401(k) concerns return - again

Published: Wednesday, August 31, 2011 @ 5:31 PM
Updated: Wednesday, August 31, 2011 @ 5:31 PM

Worried what the political wrangling over federal debt might do to the stock market, Raymond Byrne decided last month to shift around his retirement savings. What had been in stock funds, he transferred to debt securities.

Last week, after President Barack Obama signed the last-minute debt deal, Byrne considered moving some money back to stocks. But, out of an abundance of caution, he decided to wait for some fresh data on the economy.

That hesitation saved him from Thursday's 513-point drop of the stock market, its worst one-day plunge since late 2008.

"I'm counting my blessings, " said the retired federal investigator, who is now a partner in a furniture and garden decor shop in Avondale Estates.

Byrne was luckier than most folks.

After steadily falling during the two weeks Republican and Democratic lawmakers were at an impasse, the stock market tumbled amid growing worries over the slowing economy. Friday, the Dow Jones Industrial Average ended up about 60 points to close at 11,444, capping a week in which the stock index fell almost 700 points, or 6 percent. And late Friday, after the markets closed, Standard & Poor's took the unprecedented step of downgrading the U.S. credit rating.

The week's events have many saying, "here we go again" and wondering what to do as they watch their 401(k) retirement savings shrink again. Do investors dump their stock mutual funds and shift to less volatile things, like cash and bonds? Do nothing? Or maybe even go bargain hunting?

About the only thing most financial experts agree on is that panicking during a plunging market is a bad idea. Most say that investors should have already set up their portfolios to weather such mishaps with the correct mix of investments to fit their needs and tolerance for risk.

The closer you are to retiring, for instance, the less stocks and other volatile investments you should have in your portfolio, because there's less time to recover from a financial setback.

"It's frustrating because you have to be putting your seat belt on before the crash, " said Dorsey Farr, an economist who advises investors at French Wolf & Farr in Buckhead. He said he tried to prepare his clients for such a decline by shifting more money to less risky fixed-income investments.

"Part of our job is telling people not to panic, " said Bill Bolen, chief investment strategist at Homrich Berg. "The worst thing you can do is buy and sell based on emotion."

He said the Atlanta-based firm, which manages $2.2 billion in assets, had already reduced its portion of U.S. stocks in most clients' portfolios. It also warned clients earlier in the year that there was "a good chance that the market might turn sour in the second half of the year, " he said.

A 35-year-old investor who is decades from retirement can simply ride out the ups and downs, he said. But for older investors, "if that roller coaster ride [last week] freaks you out, then maybe you had the wrong allocation, " he said. It might be a good idea to talk to a financial adviser to come up with a better mix of investments, he said.

Other experts think the stock markets' fall should be a wake-up call for investors to shift to less risky assets that will better withstand a potential double-dip recession.

Stock markets around the globe plunged last week after a slew of recent data pointed to a weakened manufacturing sector, high jobless claims, flat consumer spending and slower-than-expected economic growth in the United States.

Dan Geller, chief research officer at Money Anxiety Index in San Francisco, said the weak economic data was foreshadowed by his index, aimed at measuring consumers' worries about their financial well-being. That index has been rising for five months, recently hitting its highest level since the 1981 recession.

Since consumer spending accounts for about two-thirds of the economy, he thinks there's about an 80 percent chance of another recession by early next year.

"Definitely expect a lot of [stock market] volatility in the near term, " he said. "It's not going away." He's holding mostly cash in his own portfolio, he said.

Farr, likewise, has been ratcheting up the odds of a recession, but he puts it closer to 30 percent.

Still, he has been expecting a rough ride.

While many had expected the stock market to rebound after the federal debt limit deal was reached, the recent poor economic data was "too bad to ignore, " he said.

His firm, which manages $265 million in assets, has been advising clients, mostly wealthy individuals and institutional investors such as pension funds, to expect a weak economy and possible deflation --- or falling prices --- that would favor investments in bonds rather than stocks.

In that environment, he thinks many investors should be holding more bonds and junk bonds that would rise in value if interest rates drop.

He thinks European and Japanese stocks are a better value than U.S. stocks.

"Just because U.S. equities have gone nowhere for 12 years does not mean they will tend to outperform in coming years, " as some might expect, he said. "Losing a decade is very costly. You don't want to do it more than once in a lifetime."

But some investment managers, even if they're sitting on their hands now, may go bargain-hunting if the U.S. stock market drops further.

"We're generally not that excited about stocks over the next few years, " said Bolen, but a bigger decline --- and cheaper stocks --- might change his mind.

"We are long-term investors, " he said.

Numbers don’t lie: 5 things to know about your FICO score

Published: Tuesday, October 03, 2017 @ 10:37 AM
Updated: Tuesday, October 03, 2017 @ 10:37 AM

To get into the all-important "good credit" score range, experts recommend these five strategies Check and re-check your credit report Avoid quick-fix promises Delinquent payments can seriously damage your FICO scores Pay off more of what you owe Apply for credit cards one at a time

With the 2017 hacking of credit bureau Equifax, credit scores have been in the spotlight recently. But credit scores are important every day for adults who earn or borrow money, especially the FICO score, which is used by 90 of the top 100 largest U.S. financial institutions. 

