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Role of tending to family members typically falls to women

65 percent of older adults rely on family and friends for long-term care needs”

As parents reach their golden years, many need their adult children’s help for daily living or for simple tasks like rides to doctor’s appointments and going to the grocery store or more intense care such as dressing, bathing and administering medication.

According to the Family Caregiver Alliance, 65 percent of older adults rely on family and friends for long-term care needs with 30 percent supplementing family care with paid providers. These informal providers give nearly $500 billion in valued services. A majority of the time — an estimated 66 percent — the caretaking tasks fall to women who give at least 20 hours of unpaid care on average while also balancing their own families and working outside the home.

When folks are giving so much of themselves to others, caregivers often suffer burnout from physical, mental and emotional exhaustion, including anxiety, stress and depression. “You have to make sure that you are not overextending yourself,” said Tammy Bresnahan, AARP’s associate state director for advocacy. “… That is why we recommend that you find breathing exercises and/or yoga or try to carve out a little bit of time for yourself so you are not all consumed.”

She suggests siblings may want to split up duties if possible, such as one takes the parent to doctor’s appointments while the other does home visits.

Elizabeth Weglein, CEO of the Elizabeth Cooney Care Network, believes it is important for caregivers to take time for themselves.

“If you are able to take care of yourself, you can take better care of someone else,” she said. “Most caregivers put themselves at the bottom row and take care of themselves last. Their health deteriorates fairly quickly. So really the mantra should be always take care of yourself.”

The advice is similar to the scenario you hear before an airplane flight from attendants who instruct caregivers, in the case of an emergency, to put on their oxygen masks first before helping their loved ones.

“Caregivers don’t always realize it when they are in the midst of it,” Weglein said. “They need to be taking care of themselves, getting time off. Even just going to the grocery store alone or going to get their hair done or seeing a friend and having lunch. Just having some downtime to talk. The value of that break is so high.”

One of the biggest needs for caregivers is respite care. Some caregivers need to attend out-of-town funerals or important events. Others need to have surgery or be in a medical facility for a short time.

Maryland is one of 16 states that utilizes a federal grant to provide emergency respite care services within 72 hours, allotting families $225 a year for services. Beginning in fall 2017, the Elizabeth Cooney Care Network serves as administrator.

“The individuals who have utilized (the grant) were very thankful,” Weglein said. “They really did not have any resources to turn if it had not been for the grant. …The good part is it doesn’t have a lot of strings. There is no economic requirement. They just have to have a need. It is supporting respite care which means it is helping the primary caregiver.”

Weglein believes the grant is unique because it can be triggered so quickly and families may call themselves.

“In Maryland, there are a lot of gatekeepers where you have to call this entity, get prequalified and then call,” Weglein said. “This particular grant was really designed to be very free and accessible that a family caregiver could just call Elizabeth Cooney 24 hours a day, trigger the grant and then services would be rendered within a 72-hour period for the total of $225. We’ve been very creative with that $225 to create support systems that really maximize the need for that individual.”

The Maryland Healthy Families Working Act, which took effect in February, also helps caregivers. The bill, vetoed by Gov. Larry Hogan but overridden by the Maryland General Assembly, requires employers with 15 or more employees to provide paid sick/safe leave for up to five days. Before the act, some fields, such as retail and food service, had no paid sick/safe leave.

“There is some fear from some businesses that it is going to hurt the business,” Weglein said. “… My perspective on how we treat our employees and also how we treat our clients (is) you support your team. The stronger and happier and healthier your team is, the stronger your company is.”

Weglein notes the better we understand taking care of our own families, especially with the aging population, the better we will be as a society in the state.

“Overall, financially, if we keep and take care of our citizens, it is really a matter of keeping our economic base strong so people don’t move to Delaware,” Weglein said. “They don’t move to Florida or North Carolina. They don’t look and seek other pathways to get care.”

This Article was prepared by a third party for information purposes only. It is not intended to provide specific advice or recommendations for any individual.

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Ways to Repair Your Credit Score

Steps to get your credit rating back toward 720.     

We all know the value of a good credit score. We all try to maintain one. Sometimes, though, life throws us a financial curve and that score declines. What steps can we take to repair it?

