United Bank & Trust Blog

Gary Haapala

As a child I loved roller coaster rides. The anticipation would begin on the way to the amusement park. We were impatiently waiting in the back seat of the car because the line to pay for parking always seemed like it was miles long. My brothers and I would try not to run through the parking lot at the same time trying to getting our parents to move faster so we could get to the gate and be free. Then, we would break into a full sprint to the roller coaster line. The anticipation was almost as much fun as the ride. Not really. We knew what was coming; speed, thrills, and maybe some danger (there were always stories about a roller coaster flying off the tracks). And 90 seconds later, it was over. Then we would move as fast as we could to get back in line to do it again. We could not get enough.

As an adult – not so much – I can barely stand the sight of watching my children ride the roller coaster from the safety of a bench under a tree with my feet firmly on the ground. I now enjoy a whole new experience at the park (yes, I removed amusement). Now, it is all about being with – and enjoying – my family. Things like; being entertained by shows, fellowshipping over a meal, playing games to win a teddy bear, and a refreshing tube ride in the water park’s meandering river. This is a much more predictable outcome resulting in a completely enjoyable and lasting experience.

Does the volatility in the stock market and your investment portfolio feel like a roller coaster ride? On March 9, 2009 the Dow Jones Industrial Average closed at 6,547 from a frightening ride down during 2008. As of April 21, 2010, it closed at 11,125 a 70% increase, or exhilarating ride up since then. It doesn’t have to feel like a roller coaster ride; you might have once enjoyed the ride by being an aggressive growth investor but maybe it is time to enjoy the experience by getting a deeper understanding for your tolerance for risk.

One way to achieve this is by building a moderate growth investment portfolio. This could be a portfolio that invests in stock and bond mutual funds that are diversified across multiple asset classes and investment styles. By utilizing mutual funds you have the ability to further diversify your risk. Investment outcomes are not predictable, but understanding your risk tolerance and using diversification as a tool will make the ride an enjoyable experience. If you would like help, contact us and one of our financial advisors will strive to help you achieve your goals.

Pam Jones-Sexton

In late March Congress passed the Health Care & Education Reconciliation Act of 2010 that amended the Patient Protection & Affordable Care Act. The idea is to change how health care is delivered and provide a path for 32 million more Americans to have access to health care. Most sources report that the reform, while necessary, is imperfect, but it provides a space to build on.

The Good

1. Long overdue – last significant change was in 1965.
2. Prohibits lifetime caps on coverage for individuals
3. Provides continued coverage for dependent children up to 26 years of age
4. Prohibits denying insurance for  “pre-existing conditions”
5. Prohibits denying care
6. Expected to lead to better coverage on preventative exams
7. Closes Medicare coverage gap with better coverage for prescription drugs
8. Potential tax credits to make insurance affordable
9. Potential savings from less fraud waste and abuse.
10. Potential savings from primary care in the doctor’s office rather than the ER
11. Low income consumers will get credits or vouchers to pay for part of the mandatory insurance.
12. Incentives to promote wellness

The Bad

1. Parliamentary maneuvers led to a 2,700 page document and ways to pass the package with a simple majority rather than a major majority
2. Confusing
3. Costs will be passed on to the consumer
4. Timelines range from 2010 to 2018 for implementation
5. Mandatory coverage is viewed by some as unconstitutional because it forces the purchase of insurance or face penalties.
6. Limit Flexible Spending Account contributions to $2,500
7. Consumer protection to debt collection by NFP hospital (I’m not sure if this is good or bad – may lead to other issues, such as the IRS will not have to review NFP hospitals and their community benefit activities – does this create more cost that will eventually find it’s way into our wallets?)
8. Experts show there are 24 – 27 parts to health care costs.  All components of the cost containment wheel aren’t addressed which will lead to a lop-sized solution.

The Ugly

1. $940 Billion price tag
2. Suggestion that this may lead employers to decrease or drop benefits
3. Items in law that have nothing to do with health care (i.e. pork bellies that are part of law in order to win a vote from a congressman)
4. Increased costs that are anticipated to be passed along to the consumer either directly or indirectly:
   • Increased Medicare tax
   • Adds Medicare tax to unearned income (e.g. investment income)
   • New taxes – e.g. Tanning salons will pay a 10% tax on 7-1-2010
   • New excise tax on high dollar “Cadillac” insurance plans
   • Taxes to insurance companies
   • Employers will pay more tax (exceptions include small business with less than 50 employers and builders)
   • New fees on medical device manufacturers (eyeglasses and hearing aids will be exempt)

To learn more about how these reforms will affect you, check out http://www.whitehouse.gov/Issues/health-Care

Sources:  Modern Physician, Plante & Moran, Harvard Business Review, Modern Healthcare, Crain’s Detroit Business

Kenny Leonard

Late last night the Senate and House passed — and President Obama signed — a bill (H.R. 4851) that among other things extends through May 31 funding to reduce or eliminate fees under the Small Business Administration’s 7(a) and 504 loan programs or until the funds are exhausted. The Senate passed the bill by a 59-38 vote, and House approved it two hours later, 289-112.

