Avoid These 3 Cybersecurity Mistakes

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CISA warns of risky behaviours that leave networks exposed to cyberattacks

The U.S. Cybersecurity and Infrastructure Security Agency (CISA), which leads the national effort to protect and enhance the resilience of the nation’s physical and cyber infrastructure, warns that “”exceptionally risky” [cyber] behaviors that can put critical infrastructure at extra risk of falling victim to cyberattacks”.

The three cyber security mistakes and behaviors to avoid are:

  1. Using unsupported software,
  2. Allowing the use of default usernames and passwords, and
  3. Using single-factor authentication for remote or administrative access to systems

According to CISA, these are all dangerous behaviors when it comes to cybersecurity and should be avoided by all organizations.

Using multi-factor authentication can help disrupt over 99% of cyberattacks. Microsoft

Use of single-factor authentication – where users only need to enter a username and password – was recently added to the list of risky behaviors. CISA warned that single-factor authentication for remote or administrative access to systems supporting the operation of critical infrastructure “is dangerous and significantly elevates risk to national security”.

Microsoft says that users who enable multi-factor authentication (MFA) for their accounts will end up blocking 99.9% of automated attacks.

Change default passwords as soon as possible, and use a sufficiently strong and unique password. CISA

CISA describes that using fixed or default passwords as “dangerous” and should be avoided at all cost. Default or simple passwords are good for cyber criminals because there’s a much higher chance of them being able to simply guess passwords to compromise accounts.

CISA also warns against the use of passwords that are known to have been breached previously, as that means they also provide cyber criminals with a simple means of gaining access to networks.

One in three breaches are caused by unpatched vulnerabilities. ZDNet

Finally, CISA warns that the use of unsupported or end-of-life software in critical infrastructure. By using software or operating systems that no longer receive security patches or updates, there’s the risk that cyber criminals could exploit newly discovered security vulnerabilities that emerge because old software often doesn’t receive security patches.

The 2017 WannaCry ransomware attack stands a shining example of what can go wrong when patches aren’t applied. While a patch for the vulnerability exploited by the ransomware had existed for several months, many organizations failed to install the it.

Takeaway

Reducing your organization’s cyber risks requires a holistic approach. CISA

Avoiding the use of single-factor authentication, default passwords and unsupported software will also help protect you and others from falling victim to cyberattacks.

To reduce risks, here are three cyber security actions that organizations should do first:

  • Backup Data – Employ a backup solution that automatically and continuously backs up critical data and system configurations.
  • Multi-factor Authentication – Require multi-factor authentication (MFA) for accessing your systems whenever possible. MFA should be required of all users, but start with privileged, administrative and remote access users.
  • Security Patch and Update Management – Enable automatic updates whenever possible. Replace unsupported operating systems, applications and hardware. Test and deploy patches quickly.

References:

  1. https://www.zdnet.com/article/dont-want-to-get-hacked-then-avoid-these-three-exceptionally-dangerous-cybersecurity-mistakes/
  2. https://www.zdnet.com/article/microsoft-using-multi-factor-authentication-blocks-99-9-of-account-hacks/
  3. https://us-cert.cisa.gov/ncas/alerts/TA13-175A
  4. https://www.cisa.gov/sites/default/files/publications/Cyber%20Essentials%20Starter%20Kit_03.12.2021_508_0.pdf

Merck’s Oral Antiviral Pill Reduced the Risk of Hospitalization or Death by Approximately 50 Percent

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A five-day course of Merck’s experimental oral anti-viral drug (Molnupiravir) to treat COVID-19 reduced the risk of hospitalization and death in half in a Phase 3 randomized trial the pharmaceutical company reported. The results were so astounding that the trial is being stopped early, and Merck plans to apply for emergency use authorization from Food and Drug Administration (FDA).

If approved by FDA for emergency use authorization, Molnupiravir, a joint effort between Merck and Ridgeback Biotherapeutics, would become the first orally taken antiviral medicine taken for COVID-19.

In a Phase 3 study, 7.3% of patients taking Molnupiravir were hospitalized, while 14.1% of those taking a placebo had to be admitted to the hospital. Merck also reported that no participants using Molnupiravir died through the first 29 days of the tests, while eight patients using a placebo died.

“This is a phenomenal result. This is a profound game-changer to have an oral pill that had this kind of effect, this magnitude of effect in patients who are at high-risk who are already symptomatic,” says Scott Gottlieb, former Commissioner, FDA.

