Broker Check

The RFG Weekly Wealth Report

August 23, 2016
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Last week, Wall Street was speculating about monetary policy with the enthusiasm of commentators trying to predict who will bring home Olympic gold.

The Federal Open Market Committee (FOMC) is now expected to introduce another rate hike before the end of 2016, according to the BBC, and it has just three opportunities to deliver the goods - during its September, November, or December meetings.

Analysts and pundits parsed minutes from July's FOMC meeting looking for clues about timing and found relatively few because there was no consensus view at the July meeting. Recently, the CME Fed Watch tool (which looks at 30-Day Fed Fund futures prices to gauge the likelihood of changes in Fed policy) put the probability of one-quarter to one-half percentage point rate increase during September at 88 percent.

That may change this week after Fed Chair Janet Yellen speaks at the Fed's summer retreat in Jackson Hole, Wyoming. She's expected to provide some indication of whether the Fed is ready to take action.

If you would like more information, just 'friend' the Fed. It now has a Facebook page.

PUBLIC WI-FI IS REMARKABLY CONVENIENT, making it possible to connect your tablet, laptop, phone, or other device in the middle of a national park, at a local bookstore or café, or while waiting for a flight. Whenever you're connecting in a public venue, remember public Wi-Fi is not secure - even if you're paying to access it.

Protect yourself with some dos and don'ts of free public Wi-Fi:

Do:

  • Turn 'sharing' off. Your computer may be set to 'share' files and printers or allow remote login from other computers. Make sure 'sharing' is turned off when you are on public Wi-Fi.
  • Access only public sites. Check the weather or stock markets. Read the news or your favorite blogs. Avoid sites that require you to login.
  • Use a virtual private network or VPN. VPN software may allow you to route all of your activity through a separate and secure private network even when using public Wi-Fi.

Don't:

  • Assume a Wi-Fi option is legitimate. Cyber criminals have been known to set-up connections with names that are similar to the name of wireless offered by the café, hotel, etc. Talk with an employee before accessing Wi-Fi to get the correct name and IP address.
  • Access password-protected websites. When you're on public Wi-Fi, do not log in to password protected email accounts or social media sites; do not enter credit card information; and do not engage in online banking.

Public Wi-Fi is wonderful - as long as you understand the risks and protect your personal information.

Quote of the Week

"I just work hard and try my best every time I step up on those blocks. I'm very goal-oriented. I've always set high goals for myself. When I was little I never dreamed of going to the Olympics, but once I did I wanted to do my very best at that level. Four years ago, when I was visualizing my final, I never envisaged anything other than winning gold. Once I get to that level, I'm able to set the goals for myself and go out and achieve them."

--Katie Ledecky, Olympic gold medalist

Golf Tip of the Week

Help with the slice

The slice can be one of the most frustrating things in golf. Just when you think you have everything under control, your drive goes sailing off into a slice that lands in the woods.

One of the most common causes of a slice is the placement of your feet at address. Your feet dictate how your club contacts the ball. Take your stance and place a fairway wood at your feet, pointed toward the target. When you place your feet properly, they will be lined up along that straight line made by the club. Keep your feet lined up properly, and you can start to cure your slice.

Financial Question of the Week

Am I holding too much cash?

Many investors hold large amounts of cash as they await the next market downturn and seek safety of principal. But is this the best strategy?

Although return expectations for investments aren't what they used to be, by staying overweight cash, you may be missing out on years of compounding returns. And cash is not just earning little to no return, it will also lose purchasing power during times of inflation. While keeping some cash in your portfolio can be a good thing, it is extremely easy to make the mistake of keeping too much cash for too long.

The amount of cash you hold should be dependent on:

  • Your emergency reserve need (Typically 3 - 6 months of expenses)
  • Your short and long term financial goals
  • Your risk tolerance

Although many investors use large cash positions to manage risk, this is not a prudent investment strategy. There is a large world of alternatives available to risk averse investors that may better help them to accomplish financial goals.

Please contact our office if you would like to review your financial position, determine an appropriate amount of cash reserves to maintain, and discuss prudently investing any excess cash utilizing investment programs that are in your best interests and aligned with your risk tolerance.