SUMMER 2015

Correction 2015!

F inally, we have a meaningfulcorrection in the markets for2015. It has been nearly four

years since we have had a week bethis negative. Every time we have amarket movement up or down, thefinancial media outlets have to finda few good reasons for it. The cur-rent factors being assessed are theslowdown in China, the bottomfalling out of energy prices, and the inaction or possible action bythe FED.

First, the slowdown in Chinamay be worse than their govern-ment acknowledges. It is no secretthat economic numbers coming outof the second largest economy in the world cannot be trusted. Sec-ondly, energy prices have been verydepressed, which has benefited theaverage consumer, large and small

businesses, and municipalities.However, today we now have aworldwide oil glut. Just a few yearsago, energy was a great job creator;now the sector is shedding jobs at asignificant clip. Lastly, the FED hasseen enough weakness in the U.S.and the global economies that itappears it will postpone the eventu-al “lift off” of interest rates.

Whenever we have a correctionor bear market, we have to look atwhat caused it, how long will it last,and more importantly, how will it

Consider These Factors before Switching Jobs

W hen considering a job switch, it’s tempting to just look at the differ-ence in salary between the two positions. But before deciding

whether to change jobs, you should consider many factors, including:

4401(k) plan — 401(k) plans are becoming increasingly important tohelp fund retirement, so you should thoroughly review each plan

before making a job switch.

4Health insurance — How much of your health insurance premium doyou pay at each employer? How does the coverage compare? What

out-of-pocket expenses are you likely to incur?

4Other fringe benefits — Thoroughly compare the fringe benefit pack-age at each employer, looking at vacation days, sick days, life insur-

ance, disability insurance, dental and optical insurance.

4Commuting costs — How far is each job from your residence? Willthere be additional commuting costs involved? Will you have to spend

additional time away from your family commuting?

4Advancement opportunities — While this is difficult to quantify, whatare the advancement possibilities at each job? mmm

U C C E S S

affect individuals, families, andbusinesses. The short answer is no one knows how long a correctionwill last or what percentage it may temporarily drop. If an analystwas correct at calling the top or bottom of a market 10 years ago;there is a good chance this sameanalyst will be incorrect this timearound. Each time is different thanthe last correction.

One thing I like to look at is the history during times like this.

Continued on page 2

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Copyright © 2015. Some articles in this newsletter were prepared by Integrated Concepts, a separate, nonaffiliated business entity. Thisnewsletter intends to offer factual and up-to-date information on the subjects discussed but should not be regarded as a complete analysis ofthese subjects. Professional advisers should be consulted before implementing any options presented. No party assumes liability for any lossor damage resulting from errors or omissions or reliance on or use of this material.

Andrew D. Wade, CFP®

President

Nebel Financial Services, LLC

6926-F Little River Tnpk., Annandale, VA 22003703-658-0080 • Fax: 703-658-0097

awade@sterneagee.com

Financial Solutions for the Life You Are Living

and the One You Want to Live

Securities Offered Through Sterne Agee Financial Services, Inc., Member FINRA/SIPC. Investment advisory services

offered through Sterne Agee Asset Management, Inc.

Office Hours: 8 AM to 4 PMMonday through Friday

Evenings/Weekends byAppointment Only

A healthy market correction can be a10–20% drop in market value. Eachtime we have had this situation, wehave looked back at it as an oppor-tunity. This time is no different.Keep in mind that bond marketshave held up pretty well during thismost recent down period, and somemunicipal bond funds are up duringstock market corrections.

Yes, I see the global economypulling back, but just like all of theother corrections, we will recoverfrom this one, too. As history willshow, corrections actually recoverquicker than you’d think. Accord-ing to the article, “Here’s What Usually Happens to Markets Afterthe S&P 500 Drops Five Percent in aWeek,”* the S&P 500 recovers 71%of the time within three monthsfrom corrections such as the one we are in.

We are always looking for valueopportunities, and we are definitelyat a better value than just a fewweeks or months ago. As the oldsaying goes, “Buy low, sell high.” Sothis may be a good time to fundadditional dollars into your IRA,401(k), or 529 plans. If these plansare fully funded, consider adding to or starting an investment outsideof your qualified plans.

* Verhage, J. Bloomberg.com. August 24,

2015.

CorrectionContinued from page 1

Bond Investing Tips

C onsider the following tips if bonds are part of yourinvestment portfolio:

4Determine your objectivesbefore investing. Decide

how much of your portfolio youwant invested in bonds.