References:

  1. https://www.merck.com/news/merck-and-ridgebacks-investigational-oral-antiviral-molnupiravir-reduced-the-risk-of-hospitalization-or-death-by-approximately-50-percent-compared-to-placebo-for-patients-with-mild-or-moderat/
  2. https://www.upi.com/Top_News/US/2021/10/01/Merck-Ridgeback-coronavirus-antiviral-drug-molnupiravir/6021633090401/
  3. https://www.washingtonpost.com/health/2021/10/01/pill-to-treat-covid/

October is Cyber Security Awareness Month

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“Do Your Part. #BeCyberSmart.”

Cybersecurity Awareness Month was created as a collaborative effort between government and industry. Its objective is to raise awareness about the importance of cybersecurity across our Nation, ensuring that all Americans have the resources they need to be safer and more secure online.

You can make a difference during Cybersecurity Awareness Month.

Whether you have a minute, an hour or a day – or all month long – Cybersecurity and Infrastructure Security Agency (CISA) and the National Cyber Security Alliance encourage that you check out ways you can participate and support Cybersecurity Awareness Month on social media, at home, at work or school and in the community.

#BeCyberSmart Tip: If you connect it, protect it. Outsmart cyberthreats by regularly updating your software.

Important Cybersecurity Tips to Protect Your Personal Information

  • Lock down your login: Fortify your online accounts by enabling the strongest authentication tools available, such as biometrics, security keys or a unique one-time code through an app on your mobile device. Your usernames and passwords are not enough to protect key accounts like email, banking and social media.
  • Make  your password a sentence: A strong password is a sentence that is at least 12 characters long. Focus on positive sentences or phrases that you like to think about and are easy to remember (for example, “I love country music.”). On many sites, you can even use spaces!
  • Unique account, unique password: Having separate passwords for every account helps to thwart cybercriminals. At a minimum, separate your work and personal accounts and make sure that your critical accounts have the strongest passwords. 
  • Write it down and keep it safe: Everyone can forget a password. Keep a list that’s stored in a safe, secure place away from your computer. You can alternatively use a service like a password manager to keep track of your passwords.
  • Don’t overshare on social media – Cyber criminals can learn all about you, social engineering, on social media! #BeCyberSmart and make it harder for them by avoiding posting real names, places you frequent and home, school and work locations.

 


 
Cyber Security Research Findings

These cybersecurity findings are derived from two national studies – a national survey on online behaviors and attitudes for the National Cyber Security Alliance (NCSA) and the Anti-Phishing Working Group (APWG). The findings reveal that:

  • 93 percent of Americans believe their online actions can protect not only friends and family but also help to make the internet safer for everyone around the world.
  • 96 percent of Americans feel a personal responsibility to be safer and more secure online.
  • 61 percent believe that much of online safety and security falls under their personal control, and consistent with those feelings, 90 percent said they want to learn more about keeping safer on the Internet.
  • 48 percent feel their actions to stay safe and secure can have a positive impact on financial, economic, and national security of the country, indicating Americans are open to making the bridge between their own safety and the nation’s security.

Finally, when respondents were asked why they don’t always do all the things they can or should do to stay safer online, they said they simply lacked the information or knowledge, which was a surprising finding for researchers. Moreover, 12 percent said online safety was too expensive and 5 percent said they were too busy to take the extra step.

STOP. THINK. CONNECT.

References:

  1. https://staysafeonline.org/cybersecurity-awareness-month/get-involved/
  2. https://www.stopthinkconnect.org/research-surveys/research-findings

Essential Money Moves

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Your journey to financial independence is just that—yours.

In our 2021 Money Moves Survey by SoFi, they asked people what’s most difficult for them when managing their finances. 36% responded with “Knowing what to focus on next.” So, choose the moves which may be a good fit for your situation and goals.

Here are eight essential money moves that will help to get you started and help move you towards financial independence according to SoFi.

If you’re living paycheck to paycheck:

  • Start tracking expenses. – Knowledge of where your money is going is power—and a great place to start.
  • Take charge of credit card debt. – Getting into high-interest credit card debt can make saving more difficult—but if you do have it, consolidating your debt can make it more manageable.
  • Limit impulse buys. – While non-necessary spending is a part of life (hello online shopping!), the trade-off is saving more so that you have more cushion.