Reduce your credit utilization ratio (CUR). CUR is credit industry jargon, an arcane way of referring to how much of a credit card’s debt limit a borrower has used up. Simply stated, if you have a credit card with a limit of $1,500 and you have $1,300 borrowed on it right now, the CUR for that card is 13:2, you have used up 87% of the available credit. Carrying lower balances on your credit cards tilts the CUR in your favor and promotes a better credit score.1

Review your credit reports for errors. You probably know that you are entitled to receive one free credit report per year from each of the three major U.S. credit reporting agencies – Equifax, Experian, and TransUnion. You might as well request a report from all three at once. You can do this at annualcreditreport.com (the only official website for requesting these reports). About 25% of credit reports contain mistakes. Upon review, some borrowers spot credit card fraud committed against them; some notice botched account details or identity errors. Mistakes are best noted via a letter sent certified mail with a request for a return receipt (send the agency the report, the evidence, and a letter briefly explaining the error).2

Behavior makes a difference. Credit card issuers, lenders, and credit agencies believe that payment history paints a reliable picture of future borrower behavior. Whether or not you pay off your balance in full, whether or not you routinely max out your account each month, the age of your account – these are also factors affecting that portrait. If you unfailingly pay your bills on time for a year, that is a plus for your credit score. Inconsistent payments and rejected purchases count as negatives.3

Think about getting another credit card or two. Your CUR is calculated across all your credit card accounts, in respect to your total monthly borrowing limit. So, if you have a $1,200 balance on a card with a $1,500 monthly limit and you open two more credit card accounts with $1,500 monthly limits, you will markedly lower your CUR in the process. There are potential downsides to this move – your credit card accounts will have lower average longevity, and the issuer of the new card will of course look at your credit history.1

Think twice about closing out credit cards you rarely use. When you realize that your CUR takes all the credit cards you have into account, you see why this may end up being a bad move. If you have $5,500 in consumer debt among five credit cards that all have the same debt limit, and you close out three of them accounting for $1,300 of that revolving debt, you now have $4,200 among three credit cards. In terms of CUR, you are now using a third of your available credit card balance whereas you once used a fifth.1

Beyond that, 15% of your credit score is based on the length of your credit history – how long your accounts have been open, and the pattern of use and payments per account. This represents another downside to closing out older, little used credit cards.4

If your credit history is spotty or short, you should know about the FICO XD score. A few years ago, the Fair Isaac Co. (FICO) introduced new scoring criteria for borrowers that may be creditworthy, but lack sufficient credit history to build a traditional credit score. The FICO XD score tracks cell phone payments, cable TV payments, property records, and other types of data to set a credit score, and if your XD score is 620 or better, you may be able to qualify for credit cards. Credit bureau TransUnion created CreditVision Link, a similar scoring model, in 2015.5

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – investopedia.com/terms/c/credit-utilization-rate.asp [6/28/18]
2 – creditcards.usnews.com/articles/everything-you-need-to-know-about-finding-and-fixing-credit-report-errors [9/15/17]
3 – creditcards.com/credit-card-news/behavior-scores-impact-credit.php [11/9/17]
4 – creditcards.com/credit-card-news/help/5-parts-components-fico-credit-score-6000.php [11/9/17]
5 – nytimes.com/2017/02/24/your-money/26money-adviser-credit-scores.html [2/24/17]

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Congrats, Investors! You’re Behaving Less Badly than Usual

A fair argument can be made that investor behavior is among be the most important factors in the success of an investment strategy. Please enjoy the following article written by wsj.com

Congrats, Investors! You’re Behaving Less Badly than Usual

Investors tend to buy high and sell low. But new evidence suggests that may be changing… for now

On the eternal treadmill of the financial markets, investors can’t even keep up with their own investments.

In what’s often called the behavior gap, investors underperform the investments they own, partly because they tend to buy high and sell low instead of vice versa.

New evidence suggests investors may be behaving better — but they aren’t turning into financial angels.

A study published this month by Morningstar, the investment-research firm, finds that the average mutual fund gained 5.79% annually over the 10 years ending March 31; the average investor, 5.53%. That gap of 0.26 percentage points is much narrower than in the past; over the 10 years through the end of 2013, investors lagged their investments by a horrific 2.5 percentage points annually.

What’s behind this puzzle?