4Diversify your bond hold-ings among different bond

types. Consider government, cor-porate, and municipal bonds, aswell as different industries, creditratings, and maturities.

4Understand the risks thataffect bonds. The most signif-

icant risk is interest rate risk.When interest rates rise, bond values fall, while values rise wheninterest rates decline. Other risksinclude default risk, or the possi-bility the issuer will redeem thebond before maturity; and inflationrisk, or the possibility that inflationwill outpace the bond’s return.

4Choose bond maturity datescarefully. When you’ll need

your principal is a major factor, but the current interest rate envi-ronment may also affect your deci-sion. Rather than investing in onematurity, you may want to staggeror ladder the maturity dates inyour portfolio.

4Follow interest rate trends.At a minimum, follow the

prime rate, Treasury bill rates, andTreasury bond rates. Understandthe significance of the yield curveand track its pattern over time. Bymonitoring current interest ratelevels, you will be able to evaluatethe appropriateness of an interestrate for a specific security.

4Compare interest rates forspecific bonds before invest-

ing. Interest rates can vary sub-stantially among different bondtypes and among bonds with dif-ferent maturities or credit ratings.

4Research a bond before purchase. Review the credit

quality, coupon rate, call provi-sions, and other significant factors.Determine whether the bond isappropriate for you in terms ofrisk, return, and maturity date.

4Consider the tax aspects.By comparing the after-tax

rate of return for various types ofbonds, you may be able to increaseyour return. Depending on thebond, the interest income may befully taxable or exempt from feder-al and/or state income taxes.

4Review your bond holdingsperiodically. Evaluate the

credit ratings of all your bonds atleast annually to ensure the qualityhasn’t deteriorated. Also, ensureyour holdings are still consistentwith your overall investmentobjectives and asset allocationplan.

4Call for assistance with yourbond holdings. You should

use carefully designed strategies tomake bond decisions. Please call ifyou need help. mmm

Sincerely,

Andrew D. Wade, CFP®

President

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coffee drink? Cut the habit (or, ifthat’s too hard, limit it to two orthree times a week). Set aside themoney you would have spent in ajar and watch your savings grow.

4Repair, don’t replace: It’s easyto toss a slightly worn or dam-

aged item and buy a new one toreplace it. But many of the items wethrow out can actually be repaired.Find a skilled shoe repair person,quality tailor, experienced uphol-sterer and furniture repair person,and other professionals to spruceup items that need a bit of repair.By purchasing quality items andtaking good care of them, you’lllikely save yourself money in theend.

4Use coupons: Clippingcoupons may seem distinctly

old-school. Fortunately, you cannow take advantage of coupon savings without having to spend an entire Sunday morning sortingthrough newspaper inserts. Whenshopping online, always do a quicksearch for online promo codes andcoupons before hitting buy. Or signup for your favorite grocery store’srewards program and enjoy seam-less savings.

4Review your insurance pre-miums: Raising deductibles or

bundling policies could save youmoney. Also, make sure you actual-ly need the insurance you have —cell phone insurance and warrantiesare often a waste of money. Finally,make sure you’re getting all the discounts you qualify for, like carinsurance premium reductions forbeing a safe driver or homeownersinsurance discounts for having analarm system.

Looking for more ways to boostthe amount of money you save?Please call for help analyzing yourbudget and identifying ways to cutyour expenses and save more ofwhat you earn. mmm

10 Ways to Boost Your Savings

B y embracing some simplelifestyle changes or takingfull advantage of tax perks

and other savings incentives, youcan easily boost the amount of cashyou save. The result? You’ll be morefinancially secure and better able toreach the goals you have for your-self and your family. Here are someideas to get you started.

4Take advantage of savingsperks: If you contribute pre-

tax earnings to a 401(k) plan or IRA,you’re saving money beyond youractual contribution amounts. Sayyour monthly gross pay is $5,000per month. You currently don’t con-tribute to a 401(k) plan. You decideto start saving 3% each month (or$150) in your employer’s 401(k)plan. This $150 comes out of yourpaycheck pretax, which means thateven though you’re saving $150,your paycheck only shrinks by $112 — in other words, you’vesaved $38 a month on taxes, or$456/year. Another way to save?Make sure you’re contributingenough to get your employermatch, since this is a great way toincrease your savings without actu-ally shrinking your take-home pay.