If you’ve got an employer match…

  • Make sure you’re meeting the minimum to qualify. Adjust your contribution so that you don’t miss out on the match.
  • Track how much of your paycheck is going toward your 401(k) so you can stay on top of your budget and save elsewhere.
  • Don’t forget your old 401(k) when you get a new job. Generally, you can leave it, transfer it to your new plan, or rollover to an individual retirement account.

If you have high-interest debt…

  • Make a list of all your debt. Order it from lowest to highest balances so you can keep track of all of it.
  • Consider the SoFi Fireball Method. This involves tackling any debt that has an interest rate greater than 7% (aka “bad debt”) before you move onto lower-interest debts (while still making minimum payments on all your debt, of course).
  • Consider refinancing or consolidating your debt. Whether you have a student loan or high-interest credit card debt, this option could help you pay it off sooner.

If you don’t have an emergency fund…

  • Calculate what three to six months’ worth of expenses looks like for you. Take a look at an overview of your finances to help you do the math. Some online tools exist to make this easier.
  • Automate contributions to make it easy. Putting your savings on autopilot can help you set aside cash to put toward your goals.
  • Make sure your funds are accessible so you can access them when you need them. Once you set up your emergency fund, you can put extra cash in places that can help you save long term.

If you aren’t saving enough for retirement…

  • Determine the right retirement account for you. Your current employment, income, and other factors can determine whether you opt for a Traditional, Roth, or SEP IRA.
  • Start somewhere. Whether it’s a 401(k), 403(b), or an IRA, save where you can, aiming for 15% of your pre-tax income toward retirement if possible.
  • Talk to a financial planner to map your retirement goals and how you might reach them. They can explore financial strategies to fit your vision for your golden years.

If you’re saving for college, a home, or other big goals…

  • Determine how long of a timeline you’ll need to hit your goals. This will help you know whether to save in cash (for the shorter term) or investments (for the longer term).
  • Save more often—without even thinking about it. You can automate your savings by getting tools that make it easy, like cards with roundups or cash back credit cards.
  • Start investing your way. Whether you want to automate your portfolio, trade your own stocks, or buy parts of stocks—there are lots of options to put your money to work toward long-term goals.

If you have a student loan or mortgage…

  • Try to get the lowest rate you can. “Good” debt is any loan with an interest rate lower than 7%—but a lower rate can be even more manageable. If you can refinance your student loan or mortgage at a lower rate, that could mean significant savings over the long-term.
  • Consider putting extra cash in the market. Instead of throwing all your extra cash at low-interest debt, consider putting some of that money to work in an investment account.
  • Use cash back rewards to accelerate good debt paydown. Credit cards that earn cash back rewards could be used to help you pay down your debt.

If anyone depends on you for financial support…

  • Protect your loved ones first. If you haven’t looked into disability or life insurance policies, or drafted a will, make sure they’re covered should something happen to you.
  • Make sure your assets are protected, too. Whether it’s your home, apartment, or your car, insurance can help ensure you’re covered.
  • Talk to a financial planner to make sure you have all your bases covered. A financial planner can help you identify everything you’ll need to take care of.

References:

  1. https://www.sofi.com/moneymoves/

Take Control of Your Finances

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There are ways to feel more in control of your financial situation–and make the money you have go farther. The key is to take a close look at your current budget and to better manage your cash flow. You can best do this by finding expenses you may be able to pare back or eliminate, and by potentially finding new sources of income.

Smart spending and saving strategies, according to FinTech company SoFi, to follow are:

Create a Budget and Manage Your Cash Flow – Take a close look at your monthly spending to get a full picture of your spending, and start tracking your spending (every cash/debit/credit card transaction and every bill you pay) for a month or so.

Once you understand your average monthly spending, compare it to what’s coming in. You can look at your bank statements for the past few months to get an idea of much after-tax income you are taking in on average per month.

Comparing what is coming in vs. going out will help you know exactly where you stand financially.

Uncovering Places to Save – Once you understand your monthly spending and group your expenses into categories, the next step is to list your expenses in order of priority, starting with the essentials and going down to the “nice to haves.”

Once you’ve established which expenses are the most important, you can start looking for places to cut some of your unnecessary spending. For example, if you are spending a lot on restaurants and take-out, you might consider cooking at home a few more nights a week.

Negotiating with Service Providers – You may be able to negotiate for a lower rate from many of your providers, especially if you’re dealing with a company that’s in a competitive market.

Before you call or email a business or provider, it is important to know exactly how much you’re paying for a service, what you’re getting for your money, and how much the competition is charging for the same or similar service.

It’s also a good idea to make sure you are communicating with someone who actually has the power to lower your rate and, if not, ask to speak with someone who does.

