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What do low oil prices mean for investors?

Scott-Johnson---HeadAs you’ve no doubt noticed, your trips to the gas station have been a lot more pleasant these past several months. There’s not much doubt that low oil prices have been welcome to you as a driver. But when oil is cheap, is that good for you as an investor?
There’s no clear-cut answer. But consider the following effects of low oil prices:
• Positive impact on economy — When you spend less at the gas pump, relative to recent years, what will you do with your savings? Like most people, you’ll probably spend most of it on goods and services. If you multiply the amount of your increased spending by the millions of other Americans who are also saving money on gas, you can see that you and your fellow consumers are likely adding billions of dollars to the economy. Typically, a strong economy is also good for the financial markets — and for the people who invest in them.
• Different results for different sectors — Different sectors within the financial markets may respond in different ways to low oil prices, even if the overall effect is generally positive. For example, businesses such as consumer goods companies and auto manufacturers may respond favorably to cheaper oil and gas. But the picture might be quite a bit different for energy companies.   You could spend a lot of time and effort trying to adjust your investment portfolio in response to low oil prices. In fact, you may well want to consult with your financial professional to determine which moves might make sense for your individual situation. Yet there’s actually a bigger lesson to be learned here: Don’t overreact to temporary developments. The recent decline in oil prices has certainly had an economic impact, but no one can predict how long these prices will stay low or what other factors may arise that would affect the financial markets. That’s why you can’t reconfigure your portfolio based on particular events, whatever they may be — oil price drops, interest-rate fluctuations, political squabbles at home, natural disasters in faraway lands, and so on.
If you can keep from being overly influenced by specific events, you may be able to gain at least two key benefits: First, by not making trades constantly in reaction to the headlines of the day, you can avoid piling up heavy fees and commissions —costs that can reduce the return rate on your investments. Second, you’ll find that if you aren’t always thinking about what’s going on in the world today, you can focus your investment efforts more intensely on where you want to be tomorrow. The most successful investors set long-term goals and don’t focus on factors they cannot control, such as oil prices, interest-rate changes or other economic events. Instead, these investors make adjustments, as necessary, to accommodate changes in their goals as well as other changes, such as revisions in tax laws — but they basically stick to their same approach for the long term.
So be aware of low oil prices, but don’t get so “pumped” about them that you sludge up your consistent investment strategy — because that strategy has the energy to keep you moving toward your important objectives.
Scott Johnson, CFP, is a financial advisor with Edward Jones, 8146 W. 111th St., Palos Hills, 974-1965. Edward Jones does not provide legal advice. This article was written by Edward Jones for use by your local Edward Jones financial advisor.

Sal’s Cheesesteak moves to Justice

Sal’s Famous CheeseSteak moved last year into a new home in Justice after 10 years at 78th Street and Cicero Avenue near Ford City Mall.
“The rent was getting too high and the landlord didn’t want to negotiate,” said Salim Bal, who decided to move the restaurant closer to home.
“I didn’t want to sign another 10-year lease with yearly rent increases,” Bal said. “I have lived in the area all my life so I decided to move here.”
He closed the shop and reopened at 8025 W. 79th St. in the shopping center at the corner of 79th Street and Roberts Road in Justice.
Sal’s is a family affair.
“It’s me, my wife and the kids,” he said.
He said the move has been good for business.
“Everything on the menu is the same and even a little cheaper because the price of doing business here is cheaper than in Chicago,” Bal said.
Bal said the new shop is about 960 square feet and has a front dining room that has six tables and another six high stools.
He said the shop’s specialty is a Philly cheesesteak but its extensive menu also includes hot dogs, hamburgers, gyros, grilled chicken and salads.
Bal said he also offers carryout and he will deliver within two miles of the plaza.
The shop is open from 10 a.m. to 9 p.m. Monday to Saturday and from 11 a.m. to 6 p.m. on Sunday.
For information, call 708-728-0725 or visit the website at www.salsfamouscheesesteak.com.