This is the fourth extension of the funds allocated to reduce or eliminate fees related to the SBA loan programs.

All of our trade publications still seem to hint that these extensions will be made through the end of the calendar year. Legislation has been proposed to do so and final House and Senate action is still pending.

For more information please read:

• http://money.cnn.com/2010/04/15/news/economy/senate_extends_unemployment_benefits/index.htm?hpt=T2
• http://www.prnewswire.com/news-releases/landrieu-praises-extension-of-important-recovery-act-lending-provisions-91002419.html

Source: American Bankers Association

Kathy McCrate

With more of our financial activities occurring over the Internet, it is important to be aware of risks these activities entail and steps you can take to reduce the risk that someone will illegally gain access to your private information or financial accounts.

Common Internet Scams

• Auction fraud – This may take many forms including emails saying you have a second chance to buy an auction item, non-delivery of an item purchased in an auction, defective merchandise or receiving cheaper merchandise.
• Advance payment frauds – Emails asking for help in getting money out of a country or advising you that you won a lottery lead to requests for money to cover legal fees, taxes, bribes, processing costs and taxes.
• Phishing – Emails notifying you that an institution or store need confirmation of account information lead to a fake (or spoofed) website that looks legitimate but is just a place to disclose personal information to fraudsters.
• Hot stock promotions – Emails, online newsletters and bulletin boards may be nothing more than a scam artist’s attempt to have you drive up the price of a stock so they can sell their shares.  This is often used with cheap and thinly traded stocks.

Protecting Your Online Activities

• Be careful using public computers. Using a computer at a cyber café or a free computer at a trade show can be dangerous. If you do use this type of computer make sure no one is looking over your shoulder to memorize your personal data and be sure to sign off when you are done.
• If you are using the Internet for financial transactions, be sure the sites you visit are secure. Most secure sites have URLs that start with “https://” instead of the normal “http://.”  Some websites may display a logo indicating it is secure, but make sure you know the site is one you trust.
• Wireless Internet networks have become common and convenient. Be careful using wireless networks that are free and not secure. Wireless home networks deserve attention as well. It may be time consuming or more expensive to have a secure network at home, but that is better than having a fraudster sitting in a car on your street monitoring your activities and gaining access to your files and information.
• It is important to install anti-virus software on your computer and keep it up to date.  The same holds true for firewalls and security patches for your operating system.

Passwords

Many websites you visit require a user name and password.  Having a strong password will make your online activities safer.  Unfortunately, many passwords are chosen to be easily remembered rather than to protect the user.  Some common passwords that hackers could easily guess are password, user name, your real name, your address, 123456, abcdef, or just a number. With just a four digit number, there are only 9,999 combinations and a sophisticated hacker could probably figure that out in seconds.

• Strong passwords are at least six characters long and preferably eight.  They should contain a mixture of upper and lower case letters, numbers and special characters (#, $, ^, &,!,?, {, >, etc).  They should not be based on personal information and not be based on words found in a dictionary.
• The difficulty of long and mixed passwords is that they can be hard to remember.  One suggestion is to create a password from a sentence that you are likely to remember.  For example, start with the sentence “My children John and Mary are 12 and 16 years old.”  Then use the first letters of the words, characters and the numbers to create the “McJ&Ma12&16yo” password.

Changing passwords often and using different at different websites also increases protection.  Keep any written record of your passwords in a safe location.

To learn more about protecting yourself against identity theft and account fraud, join us for a FREE webinar on April 21. Register today.

Kenny Leonard

The provisions in the American Recovery and Reinvestment Act, also known as the “stimulus bill,” that were signed into law in February 2009 has resulted in an increase of SBA lending by over 100% compared to volumes prior to the stimulus. The funds have run out three times now and each time Congress has extended the provisions for only a month or two. The volume of SBA loans submitted after the funds were exhausted dropped over 90% the following week.

Learn more about the affect of the stimulus bill clicking on the link: http://finance.yahoo.com/news/Governmentbacked-small-cnnm-4262871372.html?x=0&.v=2