Let’s imagine a fund that starts with $100 million in assets and earns a 100% return from Jan. 1 through Dec. 31. Assuming that no one added or subtracted any money along the way, $100 million at the start of the year turns into $200 million at the end.

Attracted by that spectacular 100% return, investors pour $1 billion into the fund overnight. It thus begins the New Year with $1.2 billion. This year, however, its investments fall in market value by 50%.

After gaining 100% in year one and losing 50% in year two, an investor who had bought at the beginning and held until the end without any purchases or sales would have exactly broken even. (Losing half your money after doubling it puts you back where you started.)

Such rigid buy-and-hold behavior doesn’t describe what the fund’s investors did, however. Only a fraction of them were present at the beginning to double their money, while all were around in year two to lose half their money. As a group, they gained $100 million in year one — but lost $600 million in year two.

Adjusted for the timing and amount of inflows, the typical investor lost an average of about 43% annually — in a fund that officially reported a 0% return over the same period. The investment broke even; its investors took a beating because of their own behavior.

In real life, the gap between investors and their investments is rarely that extreme. On average, trying to do better makes you do worse: It feels great to buy more when an investment has been going up, and it hurts to buy more when an asset has gone down. So you tend to raise your exposure to assets that have gotten more expensive (with lower future potential returns) and to cut it — or at least not to buy more — when they are cheaper (with higher future returns).

When you chase outperformance, you catch underperformance.

Why, then, does the new Morningstar report find that investors’ behavior seems to be improving?

The stock market itself, which has risen for most of the past decade with remarkable smoothness, deserves much of the credit.

“Extreme volatility triggers emotional responses that lead you to screw up,” says Russel Kinnel, author of the Morningstar report. With so few stabs of panic in recent years, staying invested has felt unusually easy.

Fran Kinniry, an investment strategist at Vanguard Group, says investors have increasingly favored index funds, which hold big baskets of stocks or bonds, as well as so-called target-date funds that bundle several types of assets into one portfolio. Both approaches blunt the jagged fluctuations investors would suffer in less-diversified funds that focus on narrower market segments.

More financial advisers are seeking to keep their clients’ portfolios aligned with target allocations to stocks, bonds and other assets, says Mr. Kinniry. That means they automatically sell some of whatever has recently risen in price, using the proceeds to buy some of whatever has dropped. That’s a mechanical counterweight to the natural human tendency to buy high and sell low.

When Mr. Kinnel is asked whether these changes mean that investors and their advisers won’t bail out at the bottom during the next crash, he sighs.

“No,” he says after a long pause. “Advisers and individual investors still have an inclination to chase performance, to fight the last war, to panic a bit. People are still people. They’re still going to be inclined to make the same mistakes.”

And so they are. Spooked by recent poor performance, investors are pulling out of international and emerging-market stock funds, even though those markets are significantly cheaper than the U.S. Through June 26, investors have yanked $12.4 billion out of global equity funds, according to Trim Tabs Investment Research, putting June on track for the biggest monthly outflow since October 2008.

The more investors change, the more they stay the same.

Write to Jason Zweig at intelligentinvestor@wsj.com, and follow him on Twitter at @jasonzweigwsj.

This article was prepared by a third party for information purposes only. It is not intended to provide specific advice or recommendations for any individual. It contains references to individuals or entitles that are not affiliated with Cornerstone Wealth Management, Inc. or LPL Financial.

Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

Investing in mutual funds involves risk, including possible loss of principal.

Asset allocation and diversification do not ensure a profit or protect against a loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.

An investment in a target date fund is not guaranteed at any time, including on or after the target date, the approximate date when an investor in the fund would retire and leave the workforce. Target date funds gradually shift their emphasis from more aggressive investments to more conservative one based on the target date.

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.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

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The Rise of the Older, Single Female Home Buyer

The Rise of the Older, Single Female Home Buyer

Unmarried women over 55 is one of the largest, and fastest-growing, demographics of home buyers. With longer lifespans and careers, many look for homes with ‘no bad memories’

Leah Hoffman was looking for a house to start the next phase of her life. She doesn’t need a lot of space, and being single, she only needs to please herself. She says she found exactly what she was looking for in a $1.7 million home in Paradise Valley, Ariz., which she moved into in January.