You may also want to let providers know that if they can’t do better, you may decide to switch to another company.

Cutting Back on Bigger Expenses – Look at the big items in your overall budget. For example, if your car payment too high, you could buy a less expensive to cut monthly payments.

If rent is eating up too much of your income, you might want to look into finding a cheaper place to live that’s still nice, taking in a roommate, or moving in with friends.

The lower you keep these costs, the easier it will be to live well within a tight budget.

Knocking Down Debt – Having too much debt can hamper your chances of achieving financial security down the line.

That’s because when you’re spending a lot of money on interest each month, it can be harder to pay all of your other expenses on time, not to mention grow your savings.

Reducing debt may seem like a tall mountain to climb, but choosing the right debt reduction strategy may be able to help you chip away and slowly improve your financial situation.

Since credit card debt typically costs the most in interest, you might consider tackling these debts first, and then move on to the debt with the next-highest interest rate, and so on.

Starting an Emergency Fund – Start putting a little bit away into an emergency fund each month a priority: An unexpected expense—like your car breaking down or a visit to an urgent care clinic—could put you over the financial edge.

If you start putting just a small amount aside each month into an emergency fund, it won’t be long before you have a decent financial cushion that could prevent you from having to run up high interest credit debt the next time something unexpected rolls around.

Spending Only Cash for Everyday Expenses – Using plastic that can make it feel like you are not really spending money. Thus, switching to cash (and leaving the credit cards at home) for other expenses can be a great idea when money is tight.

The reason is that using cash places a harder limit on your spending and helps you become more aware of your choices. When you can literally see your money going somewhere, you may find yourself becoming much more intentional in the way you spend it.

Another benefit of cash is that it’s more difficult to get into debt since you can’t spend cash you don’t have.

Starting a Side Gig – Once you’ve done some basic budgeting, it may be clear that additional income could help ease things while money is tight.

Sometimes all it takes is some extra time and energy, but taking on a side hustle, or using your talents to pick up some freelance work can bring in additional income.

Some ideas for generating extra income include:

  • Selling things on eBay or Craigslist
  • Hold a garage sale
  • Creating an Etsy store and selling homemade goods
  • Driving for a rideshare or food delivery service
  • Giving music lessons
  • Renting out a room on Airbnb
  • Walking dogs
  • Cleaning houses
  • Babysitting
  • Handling social media for small businesses
  • Selling writing, photography, or videography services to clients

Start saving and investing, immediately – Your first financial goal should be to create an emergency fund and to establish the discipline for saving by “Paying yourself first”. To take advantage of compound interest, start investing early and regularly.

Takeaways

You can gain control of your finances by calmly sitting down, creating a budget, and determining your cash flow. This entails looking at your monthly income, as well as your average monthly spending, and seeing how it all lines up.

To create a monthly budget, you must allot funds for expenses such as rent and other bills, then sets aside a small amount directly for savings and uses the rest to live off for the month

Once you have a sense of your cash flow, you can take steps to reduce unnecessary spending, negotiate to lower monthly bills, chip away at expensive debt, and even start building a financial cushion.

References:

  1. https://www.sofi.com/learn/content/what-to-do-when-money-is-tight/
  2. https://www.usatoday.com/story/college/2012/04/25/7-steps-to-take-control-of-your-financial-future/37391767/

14 Moonshot Technologies

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Bank of America Global Research group strategists published a list of what they call technology “moonshots” to help guide long term investors in their search for the next Tesla, Amazon or Apple.

Bank of America’s (BofA) Global Research group published a list of 14 “moonshots (radical technologies of the future) that the researchers said could potentially change people’s lives and “accelerate the impact of global megatrends.”

From the sixth-generation telecom network that could download the entire collection of the New York Public Library in 20 seconds to wireless electricity, things that could radically change people’s lives are not far into the future as one might think, according to strategists led by Haim Israel, BofA’s head of global thematic investing research.

Investors have developed a growing appetite for thematic investing that focuses on understandable and relatable narratives. Led by Cathie Wood’s Ark Investment Management’s exchange-traded funds, which is focused on an “innovative disruptive technology” market niche, have attracted $42 billion of fresh money this year — surpassing the total inflows for the whole year of 2020, according to data compiled by Bloomberg Intelligence show.

Getting early into the next big thing has been crucial for one’s success in stock investing. In the past three decades, just 1.5% of companies accounted for all the wealth created in the global stock market, BofA said, citing a study from Hendrik Bessembinder, an Arizona State University professor.  

