Net Income Real Estate | on April 7, 2015
In today’s Wealth Building “Shout-Outs! With Russ Whitney” video, Russ discusses some of the biggest fears that people have when they are getting started in real estate.
See how Russ takes amateurs by the hand and literally shows them his process of overcoming information overload, the fear of making an offer, and even the simple fear of calling a seller.
These are some of the most common obstacles when getting started and once you see Russ’ strategy, you too can overcome these common fears.
Watch the Shout-Out Video Now.
Cybercrooks Are Targeting Retirement Accounts
Cybercrooks Targeting Retirement Accounts
When she logged in to view her account in November, she expected to see a balance of more than $80,000. Instead, she saw a balance of only about $8,000.
“I was very shocked by that. I thought there must be some mistake here,” she said.
She soon found out it was no mistake.
“Indeed, my money had been systematically withdrawn over the past couple of months,” Bennett said she learned after contacting her employer’s retirement plan adviser and the mutual fund company that held the money.
Someone had stolen her identity and was able to pose as her, changing Bennett’s mailing address, redeeming big chunks of her mutual funds and having checks mailed to new locations – first to the Minneapolis-St. Paul area and then New York City. A bank cashed the first two checks, but when Bennett discovered the heist, payment was stopped on a third check.
But another shock was still in store for Bennett.
When she contacted a representative at the mutual fund company, no immediate guarantee was made that she’d ever see that money again.
“When I tell people they’re like, ‘What?’ And then the next thing is, ‘Well, surely they have to make sure you get your money back.’ And then when I say, ‘Well no, no one will tell me I’m going to get my money back,’ that’s when it gets scary. And that’s when you get people’s attention,” Bennett said.
Unlike with stolen credit cards, a saver’s losses to fraud in retirement investment accounts aren’t limited by federal law, although mutual fund companies typically say they’ll reimburse funds lost to fraudulent activity.
It’s an issue to be aware of as cyberattacks on retirement funds rise.
“Hackers are finding it’s getting harder to hack bank accounts, so they’re saying where else is there more money? Where can we go? And they’ve started to discover 401(k) accounts, they’ve started to discover retirement funds,” said Ed Mierzwinski, senior director of the federal consumer program for the U.S. Public Research Interest Group.
At a 2019 forum for institutions involved in retirement planning, industry expert Larry Goldbrum, of Reliance Trust, told attendees that while overall cyberfraud and account fraud was down – cyberfraud amounted to $14.7 billion in 2018 – fraud in retirement accounts was rising, according to a report by the National Association of Plan Advisors.
Cybercriminals today are “looking for any possible route into people’s financial transactions, and they are increasingly focusing their efforts outside financial institutions’ firewalls,” said Steven Silberstein, chief executive officer of Financial Services Information Sharing and Analysis Center, an industry consortium dedicated to reducing cyber-risk in the global financial system.
“In other words, directly at the public,” Silberstein said. “E-mail compromises, spear phishing and social profiling are some of the key tactics being used to target all types of assets, including retirement accounts.”
In spear phishing, cyberbandits send emails, purportedly from a known or trusted sender, in the hope of persuading potential victims to reveal confidential financial information.
The good news in Bennett’s case is that American Funds, the mutual fund company that holds her retirement savings, has agreed to restore the money she lost, even though at first Bennett said representatives gave her no assurance of reimbursement.
Still, what happened to Bennett serves as a cautionary tale that people with 401(k) accounts and other types of retirement savings accounts need to be on guard.
“The scenarios continue to evolve, so while our nearly 7,000 member financial institutions are constantly developing their cyberdefenses, it’s also critical for consumers to practice good cyberhygiene and be on the lookout for suspicious activity,” said Silberstein, of the Financial Services Information Sharing and Analysis Center.
When crooks gain entry to consumer bank and retirement accounts, the point of entry more often than not is the victim’s email account, said Kevin Bong, director of cybersecurity for the accounting and consulting firm Sikich. Oftentimes, people’s account passwords, obtained in data breaches and then sold on the “dark web” to cybercriminals, are used to break into an email account and take it over without the victim knowing it.
“We’re definitely seeing that by getting just that one account – usually your email account – they use that to figure out, ‘Here’s my bank, here’s where my retirement accounts are,'” Bong said. “You’ve probably got a different password on your retirement account than you do on your email address, but what do you do if you forget that password? Well, you click ‘Forgot Password’ and they email a link to reset your password. So with access to your email address, they really have access to all those other things in a lot of cases.”
Bennett doesn’t know how a crook got into her American Funds account and started draining it. American Funds said its system wasn’t hacked, and that it sends out notices via postal mail when things like changes of address take place online.
Bennett is executive director of the Wisconsin Newspaper Association. Her retirement savings tool is what’s known a Simple Plan, a tax-deferred, employer-sponsored account with some similarities to 401(k) and 403(b) plans that is tailored for smaller employers.
