May 2014 Newsletter To Clients

From the desk of Ramsey Bova…
We have changed the format of the Net Worth Statement. Over the last 30 years we have received lots of feedback regarding the ‘summary’ style used to report your net worth on a monthly basis. We hope the new format will give each of you a better view of your current account positions. The report has no effect on the bottom line number. Feel free to contact me directly if you would like to discuss the report style in more detail.ramsey@moneywatchadvisors.com

Our updated 2014 Privacy Policy Notice is included with this mailing. Please do not hesitate to contact me with any questions regarding this policy.

From the desk of Bill Leffler…
As a financial planning professional I have been appointed to a committee of an organization to which I belong to oversee the investment of about $200,000. Half of the annual dividends from which are to be used to assist needing members of the organization to attend our annual meetings, with the other half of the dividends to be invested. Our objective is to increase the return on the investments and thus provide more money for the stated purpose of the fund.

The investment committee contains myself, two stockbrokers, as well as three other persons who are supposedly knowledgeable investors but who are not professionals. We confer by phone periodically in our efforts to make the most of our purpose.

At year's end, we had a bit more than $5,000 in cash remaining from the dividends we did not need to assist folks. In the discussion of what to do with this money, I discovered a most interesting difference in how I, as a member of the Moneywatch team, reacted to what to do with this cash, and how the stockbroker committee members and the non-professionals reacted.

As you know, we do not think that cash in an account is particularly productive. Thus when we see more than $1,000 sitting in one of your accounts, we prefer to use it to purchase an additional investment that will be more productive than the low interest rate that cash produces these days. We want your money to work harder for you than cash does.

In sharp contrast to such a viewpoint, the stockbrokers have determined that there should be cash in the account, just in case some sort of an investment opportunity comes along, rather, as I was told, similar to a mutual fund retaining cash for investment purposes when there is such an opportunity.

I have pointed out to them that we are not a mutual fund, but established to provide money from dividends to be used to assist those who need it and we should not be holding cash in the account. I have been voted down as a minority of one.

This experience has driven home to me the wisdom of the Moneywatch approach, that we want all clients to be as fully invested as possible so that these investments may both grow and return dividends to their fullest extent. Cash does not accomplish this end. As I see it, those who may need the assistance of our committee's efforts are being short changed by the views of the stockbrokers. But I have lost that one so far!

From the desk of Joe Bonilla…
Recent news headlines about a security bug called "Heartbleed" revealed a security vulnerability found in software called Open SSL. The software is used to keep access to websites secure. The problem was discovered by security engineers at Codenomicon and Neel Mehta of Google Security.

The Heartbleed bug allows an attacker to use messages called “heartbeats” to trick a server into passing along sensitive information from its memory. For more detailed and technical information, please view the Heartbleed bug site at this link heartbleed.com or Wikipedia entry at this link https://en.wikipedia.org/wiki/Heartbleed.

One of our top priorities at Moneywatch is helping protect our clients’ information. We recommend that you take the following additional measures for your online accounts:

1. Verify if sites you frequently visit (i.e. social media, employer, financial institution, etc.) were affected by entering the URL (i.e. www.facebook.com, www.advisorclient.com, etc.) at this link (https://filippo.io/Heartbleed/).
2. Ensure your anti-virus software is up to date.
3. For Mac/PC users, download another security tool, Trusteer Rapport (http://www.trusteer.com/ProtectYourMoney). This tool is offered free of charge by most financial institutions. It works in conjunction with your anti-virus software and web browser to alert you about fake websites and to block malware that may attempt to steal your personal information.

Even though TD Ameritrade & Moneywatch Advisors, Inc. specifically were NOT affected, many websites were affected by Heartbleed. It's a good idea to change passwords on those affected sites to help keep your information secure. Remember, use a unique password for each site, keep those passwords hidden and routinely change them.

From the desk of Lee Chapman…
The Moneywatch Advisors website will be undergoing upgrades over the next several weeks. Please excuse us while we make for a safer and up to date experience. We will have it up and going as soon as possible.

Thanks for your continuing confidence.

Past performance is no guarantee of future results. The opinions expressed are those of Moneywatch Advisors, Inc. and are no guarantee of the future performance of any particular fund. This information is for educational purposes only and is not intended as investment advice. Please consult your financial advisor for more detailed information or for advice regarding your individual situation.