Meanwhile, incumbents are displaced at a faster rate because of accelerating innovations. Take the life span of S&P 500 companies for instance. In 1958, the average company lasted 61 years. That has shortened to 24 years by 2016 and is expected to be halved to just 12 years by 2027, BofA data show.  

Investing in early innovators or moonshot companies often require a strong stomach for losses, both in terms of the bottom line and stock performance. And certainly, not everyone has the “temperament” that will allow them to succeed.

Yet, the reward from investing in the stars of tomorrow isn’t insignificant. “While moonshots start at a low market size, their disruptive nature means there is the potential for high growth,” said the BofA’s report.

Currently, the BofA team estimated that the 14 moonshot technologies represent only $330 billion in market size. Cumulatively, they could increase 36% a year to $6.4 trillion by the 2030s. For context, profits from S&P 500 companies have grown 6% a year historically.

“These moonshots could transform and disrupt multiple industries, contributing to the next big cycle of technology-driven growth,” BofA’s report revealed. Since “the adoption of many technologies—like smartphones or renewable energy—have surpassed experts’ forecasts by decades, because we often think linearly, while the progress actually occurs exponentially.”

14 moonshot technologies for the future. (Source: BofA Global Research)

Below is the list of BofA’s 14 moonshot technologies:

  • 6G telecom networks
  • Emotional artificial intelligence
  • Brain computer interfaces
  • Bionic humans
  • Immortality
  • Synthetic biology
  • Wireless electricity
  • Holograms
  • Metaverse
  • Electric vertical takeoff and landing flying cars
  • Oceantech
  • Next generation batteries
  • Green mining
  • Carbon capture and storage

Take fifth-generation (5G) cellular wireless networks. The technology is still in the initial stages of roll-out across the globe, but it will not be able to handle the exponential growth of data transmission in the next 10 years. Sixth-generation (6G) network could enable speeds up to 400 times faster than 5G, the report noted.

“These technologies must have the potential to be economical and cost-competitive. Besides, there should be mass adoption of new products that must address a gap in the market and solve a key problem … such as climate change or improve the quality of life,” noted the 2019 BofA report.

References:

  1. https://www.bofaml.com/en-us/content/market-strategies-insights/weekly-market-recap-report.html
  2. https://www.thewealthadvisor.com/article/bofa-identifies-tech-moonshots-catch-next-apple-amazon
  3. https://financialpost.com/pmn/business-pmn/bofa-identifies-tech-moonshots-to-catch-next-apple-amazon
  4. https://finance.yahoo.com/news/moonshot-green-tech-bank-of-america-170156711.html
  5. https://www.thenationalnews.com/business/technology/bank-of-america-15-radical-technologies-will-transform-the-future-1.922278

Why Invest in Stocks?

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“Resist the human biased to act. Compound interest is the eighth wonder of the world and never interrupt it unnecessarily.”

It’s a wonderful feeling once you discover the value of financial freedom which is closely related to saving for the future and to the rationale for growing your money and accumulating wealth through long-term stock investing. Historically, stocks have shown the best return over the long term dating back almost a full century and becoming a long term investor is key to financial freedom.

From the Forbes Advisor chart, you can observe that stocks have averaged 9.59% annual returns since the 1929 Great Depression. That’s more than 40% more than bonds’ average annual returns, and over 10% higher than a balanced portfolio of both stocks and bonds. This demonstrates that remaining invested in stocks and not panicking during market dips is the best way to position yourself for long term growth.

Invest in your future

Whatever you financial plan to achieve financial freedom, it’s essential that you spend less than you earn, that you build an emergency fund, that you pay yourself first, and that you invest for the long term in order to benefit from the power of compounding.

The best way to learn investing is by doing it, explained Vitaliy Katsenelson, CFA. in a letter in which he shares investing advice to new investors. Take as much money as you are can afford to lose (because you may lose it), and invest it. Look at this sum of money as real-world tuition and leaning, and start investing one stock at a time. The most difficult part of investing is staying rational when you get blindsided by the volatility of the markets. Paper trading portfolios and practice investing won’t blindside you. Understanding your emotions that real losses and gains evoke in you and dealing with these emotions is incredibly valuable.

Invest, don’t gamble or speculate.

Do the research and analysis of a company with rigor and document your research. You’ll learn a lot from documenting and writing up your research. And, by documenting your research will keep you rational. And, don’t forget the wisdom of Charlie Munger that “All investments should begin by measuring risks”.