Asked about Bennett’s case, American Fund issued a statement: “Our mission is to help people save for a secure retirement. When one of our customers is the victim of identity theft, we hold ourselves accountable to immediately conduct a thorough examination of what happened and take appropriate action. We use instances like this to strengthen our practices and conduct additional staff training if needed. We have communicated to the customer that her savings, including any accrued dividends or appreciation, will be reinstated. We will work with law enforcement to aid in their investigation.”
Mierzwinski, of the U.S. Public Research Interest Group, said people can’t assume whomever holds their retirement money will reimburse them after a hack, but he said the biggest companies typically do.
Charles Schwab, for example, states online it will “cover 100% of any losses in any of your Schwab accounts due to unauthorized activity.” Fidelity also says it will reimburse customers for any financial losses resulting from unauthorized activity on Fidelity accounts. American Funds states on its website: “We review each report of unauthorized access thoroughly, file appropriate notices with law enforcement agencies, and, in the event of a financial loss, we assess the facts and circumstances for potential reimbursement to your account.”
Companies do need to investigate the hacks for fraud and make sure law enforcement is notified a crime has taken place, experts said.
Cybersecurity experts say if retirement savers have access to their accounts online, one of the best things they can do is make it very hard for hackers to take over their accounts. Here are some tips they recommend:
Make sure any computer or device used to access accounts is protected by a firewall and has current antivirus and antispyware software.
Be wary of responding to, opening attachments in or clicking on links in emails that ask for your financial information.
Open and read any letters or paper statements from your mutual fund or money manager to see if everything looks accurate, and notify them promptly if it appears unauthorized activity has taken place. Investment firms often also will send letters via postal service to let clients know if any changes have been made to details like a home address.
Sikich’s Bong said one important way of increasing security for an account is a strong password that isn’t used for any other types of online accounts. Long passwords with phrases such as “Dogcatfish22” are better and easier to remember than shorter ones, he said.
“It’s a lot longer so people can’t break it as easily,” Bong said.
Mierzwinski said retirement accounts could be particularly vulnerable because account holders might neglect looking at their statements. In some cases, they’ve been told over the years just to let the money grow and not check on it too frequently. That advice isn’t prudent anymore in an age of cybercrime.
“You know it’s just a statement, but open it,” he said.
Bennett said she wants people to know they need to check regularly on their retirement savings.
“If it can happen to me, it can happen with everybody,” she said.
Follow Paul Gores on Twitter @pgores.© Copyright 2020 Journal Sentinel, All Rights Reserved.
Markets in 2019: Record Stocks, Lower Rates, So-So IPOs
NEW YORK — On January 3, the S&P 500 sank 2.5% when Apple warned of sagging demand for the iPhone, an inauspicious start to 2019 following a 14% drubbing in last year’s fourth quarter.
On January 4, Federal Reserve Chairman Jay Powell said the central bank would be “patient” with its interest rate policy following four increases in 2018. The S&P 500 soared 3.4% and by the end of the month was up nearly 8%.
January’s swing helped set the tone for a year in which the market responded to every downturn with a more sustained upswing. Along the way, stocks kept setting records — 32 of them for the S&P 500 by Dec. 20, and 19 for the Dow Jones Industrial Average.
By its final policy meeting in December, the Fed had completely reversed course and cut rates three times in what Powell called a pre-emptive move against any impact a sluggish global economy and the U.S.-China trade war might have on U.S. economic growth. The stock market, and most Fed observers not named Trump, approved of the Fed’s actions.
Investors’ uncertainty over trade policy eased by December as Washington and Beijing reached a modest, interim agreement that averted a new round of tariffs on $160 billion worth of Chinese imports and reduced existing import taxes on about $112 billion in other Chinese goods.
While the pact left unresolved some of the thorniest issues between the two countries, investors appeared happy to have a de-escalation in trade tensions now and push off lingering concerns until 2020.
Through it all, the U.S. economy and consumers’ appetite for spending remained resilient, supporting the market’s record-shattering, year-end rally.
ALMOST EVERYTHING’S A WINNER
Investments around the world were winners in 2019 as central banks unleashed more stimulus to bolster the global economy against the damage created by President Donald Trump’s trade war. Not only did U.S. stocks rise, so did high-quality bonds, low-quality bonds and foreign stocks. Among the few losers: junk bonds with the very lowest credit ratings, but a better performance from bonds with bad but not the worst ratings meant high-yield indexes still generally made gains.
KEEPS ON TICKING
The U.S. economy withstood a number of challenges in 2019. President Trump’s trade war with China intensified as both sides increased tariffs. Fears of recession spiked in late summer and fall as exports fell and businesses, facing higher costs on imported goods, cut back spending on new machinery and equipment. Overseas economies also stumbled, with Germany nearly falling into recession and growth in the U.K. slowing amid Brexit uncertainty. Still, the U.S. consumer kept spending as the unemployment rate hit a 50-year low and wage growth picked up for workers outside managerial ranks. Most economists expect modest growth in 2020.
