against this increasingly common crime?

Debit card data theft has surged lately. According to FICO’s Card Alert Service, the number of businesses or ATM locations where debit cards were hacked rose 26% from 2015 to 2016. Additionally, the number of compromised cards has steadily risen during this decade.1

Crooks can attach skimmers to ATMs or point-of-purchase devices in seconds. These counterfeit card readers instantly record banking data ingrained on a debit card’s magnetic stripe. You probably have one of the new EVM chip cards, but if you happen to insert or slide your card through an older ATM that cannot accept the newer cards, your data could still be at risk.2

Bankrate reports that chip skimmers are now surfacing, capable of hacking first-generation EVM chip cards relying on static data authentication. Second-generation EVM chip cards use dynamic data authentication, which makes data theft more difficult – but not impossible.2

What can you do to protect yourself against debit card data theft? First, keep in mind that most skimmers are affixed to non-bank ATMs. ATMs at gas station islands and convenience stores are favorites for crooks, as they may be located out of sight of clerks and security cameras. Avoid using your debit card at such places. ATMs inside a bank or a business with plenty of foot traffic (like a mall or a grocery store) are less likely to be hacked.1,2

Check the ATM itself for irregularities. If there are multiple ATMs in front of you, be careful if one card slot flashes its acceptance light and an adjacent one does not (notify the bank or the business hosting the ATMs). Look for misaligned graphics or colors or evidence of prying or looseness. Cover the keypad as you enter your PIN, and beware of people trying to glean your PIN in the old-school way, simply by looking over your shoulder.

Try an NFC payment if the merchant allows it. NFC stands for near-field communications. Apple Pay, Android Pay, and Samsung Pay all use NFC services, which encrypt the confidential financial data stored on credit and debit cards into symbols. This gives you another layer of protection. Savvy consumers are increasingly using Apple Pay, Android Pay, and Samsung Pay to buy things. PayPal’s Android app can also make NFC transactions.2,3

If you sense your debit card has been breached, report it quickly. If you can tell the card issuer that your card is missing or stolen before any unauthorized transactions occur, you will not be held financially responsible for such transactions – that is federal law.1

If you notice criminal activity has taken place, the longer you wait to let the card issuer know about it, the less money you may end up recovering. Report the crime within two business days, and your maximum liability is $50 under the federal Electronic Fund Transfer Act. Past that deadline, your maximum liability could be as much as $500. Wait 60 days or longer to report debit card theft, and the missing funds may not be restored to your account at all.1

Besides notifying the card issuer, you should also tell the three leading U.S. credit bureaus – TransUnion, Equifax, and Experian – about any debit card data theft and unauthorized transactions. You can file a police report, and you can also file for an identity theft affidavit with the Federal Trade Commission. Both documents may be useful to the major credit-reporting agencies.2

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations  1 – tinyurl.com/y8re2ake [7/21/17]

2 – bankrate.com/credit-cards/what-is-a-skimmer/ [7/25/17]

3 – theverge.com/2017/4/18/15333108/paypal-android-pay-nfc-payments [4/18/17]

By the Numbers

NOT THE LONGEST . . . YET – The longest bull market for the S&P 500 since 1950 lasted 3,452 calendar days, i.e., the 9 ½ years from 10/11/90 to 3/24/00. The current bull market for the S&P 500 is 3,077 calendar days long as of Friday 8/11/17, i.e., the approximate 8 ½ years from 3/09/09 to last Friday 8/11/17. The current bull would have to last until 8/22/18 (i.e., 1 year from now) to reach 3,453 calendar days. The S&P 500 consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).” Michael A. Higley, BTN 08-14-2017 #1

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These are the opinions of Larry Lof and Stephanie Mayoral and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs. The S&P 500 is an index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Indices mentioned are unmanaged and cannot be invested into directly. Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.

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