The life phase Ms. Hoffman is starting? She is 60 and divorced, with grown children. She sold a wealth-management firm she founded in 2007 and is now ready for something new. “I’m totally starting from scratch,” she says. “I like change.”

Since 1981, single women over 55 have been the fastest-growing demographic of home buyers when compared with a multitude of other categories, according to an analysis of U.S. Census Bureau data by Ralph McLaughlin, founder and chief economist at Veritas Urbis Economics in Alameda, Calif. Married couples are by far the largest group of home buyers, and single women the next largest group. But last year, single, older women made up 8.2% of all home buyers, roughly double the percentage of 20 years ago, Mr. McLaughlin says. These women also buy homes at nearly twice the rate as their male counterparts.

Three Single Women, Three New Homes

There have long been many more older single women than men, reflecting the fact that men remarry at a higher rate after a divorce, as well as the fact that men generally die at younger ages. But the dramatic increase in home purchasing by older women speaks to something else. Many women in this place in life want to own a home of their own, says Jessica Lautz, director of demographics and behavioral insight for the National Association of Realtors. Ms. Lautz also notes that longer average lifespans—and people working until later in life—are giving older buyers the confidence to take on a 15- or 30-year mortgage.

 

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Long-Term-Care Insurance Isn’t Dead. It’s Now an Estate-Planning Tool

Last year, after finishing with college tuition for their three children, Jessica Galligan Goldsmith and her husband, James, treated themselves to something she had long wanted: long-term-care insurance.

It hasn’t been cheap. The couple, both lawyers in their mid-50s, will shell out more than $320,000 between them over a decade. For that, they will be able to tap into benefits topping $1 million apiece by the time they are in their 80s, the age when many Americans suffer from dementia or other illnesses that require full-time care.

Plus, the policies pay out death benefits if long-term care isn’t ultimately needed, and most provide 10% to 20% of the original death benefit even if the long-term-care proceeds are fully tapped.

Such policies that combine long-term-care coverage with a potential life-insurance benefit are called “hybrids,” and they are reshaping the long-term-care niche of the U.S. insurance industry just as it had appeared headed for obsolescence, financial advisers say. The Goldsmiths were among 260,000 purchasers last year nationwide of these hybrids, according to industry-funded research firm LIMRA, far outpacing the 66,000 traditional long-term-care policies sold in 2017.

When long-term-care insurance took off in the 1990s, insurers aimed for the broad middle class of America. The pitch was that policies would save ordinary families from entirely draining their savings, leaning on children or enrolling in the federal-state Medicaid program for the poor. (Medicare pays for nursing-home stays only in limited circumstances.)

Now, many insurers are finding their best sales opportunity with wealthy Americans. Many of these people may be able to afford costly care later in their lives, but they are buying the contracts to protect large estates, advisers say. ​​

Ms. Goldsmith wanted long-term-care coverage partly because her legal specialty is trusts and estates and she has seen families whose seven-figure investment portfolios were devastated by years of care for spouses.

“What felt like a good nest egg” can be hit by “astronomical expenses,” says Ms. Goldsmith, of Westchester County outside New York City. Their policies are from a unit of Nationwide Mutual Insurance Co.

According to federal-government projections, about a quarter of Americans turning 65 between 2015 and 2019 will need up to two years of long-term care. Twelve percent will need two to five years, and 14% will need more than five years. At $15 an hour, around-the-clock aides run $131,400 a year, while private rooms in nursing homes top $100,000 in many places.

Hybrids can cost even more than traditional standalone products because they typically include extra features. There is wide variation across the hybrid category and the type the Goldsmiths bought (known as “asset-based long-term-care”) includes a particularly valuable feature: a guarantee that premium rates won’t increase.

Traditional long-term care policies fell from favor in the mid-2000s after many insurers obtained approval from state regulators for steep rate increases—some totaling more than 100%—due to serious pricing errors. In May, Massachusetts Mutual Life Insurance Co. began applying for average increases of about 77% that would apply to about 54,000 of its 72,000 LTC policyholders. Until this move, MassMutual hadn’t previously asked longtime policyholders to kick in more to better cover expected payouts.

Affluent buyers also can afford to pay for their hybrid policies within 10 years, as many insurers require. However at least one big carrier, Lincoln National Corp. , has begun allowing people in their 40s and early 50s to spread payments over more years, provided they fully pay by age 65.