RELATED: Equifax data breach: What to know

Just what is a FICO score? The short answer: the global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries, created by Fair Isaac Corporation. The average adult has FICO scores from each of the three main credit bureaus: Equifax, TransUnion and Experian. FICO scores are based on amounts owed (30 percent), new credit (10 percent), length of credit history (15 percent), payment history (35 percent) and credit mix (10 percent).

A low FICO score might contribute to a lender's decision to deny you credit and could increase the cost of an auto loan by almost $5,000, according to Consumer Reports. A high FICO can save you thousands annually on everything from reduced credit card interest to the size of the deposit you must pay for electric utility service.

RELATED: Uber isn't everything: 7 other lucrative part-time side gigs 

To get into the all-important "good credit" score range, Consumer Reports and myFICO.com recommend these five strategies:

Atlanta-based consumer credit reporting agency Equifax reversed a decision to include forced arbitration language in its terms of service for its free credit monitoring products after a public outcry earlier this month. The company said a breach of its computer systems had exposed the Social Security numbers and birthdates of up to 143 million U.S. consumers. (Dreamstime/TNS)(The Atlanta Journal-Constitution)

Check and re-check your credit report

Request one free credit report from a different reporting agency every four months through AnnualCreditReport.com and check for errors, according to Consumer Reports. If you find an error, dispute it with the credit bureau. Pay particular attention to make sure no one has incorrectly listed a late payment on any of your accounts or miscalculated amounts owed on any open accounts. "Hard pull" credit inquiries, which are made by potential lenders with your permission, can lower your FICO score slightly, but this is different. When you check on your own credit, there's no penalty. 

Avoid quick-fix promises

According to myFICO.com, so-called "quick fix" efforts to repair your credit history are the most likely to backfire, so consumers should be leery of any advertisements or credit counselors claiming they can improve your credit score fast. Depending on the reason for a low score, you may need 12 to 24 months before any efforts (except for error corrections) start showing on your score. You can accelerate the improvement by enrolling in a debt-management program and making payments on time, but there's no instant fix.

(Contributed by nestiny.com/For the AJC)

Persistently pay your bills on time

Even if you are only missing payments by a few days, delinquent payments can seriously damage your FICO scores, particularly since you can't fix previous missed or late payments. If you have missed payments, get current and stay current so you can demonstrate that the problem is in the past. Accoding to myFICO, older credit problems count for less and will fade as your new on-time payment pattern starts showing up on your credit report. Some older versions of FICO keep collection accounts on your credit report for up to seven years even if they're paid off, but the most current versions of FICO ignore any collections when the balance is zero, according to Consumer Reports.

Pay off more of what you owe

The "amounts owed" category makes up 30 percent to your FICO score calculation. Unlike payment history, you can address it immediately, but you'll need financial discipline: "The most effective way to improve your credit scores in this area is by paying down your revolving–credit card–debt." Don't close unused credit cards as a short-term plan to up your scores, since it may just increase the percentage of available credit you are using - a no-no for high credit scores. The same goes for opening a new credit cards you don't need: while it will increase your available credit, it could negatively impact the average age of your credit accounts and damage your FICO scores.

Apply for credit cards one at a time

When you apply for multiple credit cards at the same time, you generate several "hard pull" requests for your credit history, which can hurt your FICO score, according to Consumer Reports. This advice only holds true for credit cards, not house, car or student loans. 

MyFICO also reminds consumers that while FICO scores are important, they're not the be-all and end-all. Lenders look at information such as the amount of debt you can reasonably handle given your income, your employment history and your credit history. Based on their perception of this information, as well as their specific underwriting policies, lenders may extend credit to you even if your score is low - or decline your request for credit even though your score is high.

To get started improving your FICO score, access myFICO's estimator tool, which helps you approximate your score range without any identifying information. It also offers a direct link that allows you to file an online credit report dispute and gives more detailed answers to the question "What is FICO?"

Scene 75 CEO buys former ITT property

Published: Tuesday, September 26, 2017 @ 2:34 PM

Jonah Sandler is the CEO of Scene 75 Entertainment Center. LISA POWELL / STAFF
Jonah Sandler is the CEO of Scene 75 Entertainment Center. LISA POWELL / STAFF

A holding company run by the chief executive of Scene 75 Entertainment has bought the nearby former ITT Tech school property on Stop Eight Road.

JDS Commercial Holdings LLC — of which Jonah D. Sandler is the principal — bought the former school property at 3325 Stop Eight Road for $740,000, Montgomery County property records show.

RELATEDMental health agency plans $1 million property investment

Five years ago, Sandler opened Scene 75 at 6196 Poe Ave. Since then, he has announced plans to open a third entertainment location 30 miles south of Cleveland in Brunswick, Ohio. Besides the Dayton center, the company also has a 84,000-square-foot Cincinnati-area venue in Milford.

The former school — which closed last September — is just south of Scene 75 on Poe, near the intersection of Poe and Stop Eight.