Summit OKs new business
Summit trustees this week approved a business license for Different Mobile, which will do business as a Boost wireless retail/payment center. The office will be located at 7520 W. 63rd St.
Staples to close store
Office supply store chain Staples will close its Tinley Park store on Saturday, at 16189 S. Harlem Ave. in the Tinley Park Plaza.
The store is holding a clearance sale until it closes.
The retailer closed more than 125 stores in 2014 and will have shuttered at least 225 by the end of this year.
A store employee said Staples locations in Orland Park and Frankfort would be staying open.
The closings are part of a pattern of consolidations in the office supply business as stores no longer need as much floor space to sell the supplies and electronics that schools and businesses purchase.
Office Depot, which merged in 2013 with OfficeMax, is in the process of closing 400 stores in the United States.
 
If you see a new business in town or wonder what happened to an old favorite, drop me a line at This email address is being protected from spambots. You need JavaScript enabled to view it. .
You can also catch up on Comings & Goings in other parts of the Southland at www.southlandbusinessnews.com.

Check out this year-end financial checklist

Scott-Johnson---HeadAs 2014 draws to a close, you may want to look back on the progress you’ve made this past year in various areas of your life — and that certainly includes progress toward your financial goals. At the same time, you may want to make some end-of-year moves that can close out 2014 on a positive note while paving the way for a productive 2015.
Here are a few such moves to consider:
• Boost your retirement plan contributions. This actually isn’t an end-of-year move because you have until April 15, to contribute to your Roth or Traditional IRA for the 2014 tax year. Nonetheless, the sooner you get extra dollars working for you in your IRA, the better. You can put in up to $5,500 to your IRA (or $6,500 if you’re 50 or older) for 2014. If you are self-employed, or run a small business, you also have until April 15 to contribute to a retirement account, such as a SEP IRA or a SIMPLE plan. In addition to helping you build resources for retirement, these types of plans can offer you some tax advantages — so if you haven’t established a retirement plan yet, consult with your financial and tax professionals
• Sell your “losers.” If you own investments that have lost value since you purchased them, you can sell them before 2014 ends and use the tax loss to offset some capital gains you may have earned in other investments. If you don’t have any capital gains, you can use up to $3,000 of your tax losses to offset other ordinary income. And for a loss greater than $3,000, you can “carry over” the excess and deduct it from your taxes in future years. If you still liked the investment that you sold at a loss, and you want to keep it in your portfolio, you could repurchase it, but you’ll have to wait 31 days to avoid violating the IRS’ “wash sale” rules. Keep in mind that these suggestions only apply to investments held outside your employer-sponsored retirement account; you can’t take a tax deduction on capital losses in a 401(k) or similar plan.
• Evaluate your 401(k) investment mix. You may be able to adjust the investment mix in your 401(k) as often as you like. So when evaluating your 401(k), make sure your holdings aren’t concentrated in just a few investments, and try to determine if your portfolio is still appropriate for your risk tolerance — not too aggressive or too conservative. Also, if your plan offers a “Roth” option, consider taking advantage of it — with a Roth, you won’t be able to deduct your 401(k) contributions from your taxes, but once you retire, you won’t be taxed on your withdrawals.
• Review your insurance coverage. If you’ve experienced any changes in your life in 2014 — new spouse, new child, divorce, new job, etc. — you may need to review your life insurance coverage to make sure that it’s still sufficient for your needs and that you have the correct beneficiaries in place.
By making these and other moves, you can say a fond farewell to 2014, knowing that you’ve done what you could to help bolster your financial position — for 2015 and beyond.

 Scott Johnson, CFP, is a financial advisor with Edward Jones, 8146 W. 111th St., Palos Hills, 974-1965. Edward Jones does not provide legal advice. This article was written by Edward Jones for use by your local Edward Jones financial advisor.