Besides the death benefit—which is as much as $432,000 on a combined basis for the Goldsmiths—hybrids also include a “return of premium” feature. This allows buyers to recoup much of their money if they want out of the transaction, albeit without interest.

“We call these ‘live, die, change your mind’ policies,” says Natalie Karp, the Goldsmiths’ agent and co-founder of Karp Loshak LTC Insurance Solutions, a brokerage in Roslyn, N.Y.

About a dozen insurers still offer traditional long-term-care policies that typically lack those features. They charge more and provide shorter benefit periods than they did in the past. But Tim Cope, a financial adviser in South Burlington, Vt., for insurance brokerage NFP, says the good news is that “policies continue to pay for much-needed care, and changes in their policy design, pricing and underwriting are an effort to minimize premium increases on recently issued and new policies.”

Many advisers favor standalone and hybrid offerings of three of the nation’s largest and financially strongest insurers: MassMutual, New York Life Insurance Co. and Northwestern Mutual Life Insurance Co.

Ms. Goldsmith says she was attracted to the Nationwide hybrid because it doesn’t require submission of receipts to obtain the long-term-care proceeds. Benefits are payable in cash when a physician certifies a severe cognitive impairment or inability to perform basic activities, such as bathing, eating and dressing. Payments are capped at specified monthly amounts. For the Goldsmiths, the monthly benefit starts at $9,000 per spouse and grows with an inflation adjustment to more than $15,000 in their 80s.

“Receipts are very hard for older people to deal with, especially when stressed by caring for a disabled spouse or being disabled themselves,” Ms. Goldsmith says.

This article was prepared by a third party for information purposes only. It is not intended to provide specific advice or recommendations for any individual. It contains references to individuals or entities that are not affiliated with Cornerstone Wealth Management, Inc. or LPL Financial.
All illustrations are hypothetical and are not representative of any specific investment.

Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions and the policy holder should review their contract carefully before purchasing. Guarantees are based on the claims paying ability of the issuing insurance company.
If you need more information or would like personal advice you should consult an insurance professional.

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Is It Time to Stop Procrastinating About Your Financial Plan?

Some things to think about as you get started with your strategy.

First, look at your expenses and your debt. Review your core living expenses (such as a mortgage payment, car payment, etc.). Can any core expenses be reduced? Investing aside, you position yourself to gain ground financially when income rises, debt shrinks, and expenses decrease or stabilize.

Maybe you should pay your debt first, maybe not. Some debt is “good” debt. A debt might be “good” if it brings you income. Credit card debt is generally deemed “bad” debt.

If you’ll be carrying a debt for a while, put it to a test. Weigh the interest rate on that specific debt against your potential income growth rate and your potential investment returns over the term of the debt.

Of course, paying off debts, paying down balances, and restricting new debt all works toward improving your FICO score, another tool you can use in pursuit of financial freedom (we’re talking “good” debts).1

Implement or refine an investment strategy. You’re not going to retire solely on the elective deferrals from your paycheck; you’re to going retire (potentially) on the interest that those accumulated assets earn over time, assisted by the power of compounding.

Manage the money you make. If you simply accumulate unmanaged assets, you have money just sitting there that may be exposed to risk – inflation risk, market risk, even legal risks. Don’t forget taxes. The greater your wealth, the more long-range potential you have to accomplish some profound things – provided your wealth is directed.

If you want to build more wealth this year or in future years, don’t go without a risk management strategy that might be instrumental in helping you retain it. Your after-tax return matters. Risk management should be part of your overall financial picture.

Request professional guidance. A considerate financial professional should educate you about the principles of wealth building. You can draw on that professional knowledge and guidance this year – and for years to come.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – experian.com/blogs/ask-experian/credit-education/improving-credit/improve-credit-score/ [5/30/18]

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The Stock-Market Price Can Be Wrong. Very Wrong.

Researchers have caught investors in the act of wildly—and unnecessarily–overpaying for a stock

If you could buy the same stock in two different ways, one of which cost up to nine times as much as the other, you would pick the cheaper way.

Wouldn’t you?

Perhaps you shouldn’t be too sure.