RELATEDBuyer pays $4.3M for property near airport

Last year, ITT Technical Institute closed all 130 of its campuses nationally in a move that put 8,000 employees out of work, in the wake of federal sanctions against the school.

A message seeking comment was left with Sandler Tuesday.

Eastway plans total $1M property investment

Published: Tuesday, September 26, 2017 @ 8:26 AM

A model of the newly remodeled Eastway Behavioral Healthcare headquarters on Wayne Avenue. The agency is purchasing a former print shop on Bainbridge near the headquarters. In total, the agency is investing $1 million into both its headquarters remodeling and the property purchase. THOMAS GNAU/STAFF
A model of the newly remodeled Eastway Behavioral Healthcare headquarters on Wayne Avenue. The agency is purchasing a former print shop on Bainbridge near the headquarters. In total, the agency is investing $1 million into both its headquarters remodeling and the property purchase. THOMAS GNAU/STAFF

Eastway Behavioral Healthcare, a mental health services agency, is purchasing an industrial building and parking lot across Bainbridge Street near its Dayton headquarters, with plans to create a center for job training there, agency leaders announced Monday evening.

Dayton-based Eastway Behavioral Healthcare has already announced an investment of about $500,000 into remaking its 600 Wayne Ave. headquarters and pharmacy — and agency leaders announced their plans for the Bainbridge property Monday at a 60th anniversary celebration at the Victoria Theatre.

Together, the refurbishing of the headquarters and the purchase of the Bainbridge property amount to a total investment of about $1 million, Eastway officers said.

RELATEDDayton mental health agency has national impact

Krystal Burke, Eastway director of business development, said she recently approached the owner of the property about the possibility of leasing some of his parking spaces to Eastway. Instead, he offered to sell the entire site, including the building where a printing and packing business had been located for decades, Burke said.

The business was Print Products Inc., 419 Bainbridge.

“It’s a very attractive building on the inside,” Burke said. “There were a lot of upgrades.”

RELATEDMental health agency to make $5ooK headquarters investment

She added: “I told John (Strahm, Eastway president and chief executive), ‘Just hear me out. I think I stumbled on a really great opportunity.’”

One of Ohio’s largest mental health care agencies, Eastway in recent months has expanded its service footprint to include Columbus and Washington Court House, even serving clients nationally from as far away as Idaho.

“Our message to the Dayton community, although we have expanded our catchment areas to Columbus … our primary commitment for 60 years has been serving the needs of these people in Dayton.”

In the past decade, the agency’s revenue has nearly doubled, from $16 million annually in 2007 to an expected $30 million in this fiscal year, Eastway leaders said.

“It’s planned growth,” Burke said. “It’s not just to see how big or how fast we can grow.”

Each year, the agency treat 3,500 adults in Dayton. The agency manages 24 facilities across mostly Southern and Central Ohio.

Jury trial scheduled in Reynolds lawsuit

Published: Thursday, August 31, 2017 @ 9:29 AM

Kettering-based Reynolds and Reynolds has about 1,300 local employees. TY GREENLEES / STAFF
Kettering-based Reynolds and Reynolds has about 1,300 local employees. TY GREENLEES / STAFF

A jury trial has been scheduled in an antitrust lawsuit against a major Kettering employer and a second company in federal court.

According to a schedule filed Wednesday in federal court in Wisconsin’s western district, a trial in Authenticom’s lawsuit against Kettering’s Reynolds and Reynolds and CDK Global LLC is set to happen Oct. 22, 2018.

That’s if the case gets that far: Confidential settlement proposals — outlining terms of a possible settlement in the case — are due by Aug. 20, 2018. Those letters will not be part of the lawsuit’s public record, the filing said.

RELATEDDC attorney: FTC probes not to be taken lightly

Both Reynolds and CDK are being sued by a third company, LaCrosse, Wisc.-based Authenticom Inc., which has accused the two companies of forming an agreement or business relationship against it. Authenticom charges that the two defendants have kept it out of auto dealership databases, even when auto dealers approved Authenticom’s use of those databases.

A spokesman for Reynolds has said the company believes that its policy of not allowing “unauthorized intermediaries” into its auto dealer database systems ultimately protects dealership data.

RELATEDCourt stays injunction against Reynolds

Authenticom is an auto dealer data integration service provider, while Reynolds and CDK are much larger companies offering auto dealer business management systems.

Meanwhile, publicly traded CDK recently revealed in a Securities and Exchange Commission filing that the Federal Trade Commission has asked CDK to “produce documents relating to any agreements between ourselves and Reynolds and Reynolds.”

CDK has said the company is cooperating with the request. A Reynolds spokesman has not commented on the FTC questions.

“The parties and their attorneys must at all times treat everyone involved in this lawsuit with courtesy and consideration,” Magistrate Judge Stephen Crocker wrote in Wednesday’s filing. “The parties must attend diligently to their obligation in this lawsuit and must reasonably accommodate each other in all matters so as to secure the just, speedy and inexpensive resolution of each proceeding in this matter.”

Reynolds has about 1,300 employees in a County Line Road campus near the Kettering-Beavercreek border.