4Get your benefits: Youremployer may offer benefits

beyond a 401(k) plan that couldsave you money. Flexible spendingaccounts are common benefits that allow you to set aside pretaxincome for out-of-pocket medicalexpenses. Some employers even

offer discounts on gym member-ships or other services. Take themoney you save by participating in these programs and use it toboost your retirement or emergencysavings.

4Cut recurring expenses:Monthly subscription plans,

streaming entertainment services,gym memberships you don’t use —these regular costs can add up.While some may be worthwhile,trimming the fat in the area ofrecurring expenses can help yousave more. For example, take yourcell phone bill. Could switching to adifferent plan save you money? Doyou need the premium cable pack-age? How often to you listen tosatellite radio? Keep what you actu-ally use and drop the things youdon’t use.

4Buy generic: Do you alwaysbuy the name-brand version

of a product? If so, you might bewasting money. In many cases, thegeneric version is just as good — ifnot identical to — the pricey, brand-ed version. Take it from the experts:a recent survey found that chefsfavor generic versions of bakingmixes, sugar, and tea; while doctorswere happy with generic versions of over-the-counters medicines likeaspirin and ibuprofen.

4Make it automatic: Not surewhere your money goes each

month? Automate your savings soyou don’t have to think about set-ting aside extra cash. Chances areyou won’t even miss that money.

4Be generous: If you itemizeyour taxes, make sure you’re

keeping track of all charitable dona-tions — from checks you write tothe value of that box of gently used clothes you just dropped off at Goodwill. You can deduct thecontributions you made to eligiblecharities come tax time, allowingyou to save (or give) a bit more.

4Cut one habit: Do you indulgein daily soda or an expensive

Life Insurance Tips

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Distributing Your Estate to Grown Children

4Don’t rely on rules of thumbwhen deciding how much life

insurance you need. Go through adetailed analysis of your needs.

4Evaluate who should own theinsurance policy, which deter-

mines whether the proceeds will besubject to estate taxes.

4Select beneficiaries with care,being sure to name contingent

or back-up beneficiaries.

4Before deciding on a specifictype of life insurance policy,

review all available options.

4Look for ways to reduce premi-ums by meeting certain criteria.

4Don’t purchase cash-valueinsurance unless you plan to

own the policy for at least 10 years.

4Check the financial rating ofyour insurance company peri-

odically to make sure its financialstatus has not weakened.

4Don’t replace an existing lifeinsurance policy without first

evaluating the consequences of surrendering the policy.

4Review your life insurancepolices every couple of years.

This review gives you a chance toevaluate the policy’s performanceand whether your needs and/or circumstances have changed. mmm

E ven though your childrenmay now be grown, they areprobably still the center of

your estate plan. Just because theyare adults doesn’t mean you haveto leave their entire inheritance tothem outright. Consider these factors first:

4Do you want to distributeyour estate gradually? If sub-

stantial assets are involved, youmay want to set up trusts to distrib-ute your assets gradually, such as inthirds when each child reaches age25, 30, and 35. You can always givethe trustee power to make early distributions for specific items.

4Have you selected a trusteecarefully? If trusts are

involved, you want a trustee who is impartial and will deal fairly with all your children. Think twicebefore naming one of your childrenas trustee. One sibling in a positionto decide what happens to othersiblings’ inheritances can cause dis-agreements among siblings.

4Have you thought about theconsequences of a child

divorcing? You probably don’twant a portion of your assets dis-tributed to an ex-daughter-in-law orex-son-in-law, so special provisionsmay need to be added to trusts.

4Have you considered howassets will be distributed

among children? Perhaps one childis better off financially than yourother children. Do you divide yourestate equally or give less to thefinancially well-off child? Childrenoften feel a right to an equal shareof their parents’ estate, even if theyhave a substantial estate of theirown.

4Do you need to make specialdistributions to even out

inheritances? Perhaps you havepaid all college costs for some chil-dren, while other children have notattended college yet. You may wantto ensure that all children receive acollege education, and then distrib-ute the rest of your estate equally.

4Should you coordinate yourestate plan with your chil-

dren’s estate plans? If your chil-dren have substantial estates of theirown, it may not make sense to leaveadditional assets to them. Theymay prefer those assets go directlyto their children, helping to mini-mize family estate taxes.

4Have you explained the needfor estate planning to your

children? Especially if you are leav-ing a substantial estate to your chil-dren, they may need to plan theirown estates. You don’t need to dic-tate what they should do with theirestates, but gently remind them whythey need an estate plan. mmm