In a new study, finance researchers have caught investors in the act of wildly — and unnecessarily — overpaying for a stock. In effect, investors paid as much as $9.07 for shares that they could have bought at the exact same time for $1 instead. That casts some doubt on the idea that financial markets are efficient. It should cast more doubt on whether all investors, including you and me, are as shrewd as we think.

The study is based on a peculiar transaction that occurred on the Euronext stock exchange in Amsterdam in 2014. That October, Dutch engineering-services firm Royal Imtech NV was struggling to survive. To raise capital, Royal Imtech announced a rights offering, enabling investors to buy new shares at a discount to the market price.

The rights offering worked like this: For each share they owned, stockholders who subscribed to the offering got the right to buy another 131 shares at only 0.01 euro apiece.

Yet, during the offering period, Royal Imtech stock closed as high as 0.1 euro per share. By purchasing shares on the market instead of buying them through the rights offering, investors were paying up to nine times more than they needed to. (Even if you didn’t already own the stock, you could obtain rights by buying them on the exchange from a Royal Imtech investor.)

Rights offerings are rare among operating companies in the U.S., with none since the beginning of 2017 and a total of only 11 since 2009, according to Dealogic. They are less unusual among closed-end funds in the U.S. and more common in Europe.

Shareholders often fail to participate in rights offerings, presumably because stocks are much more familiar and it takes a little effort to figure out what rights are worth.

As a result, many investors seem to have overlooked the Royal Imtech deal entirely; 48% of the rights offering went unsold, according to Martijn van den Assem, a finance professor at Vrije Universiteit Amsterdam and co-author of the study. Investors kept buying the stock the same way they always had, oblivious to the opportunity the rights gave them to buy it at a fraction of the market price.

That turned out to be costly; by late October 2014, investors who had paid up to 0.1 euro per share were left with stock trading at only 0.017 euro. Royal Imtech declared bankruptcy in 2015.

“If people avoid the unfamiliar and the uncommon and they aren’t perfectly attentive,” says Prof. van den Assem, then what happened with the Royal Imtech offering “isn’t super-puzzling.”

So are investors stupid or irrational? Neither: We are human. We have many demands on our time and attention, we hate thinking harder than we need to, and we chronically take mental shortcuts and leap to conclusions. A slightly more complicated way to buy a stock feels like a worse way. So we don’t bother with it.

Royal Imtech is only the latest violation of what economists call “the law of one price,” which holds that identical assets shouldn’t trade simultaneously at different prices, regardless of where they change hands.

In 1999, for example, 3Com Corp. spun off Palm Inc. You could buy Palm shares directly in the open market, or you could buy them indirectly by purchasing 3Com stock. For each share of 3Com, you would get 1.5 shares of Palm.

Yet on the offering date, you could get one share of 3Com for $82, with 1.5 shares of Palm thrown in for free — at the very same time as other investors were willing to pay $95 for a single share of Palm. (The risk that the deal might not have gone through, and the costs of betting against it, might explain part of the oddity.)

Likewise, in the roaring stock market that preceded the great crash of 1929, it was common for closed-end funds to trade for double or even triple the per-share value of the stocks and bonds they held. Investors acted as if such leading stocks as Radio Corp. of America, Studebaker Corp. and Wright Aeronautical Corp. were worth two or three times as much inside a fund than outside it — on the illusory belief that skilled stock pickers could make diversification and high returns easier to achieve than investors could on their own.

All this is a reminder that market prices are shaped by the tension between sophisticated, informed and attentive investors, on the one hand, and naive, unknowing and uninterested investors on the other.

The same mechanism that overpriced Royal Imtech by nine-fold also fostered the internet-stock bubble that burst in 2000 and the crisis that nearly destroyed the global financial system a decade ago.

Markets are mostly efficient most of the time. They aren’t perfectly efficient all the time.

This article was prepared by a third party for information purposes only. It is not intended to provide specific advice or recommendations for any individual. It contains references to individuals or entities that are not affiliated with Cornerstone Wealth Management, Inc. or LPL Financial.

Past Performance is no guarantee of future results.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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For the Elderly Who Are Lonely, Robots Offer Companionship

Ironic that the people who might use high tech the least are the folks who can greatly benefit from it. Below is a recent article that moves the classic discussion of elder care into a hard-to-solve area: Engagement.