Share your bounty with your loves ones

Scott-Johnson---HeadWhile enjoying Thanksgiving, a holiday that once celebrated the harvest season many of us today may not be directly connected to agriculture. Yet we still gather on Thanksgiving with our loved ones to share whatever “bounty” we may have. But this practice doesn’t have to begin and end with food. Why not incorporate the spirit of sharing into your overall financial strategy?
Here are a few suggestions for doing just that:
Make financial gifts. You could give shares of stock to your loved ones, or perhaps give them money to help fund their IRAs. (They must have earned income, however, to be eligible to contribute to an IRA.) You can give up to $14,000 per year, per recipient. If you are married, you and your spouse can each give up to the $14,000 yearly limit.
Invest in your children’s future. To help your children meet the high costs of higher education, you might want to invest in a college savings vehicle. One option to consider is a 529 plan. When you contribute to a 529 plan, your earnings are subject to tax-free growth potential and distributions are free of federal taxes, provided they are used for qualified higher education expenses. (Keep in mind, though, that Section 529 plan distributions not used for these qualified expenses may be subject to income tax and a 10percent penalty.) Furthermore, if you invest in your home state’s 529 plan, you may receive state tax incentives. Tax issues for 529 plans can be complex, though, so you’ll need to consult with your tax advisor about your situation. Another benefit of 529 plans: You control the assets right up to the point at which they are actually used. So, if you have been putting away money for a particular child (or grandchild) and he or she decides against college, you can easily switch to another beneficiary.
Review your insurance policies. If something were to happen to you, is your life insurance sufficient to take care of your family? In other words, would there be enough money available to pay off your mortgage, send your children to college and help your surviving spouse meet at least some of his or her retirement expenses? A financial professional can help you determine if your life insurance is sufficient for your needs.
Consider involving your family with your estate plans. To help ensure your wishes get carried out the way you intended, consider keeping family members informed of your estate strategy, which could involve your will, living trust, power of attorney and other legal documents. And don’t forget to keep your beneficiary designations up to date on your retirement accounts and your life insurance policy. So if you’ve gone through changes in your family situation, such as a divorce or remarriage, work with your professional team, including your financial advisor and your tax and legal advisors, to make ensure your investment strategy aligns with your estate goals.
Once the turkey is eaten and the football games have ended, Thanksgiving will draw to a close. But consider these strategies sharing your “bounty” with your loved ones all year long — and throughout your lifetime.

 Scott Johnson, CFP, is a financial advisor with Edward Jones, 8146 W. 111th St., Palos Hills, 974-1965. Edward Jones does not provide legal advice. This article was written by Edward Jones for use by your local Edward Jones financial advisor.

Prepare far ahead for long-term care costs

Scott-Johnson---HeadNovember is Long-Term Care Awareness Month – a month dedicated to educating the public about the need to prepare for the potentially devastating costs of long-term care. And the more you know about these expenses, the better prepared you will be to deal with them.
To begin with, just how expensive is long-term care?
Consider this: The average cost for a private room in a nursing home is more than $87,000 per year, according to the 2014 Cost of Care Survey produced by Genworth, a financial-services company.
And the average cost of an assisted living facility, which provides a level of care that is not as extensive as that offered by a nursing home, is $42,000 per year, according to the same Genworth study. All long-term care costs have risen steadily over the past several years, with no indication that they will level off.
Many people, when they think about long-term care at all, believe that Medicare will pay these costs — but that’s just not the case. Typically, Medicare only covers a small percentage of long-term care expenses, which means you will have to take responsibility. Of course, if you are fortunate, you may go through life without ever needing to enter a nursing home or an assisted living facility, or even needing help from a home health-care aide. But given the costs involved, can you afford to jeopardize your financial independence — or, even worse, impose a potential burden on your grown children?
To prevent these events, you will need to create a strategy to pay for long-term care expenses — even if you never incur them. Basically, you have two options: You could self-insure or you could “transfer the risk” to an insurer.
If you were going to self-insure, you would need to set aside a considerable sum of money, as indicated by the costs mentioned above. And you would likely need to invest a reasonably high percentage of this money in growth-oriented investments. If you chose this self-insurance route, but you never really needed a significant amount of long-term care, you could simply use the bulk of the money for your normal living expenses during retirement and earmark the remainder for your estate. However, if did need many years of nursing home care, you could end up going through all your money.
As an alternative, you could transfer the risk of paying for long-term care to an insurance company. Many plans are available these days, so, to find the choice that is appropriate for your needs, you will want to consult with a professional financial advisor. Here’s a word of caution, though: The premiums for this type of protection rise pretty rapidly as you get older, so, if you are considering adding this coverage, you may be better off by acting sooner, rather than later.
None of us can know with certainty what the future holds for us. Ideally, you will always remain in good shape, both mentally and physically, with the ability to take care of yourself. But, as you’ve heard, it’s best to “hope for the best, but plan for the worst.” So, take the lessons of Long-Term Care Awareness Month to heart and start preparing yourself for every scenario.

  Scott Johnson, CFP, is a financial advisor with Edward Jones, 8146 W. 111th St., Palos Hills, 974-1965. Edward Jones does not provide legal advice. This article was written by Edward Jones for use by your local Edward Jones financial advisor.