• Elon Musk’s Twitter Takeover

    It has been a busy month for the richest man in the world, Elon Musk. The CEO of SpaceX and Tesla, Inc. has an estimated net worth of around $252 billion and a penchant for free speech, specifically on social media. A Twitter user since June 2010, Musk has faced some controversy through his choice of Tweets over the years. In August 2018, he claimed in a tweet that he was taking Tesla private at $420 per share. The SEC fined Musk and Tesla $20 million each, concluding that the tweets had no basis in fact and hurt investors.

    This time around, Musk moved more deliberately and was almost compliant in his quest to acquire Twitter for $44 billion and take it private.

    For Twitter shareholders, they will receive $54.20 per share in cash once the deal meets regulatory approval and other closing considerations. Even if you don’t hold Twitter stock, the changes Musk could bring to Twitter may impact how other social media and tech companies operate, like Facebook or Apple. As a private company, Twitter won’t have to report their financials in the same way as other competing companies, which means less transparency overall in the space. The following article outlines how exactly we got here in such a short time frame:

    Click to Read Article

  • Cyberattacks in 2022: What You Should Already Know

    As the conflict between Russia and Ukraine continues, the United States Government is warning American companies to be vigilant about cybersecurity and to protect themselves against malicious cyberattacks. In a statement on March 22, 2022, FBI Director Christopher Wray said they are “concerned” with the possibility of Russian cyberattacks against critical U.S. infrastructure in the wake of Russia’s war with Ukraine.

    “The reason we’re concerned about it is not just based on our longstanding understanding of how the Russians operate, but it’s actually the product of specific investigative work and surveillance work that we’ve been doing all together,” Wray told an audience at the Detroit Economic Club.

    The United States Congress recently passed legislation that has since been signed into law that mandates critical infrastructure sectors to report cyber security incidents, involving but not limited to, phishing attacks, malware, and ransomware, to the federal government.

    What is Phishing?

    Phishing is the fraudulent practice of sending emails or text messages appearing to be from reputable companies or trusted individuals to get recipients to reveal personal information such as passwords and credit card numbers. Phishing attempts are usually urgent-sounding, legitimate-looking emails or texts designed to trick you into disclosing personal information or installing a virus on your device. These scams can be sent as attachments or links that, when opened or clicked, may trigger malicious activity, or take you to fake sites that resemble the real business websites. According to CISCO’s 2021 Cybersecurity Threat Trends report, roughly 90% of all cyber attacks start with a phishing email.

    14 phishing red flags to watch for in 2022

    What is Malware?

    Malware, or “malicious software,” is a catch-all term that describes any malicious program or code that is harmful to systems. Hostile, intrusive, and intentionally nasty, malware seeks to invade, damage, or disable computers, computer systems, networks, tablets, and mobile devices, often by taking partial control over a device’s operations.

    How to tell if you’re infected with malware

    What is Ransomware?

    Ransomware is malware that employs encryption to hold a victim’s information at ransom. A user or organization’s critical data is encrypted so that they cannot access files, databases, or applications. A ransom is then demanded to provide access. According to cybersecurity company Emsisoft, ransomware attacks affected at least 948 government agencies, educational establishments, and healthcare providers in the United States in 2019, at a potential cost exceeding $7.5 billion. Ransomware attacks were up 92% last year, according to the 2022 Cyber Threat Report from SonicWall, a leading cybersecurity firm.

    While it is important for small and large businesses to protect themselves and their data from foreign and domestic hackers, it is equally important for individuals to be just as cautious.

    How can you protect yourself?

    • Be suspicious of unexpected or unsolicited phone calls, emails, and texts asking you to send money or disclose personal information.

    • Be cautious when receiving money movement instructions via email.

    • Keep your technology up to date, as well as your firewalls and anti-virus software.

    • Back up your data and ensure you have offline backups beyond the reach of malicious actors.

    • Be strategic with your login credentials and passwords.

    • Add two-step verification, which requires you to enter a unique security code each time you login to a website, mobile app, or access your financial accounts.
  • How Annuities React to Rising Interest Rates

    On March 16th, the Federal Reserve increased its federal funds rate from 0.25% to 0.50%, the first increase since 2018. This rate matters because it has a ripple effect on every aspect of consumers’ financial lives, from the annual percentage rate (APR) on credit cards to investment returns. While some investments, like bonds, react negatively to an increase in the benchmark interest rate, others thrive – like annuities. Keep in mind, there are hundreds if not thousands of annuities to choose from and they are not for everyone. Make sure to speak to your financial professional before considering adding an annuity to your portfolio.

    Different Types of Annuities

    • Fixed Annuity – The initial premium invested in a fixed annuity grows at a specific rate of interest for a specific time period. When the Federal Reserve raises its benchmark rate, the interest rate of fixed annuities typically follows suit, which results in better payouts for investors.

    • Fixed-Indexed Annuities – Similar to fixed annuities, this investment credits interest as well, however, the yield is calculated based on the performance of a market index, such as the S&P 500. When the interest rate environment inches up, like it is doing now, the growth potential of this investment increases. Akin to fixed annuities, there is no loss of principal – even when the market index it is following loses value.

    • Variable Annuities – These investments are more closely tied to equity markets because, traditionally, they hold contract assets in mutual-fund-like subaccounts. In this case, the operative term is “variable” because when equity markets fluctuate, so do the returns of variable annuities. Where the Fed Interest rate becomes important is if the contract owner adds, for a fee, a guaranteed living benefit rider that secures a separate income payout. Rising rates will give insurance companies more flexibility to increase payout rates on living benefits.

    What’s Next for the Fed?

    Federal Reserve policymakers will meet again in May to decide whether or not to increase the federal funds rate again. Since 2008, the rate has failed to get past 2.50% before tapering back down to zero. Prior to the Great Recession, the rate once approached 20 percent, as shown in the chart below.

    With inflation at its highest point in four decades (7.9%), the Federal Reserve is projecting to counter aggressively through seven total rate hikes this year that would reach 2.00%.

    If you are considering adding an annuity to your portfolio, an increasing interest rate environment should help bolster the balance sheets of the insurance companies who offer them, resulting in more competitive products with higher crediting rates.