For the Elderly Who Are Lonely, Robots Offer Companionship

Researchers are testing whether digital assistants can help older people stay healthy

Courtesy of ‘Robots and Chatbots Look After the Elderly.’

Twice a day a little robot in Rayfield Byrd’s living room lights up and asks him a very personal question: “Have you taken your medication?” For the past few weeks, Mr. Byrd, a 67-year-old retired transit worker who lives alone in Oakland, Calif., has been able to proudly answer “yes.”

The portable robot’s name is Mabu, and at the recommendation of his health-care provider, she now lives with Mr. Byrd to help monitor his irregular heartbeat. She checks in on him two or three times a day to make sure he weighs himself, takes his medication and exercises regularly—and relays information back to his health team.

“She’s my little blue-eyed girlfriend,” he says. “She keeps me on my toes.”

Avoiding the ER

With the senior-citizen population expected to nearly double to 88 million by 2050 and some nursing programs stretched thin, researchers and elder-care centers are exploring the potential of digital companions, in robot or chatbot form, to help the elderly. Digital assistants like Mabu and others are being developed to do everything from monitor chronic health conditions to encourage patients to stay active and engaged—with the overall goal being to find ways to meet the needs of a growing elderly population without overburdening the health system.

While the idea of bringing automation to elder care has been discussed for years, recent technological advances in natural-language processing have moved it closer to reality, says Dor Skuler, the founder of the firm behind ElliQ, a robot that encourages the elderly to stay active and connected to loved ones. Before such advances, people had to speak to digital assistants in specific formulaic commands, making the technology difficult and frustrating to use, especially for seniors.

Already, digital assistants have allowed some health systems to cut back on nurse home visits and prevent unnecessary trips to the emergency room.

Element Care , an elder-care program in Boston, last year began dispatching digital avatars, instead of nurses, to help some patients manage their chronic conditions at home. The technology, from Care.coach Corp. , uses an animal avatar on a tablet to remind patients to take their medications and follow their treatment plans. About 70% of what is spoken by the avatar is written out by human specialists working behind the scenes, says Care.coach Chief Executive Victor Wang, while the other 30% is generated via artificial intelligence.

Kendra Seavey, Element Care’s clinical administrative manager, estimates that the center has saved $150,000 in emergency-room costs by assigning Care.coach avatars to patients who make the most frequent hospital trips. Sometimes, the avatars guide patients through breathing exercises to calm them down; other times, just giving patients an ear to talk to prevents them from calling 911.

“We have individuals who just get anxious and want to go to the hospital or are lonely and want to go to the hospital,” she says. “There’s no need for them to go there.”

Alleviating loneliness

Indeed, loneliness is one of the key problems researchers and companies are trying to solve with digital companions. Loneliness is a significant predictor of poor health, and it is widespread, affecting more than one-third of older adults in the U.S., according to a 2010 AARP study.

“Robots that help people connect with and maintain their relationships with others are becoming increasingly important,” says Timothy Bickmore, a professor at Northeastern University who is developing a digital assistant to help the elderly navigate the final stages of life.

While older people aren’t usually early adopters of new technologies, seniors who lack companionship tend to be receptive to having automated friends, says Maja Mataric, a professor of computer science and neuroscience at the University of Southern California. “In many cases their friends have died, no one cares to spend time with them, and the grandkids think they smell funny,” she says. “So when they actually have someone or something that’s interested in them, they are willing to explore it.”

Ms. Mataric, who has studied using robots to improve the attention spans of dementia patients, says robots give patients the illusion of having a physical companion, and the elderly often interact with them in surprising ways, such as by petting them and asking how they are feeling.

Programming robots and chatbots to act as friends is simpler than it might seem, developers say. ElliQ, now in beta testing, turns to face users when they are talking, to show attentiveness, and bounces with excitement when a message arrives from a loved one. Mabu, from Catalia Health Inc., uses eye contact to show it is listening to users.

“It isn’t actually very hard to project empathy,” Ms. Mataric says. “Empathy is what you do, not what you feel.”

Most of today’s socially assistive technology also is designed to be cuddly and cute, defying the stiff and scary stereotype associated with robots in the past. Paro, a speechless lap-sized robot from Japan’s National Institute of Advanced Industrial Science and Technology, looks like a baby seal and is used much like a live therapy animal to soothe patients. Paro, which displays emotional reactions to touch and sound, became a certified medical device in the U.S. in 2009 and has sold roughly 5,000 units world-wide, primarily in Japanese elderly facilities.