For initial public offerings, 2019 was like a year in Hollywood: There were some phenomenal successes and some notable flops. Ride-hailing giant Uber and rival Lyft were huge disappointments. Video-conference company Zoom and workplace messaging company Slack each soared on their first day of trading, but while Zoom kept zooming Slack, well, slacked off after that. For non-tech companies, Beyond Meat and its plant-based burgers hit the spot while SmileDirectClub produced mostly frowns. WeWorks’ botched IPO signalled a change in IPO investors’ mindset.
TECH IS CHIPPER
Technology stocks soared in 2019 and far outpaced every other sector in the S&P 500. Chipmakers, including Advanced Micro Devices and Lam Research, made some of the biggest gains, despite a trade war that threatened business in China. Apple and Microsoft had their biggest share gains in a decade and each topped $1 trillion in market value. Energy stocks gained the least amid concerns that oil supply is outpacing demand.
EARNINGS EASE UP
Corporate profits hit the brakes in 2019, a year after a big tax cut helped juice results. On top of no longer getting the benefit of the first year of lower tax rates, a slowing global economy weighed on company revenues. If S&P 500 companies end up reporting four straight quarter of declines for 2019, as analysts expect, it would be the first time that’s happened since 2015-16. Still, analysts tend to set low expectations that most companies are able to beat, so investors aren’t panicked by the slower profit growth.
CAN NEGATIVE BE A POSITIVE?
Would you pay someone to lend money to them? The practice has become more common around the world — $13 trillion in bonds globally had negative yields as of November, according to Deutsche Bank. Much of that total is from Japan, France and Germany, countries that account for nearly a quarter of all the world’s bonds. It’s the result of shock-therapy by the European Central Bank and others to try to jolt their economies and inflation higher.
THE FED’S U-TURN
The Federal Reserve changed course on interest rate policy this year, cutting its benchmark rate three times after more than two years of increases. Chairman Jerome Powell portrayed those cuts as “insurance” against a slowdown resulting from weak global growth. Prior to late 2015, the Fed had been keeping rates at a record low near zero to stimulate the economy. In December, the Fed said it was prepared to keep rates low at least through next year.
A strong labour market and a steady decline in mortgage rates stoked demand among would-be homeowners this year, driving U.S. home sales higher. A persistently limited supply of previously occupied homes for sale at a time when millennials are increasingly seeking to become homeowners also helped to stoke demand, even though affordability remained a challenge in many markets. The housing trends favoured U.S. homebuilders, whose shares surged well above the broader market.
CLICKS AGAIN OUTSHINE BRICKS
Retailers had a mixed year as they continued beefing up their online sales strategies amid declining foot traffic. Department stores, and Macy’s in particular, fell sharply. Specialty retailers did much better, with electronics retailer Best Buy, car dealership chain CarMax and home improvement retailers Home Depot and Lowe’s among those making sharp gains. As the year wound down, retailers were hoping that low unemployment, higher wages and the record-setting stock market would translate into robust holiday shopping.
Plant-based meat has gone mainstream. Beyond Meat, which makes burgers and sausages from pea protein, had one of the most successful IPOs of the year. Burger King’s soy-based Impossible Whopper was a big hit. Tyson Foods, Nestle and Kellogg all introduced plant-based meats. Health and animal welfare concerns are driving the trend. U.S. plant-based meat sales jumped 10% this year, to nearly $1 billion; traditional meat sales rose 2% to $95 billion in that same time, Nielsen says.
Stan Choe, Seth Sutel, Paul Harloff, Damian Troise, Dee-Ann Durbin, Chris Rugaber and graphics artist Joseph Paschke contributed to this report.© 2019 The Canadian Press. All rights reserved.
‘Funding Secured’: Tesla’s Stock Hits Musk’s Infamous $420 Level
Just a few days after trading above $400 for the first time ever, Tesla’s stock briefly crossed $420 in intra-day trading on Monday morning. This comes 16 months after CEO Elon Musk infamously tweeted that the company had “funding secured” for a buyout at the $420 per share level.
On Friday, S3 Partners analyst Ihor Dusaniwsky said Tesla’s 126% rally since its June lows have it on the brink of what could be an explosive short covering event.
“Tesla shares shorted have not dipped below 20 million shares since mid-2013, but as its stock price keeps hitting historical highs we can expect short covering to accelerate as short mark-to-market losses mount,” Dusaniwsky said.
Tesla’s stock traded higher by 3.3% to $418.93 per share at time of publication.
© 2015 Benzinga Newswires. Benzinga does not provide investment advice. All rights reserved.
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