Avoid acting irrationally when investing 

Investors are prone to two opposing but equally debilitating fears, says Katsenelson: the fear of missing out when times are good in the stock market, and the fear of loss when markets are volatile. These two fears have absolutely no relationship with rational investing decisions. As a result, the more you are dominated by these fears, the less rational you are.

Patience to wait for the right investment opportunity to deploy your money (your capital) and then focus on it with single minded dedication can lead to lasting success. Thus, patience and a single-minded focus are key to investing success and financial freedom

Finally, mindset is everything. Without the belief in yourself that financial freedom is achievable, then little else matters. Your past doesn’t define your future, but if you truly focus on and work towards what you deserve, you can change your future to what you like.

“Spend each day trying to get a little wiser than you were when you woke up…Slug it out one inch at a time, day by day. At the end of the day – if you live long enough – most people get what they deserve” Charlie Munger

References:

  1. https://www.betterinvesting.org/learn-about-investing/free-videos
  2. https://www.betterinvesting.org/learn-about-investing/investor-education/investing/letter-to-a-young-investor
  3. https://www.forbes.com/advisor/investing/stock-and-bond-returns/
  4. https://www.vrdnation.com/poor-charlies-almanack-by-charlie-munger
  5. https://fortuneclub.co/poor-charlies-almanack/

Sequence of Returns Risk in Retirement

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A stock market pullback can pose a risk early in retirement.

Retirees face many risks when investing for retirement. Markets crash, inflation can eat into your returns, you might even worry about outliving your savings. And, there’s another big retirement risk: Sequence of returns risk.

Down markets can pose significant “sequence of returns” risk in the early years of retirement. Sequence risk is the danger that the timing of withdrawals from a retirement account will have a negative impact on the overall rate of return available to the investor, according to Investopedia.

A “sequence of returns” risk is basically about how the order, or sequence, of stock returns over time — combined with your portfolio withdrawals — can impact your balance down the road.

Once you start withdrawing income, you’re affected by the change in the sequence in which the returns occurred. During your retirement years, if a high proportion of negative returns occur in the beginning years of your retirement, it will have a lasting negative effect and reduce the amount of income you can withdraw over your lifetime.

Timing is everything. Sequence risk is the danger that the timing of withdrawals from a retirement account will damage the investor’s overall return. Account withdrawals during a bear market are more costly than the same withdrawals in a bull market.

“If there’s a big loss in the market and you’re taking withdrawals, you could be taking more from your portfolio than what it can make up for,” said certified financial planner Avani Ramnani, managing director at Francis Financial in New York. “If that happens early in retirement … the recovery may be very weak and put you in danger of not recovering at all or being lower than where you would have been and therefore jeopardizing your retirement lifestyle.”

One of the basic rules of investing is that a long-term strategy is self-correcting. And, for long-term investors — those whose retirement is many years or decades away — such market drops matter less because there’s time for their portfolios to recover from this risk before they need to start relying on that money for cash flow in retirement.

Retirement is a long game.

Since running out of money in retirement is the primary concern for most retirees, fortunately, there are options for mitigating the risk:

  • Plan to spend more conservatively since the less you spend consistently, the less you have to withdraw overall.
  • Withdraw and spend less when your portfolio performance is suffering. 
  • Reduce the risk in your portfolio by creating a low stock allocation early in retirement but increase it over time, or use bonds for short-term expenses and stocks for long-term ones.
  • Set aside assets outside your investment portfolio that can support your spending needs when stocks are underperforming.

You may simply be able to meet your goals without taking on the risk that comes with stocks.

Key Takeaways

Sequence of return risk is basically the risk that market declines in the early years of retirement, paired with ongoing withdrawals, could significantly reduce the longevity of your portfolio. Thus, timing is everything, and in retirement early market declines, particularly if they are paired with rising inflation, can have a huge effect on how long a nest egg can sustain you in retirement.

The recommended way to mitigate sequence of returns risk when you can’t predict future market performance or future rates of inflation is by managing spending and/or keeping a portion of your portfolio in liquid assets, such as cash or bonds, to ride out the market downturn.

When market returns are high and inflation is low, retirees can distribute more from their portfolios, according to Forbes Advisor Staff Editors Rob Berger and Benjamin Curry. When market returns are negative and inflation is higher than expected, retirees reduce the amount of their annual distributions.

Remember, no one can forecast market performance or economic inflation. Yet, by managing your spending, you can adjust annual withdrawal amounts to reflect inflation and market returns.

