Don’t Forget To Include Your Pets In Your Home Evacuation Plan

Many homeowners will form evacuation plans for their homes and practice them with family members, but most have failed to include their pets.  An evacuation plan is a necessity for every home, especially if you live in an area where fires, and other disasters are a possibility. Take these steps to add your pets to your evacuation plan.

Assign pet evacuation responsibility to an adult. 
Everyone in the household should know what to do during an evacuation. That includes assigning one parent or adult to the pets. This allows the other parent and the children to focus on their part of the evacuation plan, so there’s no confusion during a high-stress moment when time is of the essence.

Keep evacuation maps and pet carriers readily accessible. 
If you need to evacuate, you should know exactly where every important item is located. If your pets require carriers, keep them in a place that you can access easily.  Don’t forget any essential medications which might not be easily replaced in an emergency situation.

Practice your plan. 
Include your pets in your home evacuation drills. It will help you see how they will respond and make changes to your evacuation plan if necessary. Getting your dog out of a window may not be as simple as you think!

Be prepared in case you get separated from your pets. 
No matter how much you drill your evacuation plan, it’s possible that a dog or cat will run off while you’re focusing on keeping your family safe. A microchip or a GPS-compatible tag can help you find your pets once it’s safe to return to the area. Make sure all pets wear collars and tags with up-to-date identification information. Your pet’s ID tag should contain his name, telephone number and any urgent medical needs

Get a Rescue Alert Sticker
This easy-to-use sticker will let people know that pets are inside your home. Make sure it is visible to rescue workers (we recommend placing it on or near your front door), and that it includes the types and number of pets in your home as well as the name and number of your veterinarian. If you must evacuate with your pets, and if time allows, write “EVACUATED” across the stickers. 

Understanding Credit Reporting

Historically low interest rates present a welcome opportunity for many homeowners to improve their financial situation by refinancing their mortgage.  But, like everything else in the world of finance, there are no free lunches.  To take advantage of these lower rates, homeowners must leap the FICO hurdle.

To qualify for the best loans at the lowest rates, borrowers must qualify financially and are scored by lenders using a computerized model for evaluating credit risk, developed by Fair, Isaac, and Company, known as the FICO score.

Mortgage lenders are in the business of making money by lending it and being repaid on time.  They gauge the risks associated with making that loan on a number of factors, not the least of which is the likelihood of timely repayment.

The FICO scoring system compares borrower’s credit capabilities to those of similar borrowers all over the country.  A borrower’s credit history gives a strong indication of integrity, attitude, and discipline as well as a measure of their capability to pay bills on time.

Three major credit reporting agencies gather credit information:  Experian, Equifax, and Transunion.  The firms act independently of each other and use different methods for gathering information, hence the reports of each may differ. 

The reporting agencies issue several different types of reports.  A Consumer Report is the basic consumer report issued when an individual orders his own credit report.  The Merchant Report is more complete and contains the full FICO scores.

Lenders view these scores as just one of several criteria for evaluating the ability of a borrower to pay back a loan.  The scores, ranging from 0 to 850, are numbers that tell lenders how likely an individual is to repay a loan, or make credit payments on time.  The higher the score, the better the credit risk.  Scores of 700+ make A credit grades, 640+ for a B grade, and below 579 fail.

According to mortgage broker Ron Goerss of Partners Mortgage, the most important factors to mortgage lenders are mortgage history, derogatory credit history, liens or judgments, length of credit history, depth of credit history, proportion of debt to credit balances, and the amount of available credit.

FICO Score, How To Raise my credit Score

A borrower can improve his FICO score over time by paying bills—especially mortgage payments—on time.  Late payments cost points.  To get the best scores, one should accumulate at least 36 months of a timely payment history.  Generally speaking, a borrower will have an excellent credit score with four major accounts ($1,500 credit limits or higher) all with 36 months of spotless payment history, and all usually maintaining balances that are at or below 60% of available credit limits.

Despite paying bills on time, it is still possible to have a lower credit score.  Too many open accounts with higher balances will pull the score down.  Too many inquiries hurt the score.  Too many monthly obligations weaken the score.

Finally, the real negatives are late mortgage payments, collection history, charge-offs, repossessions, and bankruptcy.  While all of those can be worked around, most lenders will refuse a conventional loan to someone with foreclosure history on their report.

It’s a good idea to periodically review your FICO score.  Erroneous information may be reported, and if you know ahead of time, you can write a letter to the credit-reporting agency and request a correction.  For more information on FICO scoring and obtaining your FICO scores: www.creditline.com and www.creditreporting.com.

Market Commentary – April 15, 2019

Investors took an intermission.
The curtain appeared to close on the first act of 2019 last week – and what an impressive act it was. The Standard & Poor’s 500 Index delivered some dramatic returns and is less than 1 percent away from a new all-time high.