Toy maker Hasbro Inc. and researchers at Brown University, meanwhile, have said they would use a $1 million grant from the National Science Foundation to add artificial intelligence to Hasbro’s robotic companions, which resemble cats and dogs, so that they can help the elderly with everyday tasks such as locating lost objects, in addition to providing comfort.

Real people

But even as technological advancements make empathy and companionship easier to simulate, those in the field say digital companions aren’t meant to replace the human touch.

Care.coach’s Mr. Wang says human specialists will remain an important part of his product because building a long-term supportive relationship with a patient requires an actual person.

Real people also are going to be needed to perform the harder, and dirtier, tasks associated with elder care—at least for the foreseeable future, experts say. “We aren’t developing robots who can toilet the elderly anytime soon,” says Ms. Mataric.

This article was prepared by a third party for information purposes only. LPL Tracking # 1-737700

 

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Losing Your financial nest egg is linked to shorter life expectancy

One benefit of creating a financial plan is that the process puts into perspective the importance of collecting singles and doubles in a portfolio rather than swinging for the fences.

The following article is courtesy of the Wall Street Journal. Please forward to anyone you know who is going through a life or financial transition.

Many people lost their life savings in the last recession.

New research on the health damage done.

Is it worse to suddenly lose your financial nest egg or never to have saved any money at all? This question concerns many of us: A quarter of Americans watched much or all of their life savings evaporate during the last recession, while nearly half of U.S. families have nothing put aside for retirement, according to the Economic Policy Institute and federal data.

Either way, there’s no happy answer. Both scenarios can increase our risk of dying within the next 20 years by more than 50%, a recent study shows.

We’ve long known that a financial shock causes immediate distress. Suit-clad men leaping from buildings were dismal hallmarks of the Great Depression, and soon after a major recession began in 2007, there were notable spikes in clinical depression, substance abuse and suicides.

But what about the effects of such a shock over a more extended period? “Does the stress of losing one’s wealth also create a long-term risk?” asked Lindsay Pool, a Northwestern University epidemiologist and the lead author of the new study. Published last month in the Journal of the American Medical Association, her research investigated how losing one’s life savings in the short term might curtail one’s lifespan in the long term.

​To find out, the researchers analyzed how participants in the federally funded Health and Retirement Study fared over a 20-year period. When the study began, researchers selected a nationally representative group of people in their 50s and asked these roughly 8,700 men and women detailed questions about their daily habits, health and financial situation.

Every two years, from 1994 until 2014, the federal study’s investigators called each subject looking for any change in their status and especially for a signal event: the disappearance of 75% or more of a person’s assets during the previous two years. “The reason we look at 75% or more is that we’re looking for a sudden loss, one that’s high enough to be shocking. People are nearing retirement, and all of a sudden their wealth is gone,” said Dr. Pool.

The results showed how profoundly financial loss can damage us. Exactly how this happens at the physiological level is still being worked out, but we already know that stress unleashes hormones that constrict our blood vessels and make our hearts beat faster—thus increasing blood pressure and possibly spurring a future cardiovascular event. Coping with ongoing pressures we cannot control has also been linked to a shorter lifespan.

Loss of control was front and center for the 26% of those in the survey who had endured a wealth shock. They were 50% more likely to have died during the period of the study, compared with participants whose savings remained intact. The researchers statistically controlled for other causes of mortality, such as ill health, job loss, insurance loss and marital breakdown.

Interestingly, women were more likely to have experienced a wealth shock than men, but they were not more likely to die as a result. They were, in short, more financially vulnerable but more resilient physiologically.

The study can’t explain why losing your life savings can kill you, only that it does. But one of the researchers’ findings is clear: At 50%, the mortality risk of those who had lost their nest eggs was lower than for those who never accumulated much for retirement at all; those people were 67% more likely to die than savers. It may be cold comfort, but it seems that it’s better to have saved and lost than never to have saved at all.

This article was prepared by a third party for information purposes only. It is not intended to provide specific advice or recommendations for any individual. LPL tracking # 1-736613