References:

  1. https://www.investopedia.com/terms/s/sequence-risk.asp
  2. https://www.thebalance.com/how-sequence-risk-affects-your-retirement-money-2388672
  3. https://www.cnbc.com/2021/09/21/stock-market-pullback-is-a-big-risk-early-in-retirement-what-to-know.html
  4. https://www.forbes.com/advisor/retirement/sequence-of-returns-risk/

Avoiding Investment Fraud

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Financially savvy and experienced investors, along with inexperienced investors, fall prey to investment fraud frequently.

Researchers have found that investment fraudsters hit their targets with an array of persuasion social engineering techniques that are tailored to the victim’s psychological profile.

Here are several “red flags” to look for:

  • If it sounds too good to be true, it is. Any investment opportunity that claims you’ll receive substantially more could be highly risky – and that means you might lose money. Be careful of claims that an investment will make “incredible gains,” is a “breakout stock pick” or has “huge upside and almost no risk!” Claims like these are hallmarks of extreme risk or outright fraud.
  • “Guaranteed returns” aren’t. Every investment carries some degree of risk, which is reflected in the rate of return you can expect to receive. If your money is perfectly safe, you’ll most likely get a low return. High returns entail high risks, possibly including a total loss on the investments. Most fraudsters spend a lot of time trying to convince investors that extremely high returns are “guaranteed” or “can’t miss.” They try to plant an image in your head of what your life will be like when you are rich. Don’t believe it.
  • Beware the “halo” effect. Investors can be blinded by a “halo” effect when a con artist comes across as likeable or trustworthy. Credibility can be faked. Check out actual qualifications.
  • “Everyone is buying it.” Watch out for pitches that stress how “everyone is investing in this, so you should, too.” Think about whether you are interested in the product. If a sales presentation focuses on how many others have bought the product, this could be a red flag.
  • Pressure to send money RIGHT NOW. Scam artists often tell their victims that this is a once-in-a-lifetime offer and it will be gone tomorrow. But resist the pressure to invest quickly and take the time you need to investigate before sending money.
  • Reciprocity. Fraudsters often try to lure investors through free investment seminars, figuring if they do a small favor for you, such as supplying a free lunch, you will do a big favor for them and invest in their product. There is never a reason to make a quick decision on an investment. If you attend a free lunch, take the material home and research both the investment and the individual selling it before you invest. Always make sure the product is right for you and that you understand what you are buying and all the associated fees.

What You Can Do to Avoid Investment Fraud

  • Ask questions. Fraudsters are counting on you not to investigate before you invest. Fend them off by doing your own digging. It’s not enough to ask for more information or for references – fraudsters have no incentive to set you straight. Take the time to do your own independent research.
  • Research before you invest. Unsolicited emails, message board postings, and company news releases should never be used as the sole basis for your investment decisions. Understand a company’s business and its products or services before investing. Look for the company’s financial statements by searching SEC’s EDGAR filing system.
  • Know the salesperson. Spend some time checking out the person touting the investment before you invest – even if you already know the person socially. Always find out whether the securities salespeople who contact you are licensed to sell securities in your state and whether they or their firms have had run-ins with regulators or other investors. You can check out the disciplinary history of brokers and advisers for free using the SEC’s and FINRA’s online databases.
  • Be wary of unsolicited offers.Be especially careful if you receive an unsolicited pitch to invest in a company, or see it praised online, but can’t find current financial information about it from independent sources. It could be a “pump and dump” scheme. Be wary if someone recommends foreign or “off-shore” investments. If something goes wrong, it’s harder to find out what happened and to locate money sent abroad.
  • Protect yourself online. Online and social marketing sites offer a wealth of opportunity for fraudsters. For tips on how to protect yourself online see Protect Your Social Media Accounts.

You should strive to become an educated investor and to know what to look for. Make yourself knowledgeable about different types of scams and red flags that may signal investment fraud.

References:

  1. https://www.investor.gov/protect-your-investments/fraud/how-avoid-fraud/what-you-can-do-avoid-investment-fraud
  2. https://www.investor.gov/protect-your-investments/fraud/how-avoid-fraud/protect-your-social-media-accounts

September is Healthy Aging Month

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Let’s encourage ourselves and others to:

  • Stay Fit!
  • Stay Adventurous!
  • Stay Healthy!
  • Stay Connected!