Despite relatively few shares changing hands, major U.S. indices eked out gains. Ben Levisohn of Barron’s explained:
“Trading volume was tepid at best. This past Monday, fewer shares changed hands than on any day since December 24 – when the market closed early for Christmas. Tuesday’s volume was lower than Monday’s, Wednesday’s was lower than Tuesday’s, and…well, you get the point. That was just another sign that no one wanted to place any big bets on the market this past week – in either direction.”

Investors were complacent even though news suggested trade talks with China were progressing well. They remained unruffled in the face of a Presidential tweet suggesting the United States will impose tariffs on Europe in retaliation for illegal subsidies to a European aerospace firm.

There was another interesting development in the United States last week. It was widely reported that a number of companies in retail and banking sectors increased entry-level hourly wages to levels well above the national minimum wage of $7.25 an hour. The companies are paying $13 to $20 an hour, according to Renae Merle of The Washington Post and a report from Reuters.

That is good news for workers, but not such good news for investors since higher wages could lead to lower corporate profits, reported Joe Wallace and Akane Otani of The Wall Street Journal.

Thought required. People make everyday decisions based on the information they possess at any given moment, explained The Economist. As understanding of an issue changes, so do the decisions people make.

For example, a lot of people dislike plastic grocery bags. Many shoppers choose to take cloth bags to the grocery store rather than use plastic bags provided by the store. In fact, some 240 cities and counties have laws that ban or tax plastic bags, according to Planet Money, and there is a national movement afoot to ban the bags.

However, the economics of plastic grocery bags is not as straightforward as many believe. Banning plastic bags appears to be an effective solution to a serious environmental issue. Unfortunately, it is not. An Australian economist studied the effects of plastic bag bans and discovered bans helped and hurt the environment:

  • The good news: Cities with bans used fewer plastic bags, and 40 of those cities generated about 40 million fewer pounds of plastic trash annually.
  • The bad news: Sales of plastic garbage bags increased by 120 percent after the ban, possibly because people reused grocery bags to line trashcans and clean up after dogs. Since trash bags are made of heavier plastic than grocery bags, about 30 percent of the plastic trash gains associated with the bans were lost.

In addition, paper bag use rose, creating 80 million pounds of paper trash annually. Paper is biodegradable and can be composted; however, producing paper bags requires water, fuel, and trees, so that should be considered as well, reported Stanford Magazine.

A separate study conducted by the Danish government found, “The most environment-friendly way to carry groceries is to use the same bag over and over again…the best reusable ones are made from polyester or plastics like polypropylene.”

Weekly Focus – Think About It
Monday, April 15 is tax day in the United States. Below is an excerpt from a radio show:
Vanek Smith: Joe and his California tax team are eating lunch and talking shop. And they tell Joe they have this idea, an idea they think would save California a bunch of money and time and help taxpayers. They say, most people in California have really simple taxes. They get all of their income from a regular paycheck, and taxes are already withheld from those paychecks.

Bankman: So their idea was – why don’t we start off giving them a tax return that’s already filled out with the income we know they have? And then they can make corrections on it. That was their idea…

Vanek Smith: So they did a pilot program in California. In the 2004 tax season, they sent [completed forms] out to about 11,000 taxpayers along with this little survey.

Bankman: So we asked people, do you think you’d like to use this again next year? And 99 percent of the people said yes. Ninety-nine percent of people don’t say yes to anything.”
–Joseph Bankman, Stanford Professor of Law and Business and Stacey Vanek Smith, Planet Money radio host

Best regards,
John F. Reutemann, Jr., CLU, CFP®

P.S.  Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added.

Investment advice offered through Research Financial Strategies, a registered investment advisor.

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

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* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
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Sources:
https://www.barrons.com/articles/stocks-near-record-highs-as-investors-sit-tight-51555121334?mod=hp_DAY_3 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-15-19_Barrons-Stocks_Near_Record_Highs_as_Investors_Sit_Tight-Footnote_1.pdf)
https://www.nytimes.com/2019/04/09/us/politics/boeing-airbus-tariffs.html
https://www.washingtonpost.com/business/2019/04/12/jamie-dimon-defends-jpmorgan-chases-an-hour-minimum-wage-says-its-not-an-arms-race/?utm_term=.4f16708d86ab
https://www.nbcnews.com/business/business-news/target-raises-minimum-wage-13-hour-tight-labor-market-n990866
https://www.wsj.com/articles/investors-brace-for-hit-to-profits-as-costs-rise-11554283800 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-15-19_WSJ-Investors_Brace_for_Hit_to_Profits_as_Costs_Rise-Footnote_5.pdf)
https://www.economist.com/finance-and-economics/2019/04/04/simple-interactions-can-have-unpredictable-consequences (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-15-19_TheEconomist-Simple_Interactions_Can_Have_Unpredictable_Consequences-Footnote_6.pdf)
https://www.npr.org/sections/money/2019/04/09/711181385/are-plastic-bag-bans-garbage
https://stanfordmag.org/contents/paper-plastic-or-reusable?utm_source=npr_newsletter&utm_medium=email&utm_content=20190408&utm_campaign=money&utm_term=nprnews
https://www.npr.org/templates/transcript/transcript.php?storyId=521132960

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