Monthly Archives: November 2017

5 Tips to Protect Yourself from Identity Theft

FRI, NOV 10th, 2017

With the recent Equifax security breach which affected approximately 145.5 million consumers, here are 5 things you can do to help protect yourself from identity theft:

1. Get a free credit report every year from each of the 3 major reporting agencies (Equifax, Experian, and Transunion). You can stagger them to get one report every 4 months. Review the reports for accuracy to make sure there are no mistakes or fraudulent lines of credit.

2. Setup a fraud alert. A fraud alert on your credit report will notify lenders and creditors to take an extra step of identity verification before opening a credit line in your name. Fraud alerts are free. Once you contact one of the 3 major agencies, they are required to contact the other two. Fraud alerts last for 90 days (1 year if you are in the military on active duty), but can be extended up to 7 years if you are a victim of identity theft.

3. Consider freezing your credit. If you freeze your credit no one, including you, can access your credit report to open new lines. You will get a PIN that you have to use each time you want to unfreeze and freeze your credit. In Utah there is a $10 fee for each credit reporting agency to add a freeze and an additional $10 fee each time you want an agency to “thaw” a freeze. There are no fees for victims of identity theft.

4. Sign up for credit monitoring services which notify you if a new account or credit inquiry show up on your report. Some credit monitoring services are free and others can cost up to $50 per month depending on the services offered. Equifax is offering 1 year of free credit monitoring to all Americans.

5. General good practices are to shred documents that contain personal information, make sure your devices are password protected, use strong passwords and PINs, and don’t be an open book online. Set your social media preferences appropriately and avoid volunteering information about yourself to people you don’t personally know.

The Equifax hack is not just a near-term issue; it will likely have repercussions for years to come. While we fully expect credit bureaus and other entities with sensitive information to aggressively pursue improvements in data security, we also recognize that hackers never sleep and will continue to create new tools and techniques to breach security systems. Unfortunately this means we will all need to be more vigilant in monitoring how our personal information is being used and disseminated.

Liz Bernhard, CFP®, MBA / Senior Wealth Advisor
Albion Financial Group
(801) 487-3700

We Now Return You to Your Regularly Scheduled Update on the Economy and Markets …

THURS, NOV 2nd, 2017

The U.S. economy continues down its years-long path of expansion. Despite the endless cacophony of hoopla and noise from the new regime in Washington D.C. the track of growth has neither picked up nor dissipated. Our broad assessment infers that the bedrock of the economy – e.g., jobs, sentiment, private sector balance sheets, and aggregate demand – is healthy. Meanwhile lawmakers have been in a state of gridlock for the majority of the year. Taken together, a measured and stable economy with little in the way of dramatic new policies from the Beltway is a celebrated backdrop for equities. As a result the bull market in stocks pushed on in the third quarter.

Further down the economic stream corporate profits grew once again in the most recent quarter. It’s looking as though 2017 will record the best annual earnings pace since 2011. We believe that it’s this fundamental factor that’s driving stock returns this year. However, we would be remiss to not reiterate that combined earnings growth at this pace is unlikely to continue. Rather we trust that while the upward trajectory should stay intact it’s likely to ultimately settle at a more normalized mid-single digit speed, perhaps as early as in the third quarter.

As equity markets continue their ascent so too have calls from the pundits and permabears saying that stocks are wildly overpriced. Be it nominal price-to-earnings, the CAPE ratio, or market cap to GDP we remain deeply familiar with these oft cited metrics that propose a frothy market. Some have merit, while others are clear distortions of logical measures of valuation. We are not fans of cherry-picked data. Instead, we prefer to evaluate a broad collection of evidence for analysis of both financial markets and individual investments. As such we continue to declare that current valuations are levelheaded, particularly considering low interest rates, lukewarm inflation, and record corporate earnings. Low interest rates are perhaps most critical in examining present valuations. As Warren Buffett likes to say, “interest rates are to asset prices sort of like gravity is to the apple. When rates are low there is little gravitational pull on stock prices.” We agree.

In past musings – both in our quarterly letters and in the financial press (here, here, and here) – we’ve been ardent promoters of the notion that the global economy was finally experiencing a synchronized bounce. Indeed, Europe, for the first time in this recovery, may see faster growth than the U.S.; Japan is perking up to the point where their Prime Minister (Abe) is capitalizing on better times by having a snap election to validate and consolidate his power; and China appears steady and eager to march into the next five years with Xi Jinping, recently renewed as the country’s leader, as their modern version of Chairman Mao (Zedong). Short of a surprising shock to the system, the world economy is looking quite good.

Fed policy has been benign over the summer months. As we anticipated their target interest rate has been unchanged since June. Our expectation for the next rate hike, at their December confab, continues to sit at better than 50% odds. In September the Fed formally announced its balance sheet reduction plan, to commence this autumn. On net this is a good move. Financial markets yawned in response – a testament to Yellen & Co.’s deft management at the central bank. Supposing that the general economy continues its expansion we think that the Fed further normalizes monetary policy. The effect of (possibly) gradually rising interest rates is something we will be closely monitoring. Nevertheless we still think that both the economy and stock market are in a state of relative well-being at the moment.

Jason L. Ware, MBA / Chief Investment Officer
Albion Financial Group
(801) 487-3700