September celebrates Healthy Aging Month. It is a terrific time to get started on a healthy lifestyle which should include getting and staying in shape, the challenging the mind and spirit, and making a commitment and keeping up social connections.

The observance is designed to encourage people to get going on positive measures and activities that can impact your physical health, emotional well-being, financial security and purpose.

Here are some ideas from the editors of Healthy Aging® Magazine to get you thinking and moving in the right direction.

10 Tips for Rein­vent­ing Your­self dur­ing Sep­tem­ber Is Healthy Aging Month: 

  1. Do not act your age or at least what you think your cur­rent age should act like. What was your best year so far? 28? 40? Now? Pic­ture your­self at that age and be it. Some peo­ple may say this is denial, but we say it’s pos­i­tive think­ing and goes a long way toward feel­ing bet­ter about your­self. (Tip:  Don’t keep look­ing in the mir­ror, just FEEL IT!)
  2. Be pos­i­tive in your con­ver­sa­tions and your actions every day. When you catch your­self com­plain­ing, check your­self right there and change the con­ver­sa­tion to some­thing pos­i­tive. (Tip: Stop watch­ing the police reports on the local news).
  3. Have neg­a­tive friends who com­plain all of the time and con­stantly talk about how awful every­thing is? Drop them. As cruel as that may sound, dis­tance your­self from peo­ple who do not have a pos­i­tive out­look on life. They will only depress you and stop you from mov­ing for­ward. Sur­round your­self with ener­getic, happy, pos­i­tive peo­ple of all ages and you will be hap­pier too. (Tip: Smile often. It’s con­ta­gious and wards off naysayers.)
  4. Walk like a vibrant, healthy per­son. Come on. You can prob­a­bly do it. Ana­lyze your gait. Do you walk slowly because you have just become lazy or, per­haps, have a fear of falling? (Tip: Make a con­scious effort to take big strides, walk with your heel first, and wear com­fort­able shoes.)
  5. Stand up straight! You can knock off the appear­ance of a few extra years with this trick your mother kept try­ing to tell you. Look at your­self in the mir­ror. Are you hold­ing your stom­ach in, have your shoul­ders back, chin up? Check out how much bet­ter your neck looks! Fix your stance and prac­tice it every day, all day until it is nat­ural. You will look great and feel bet­ter. (Tip: Your waist­line will look trim­mer if you fol­low this advice.)
  6. How’s your smile? Research shows peo­ple who smile more often are hap­pier. Your teeth are just as impor­tant to your good health as the rest of your body. Not only is it the first thing peo­ple notice, but good oral health is a gate­way to your over­all well-being. (Tip: Go to the den­tist reg­u­larly and look into teeth whiten­ing. Noth­ing says old more than yel­low­ing teeth!)
  7. Lonely? Stop brood­ing and com­plain­ing about hav­ing no friends or fam­ily. Do some­thing about it now. Right this minute. Pick up the phone, land­line, or cell and make a call to do one or more of the fol­low­ing: Vol­un­teer your time, Take a class,  Invite some­one to meet for lunch, brunch, din­ner, or cof­fee. (Tip: Vol­un­teer at the local pub­lic school to stay in touch with younger peo­ple and to keep cur­rent on trends, take a com­puter class or a tuto­r­ial ses­sion at your cell phone store to keep up with tech­nol­ogy, choose a new per­son every week for your din­ing out.)
  8. Start walk­ing not only for your health but to see the neigh­bors. Have a dog? You’ll be amazed how the dog can be a con­ver­sa­tion starter. (Tip: If you don’t have time for a dog, go to your local ani­mal shel­ter and vol­un­teer. You will be thrilled by the puppy love!)
  9. Make this month the time to set up your annual phys­i­cal and other health screen­ings. Go to the appoint­ments and then, hope­fully, you can stop wor­ry­ing about ail­ments for a while.
  10. Find your inner artist. Who says tak­ing music lessons is for young school chil­dren? You may have an artist lurk­ing inside you just wait­ing to be tapped.  Have you always wanted to play the piano, vio­lin, or tuba? Have you ever won­dered if you could paint a por­trait or scenic in oil? What about work­ing in wood? (Tip: Sign up now for fall art or music classes and dis­cover your inner artist!)

Just embrace the fact that it’s never too late to find a new career, a new sport, passion or hobby, and travel more than ever, according to Carolyn Worthington, editor-in-chief of Healthy Aging® Magazine and executive director of Healthy Aging®.

References:

  1. https://healthyaging.net/healthy-month/september-is-healthy-