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Michael Michaud is the founder of ( and the Invest2Success Blog ( He has been investing and trading in the financial markets since 1989. He founded to empower individual institutional... More
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  • Securing Your Accounts From Cyber Thievery

    Cyber Thievery

    9 Ways to Secure Your Financial Accounts From Cyber Thievery by Morningstar Investment Research

    Cyber security experts offer tips for more secure log-ins, app usage, and ongoing account monitoring.

    After a raft of well-publicized data breaches at Target, Home Depot, Sony Pictures, Chick-fil-A, Morgan Stanley, and JP Morgan Chase, cyber security probably registers high on your financial anxiety meter.

    If your key financial and personal information is stolen, it can be vexing to fix things--as I've twice discovered as a victim of identity theft. You'll spend a lot of time canceling credit cards and denying charges.

    But it can be more damaging if a cyber thief gains access to even more sensitive information from your banking, brokerage, or mutual fund accounts. Then, instead of stealing a credit card number, they may be able to steal from your savings or retirement accounts. Indeed, scammers recently targeted Morgan Stanley customers.

    How likely is your information to be stolen?

    Although it's clear that hackers are working 24/7 around the globe to gain access to various financial, corporate, and government systems, you can put up a series of safeguards to ensure you don't become a victim.

    What You Can Do to Protect Yourself

    I've asked two cyber security experts to explain how to best protect your information. According to Jocelyn Baird of, here's how you can guard your banking and credit information:

    1. Be careful when logging into your online banking account.

    The first piece to this puzzle is to make sure you create a strong, unique password for each account and change it frequently--it's recommended to change passwords at least every three months. Also, never log into your bank account if you are using an unsecured network, such as public Wi-Fi. An unsecured network is vulnerable, and some scammers will use the public Wi-Fi at coffee shops or other crowded places to find victims. If you need to check your balance on the go, consider setting up text message commands with your financial institution that don't require you to log into your account. Or opt to disconnect your Wi-Fi connections and use your data instead.

    2. Don't give out your account information.

    Some forms, such as rental applications, ask for your bank account and routing numbers. Other times, someone might ask for your information over the phone to complete a transaction. By giving out this information, you're potentially opening yourself up to a scam. Only give your account information when absolutely necessary--and never over the phone, unless you are certain the company you are providing it to is legitimate.

    3. Watch out for email phishing attempts.

    Be suspicious of any email you receive that instructs you to click a link and log into your account. If you get an email that urges you to log into your account, open a new browser window, go to your bank's website by typing the URL into the browser address bar directly, and log in there to check for a problem. You can also call your bank's customer service to inquire about any potential issues with your account.

    4. Beware of text message phishing.

    Also known as "smishing," text message phishing is emerging as an issue with the increase in customers signing up for text message communication from their banks. If you receive a text urging you to call a number or click a link in regard to your account, be suspicious. Instead of calling the number provided, find your bank's customer service number in your records or on its website and call that to verify whether there is a problem.

    5. Verify your banking app before downloading.

    Many banks offer mobile apps, which is convenient but also presents potential security issues. It is important to ensure that the app you are downloading is the official app from your bank, rather than a third-party app created by a scammer to steal your information. Also, some of the official apps have had security flaws that require new versions to patch, so heed their requests to update promptly. And again, avoid logging into a mobile banking app unless you are connected to a secure Wi-Fi network or you are using mobile data.

    6. Monitor your statements.

    You may be tempted to toss out your bank statements or may forget to check your accounts regularly if you've opted to go paperless, but monitoring is important. Checking your statements means you will be far more likely to notice any suspicious activity on your accounts--and the earlier you can catch fraud, the easier it will be to stop it and reverse any damage done. Be sure to shred any mail from your bank before it goes into the trash to further keep it safe from garbage-snooping scammers.

    What about your brokerage and mutual fund accounts?

    Neal O'Farrell of recommends the following:

    7. Discuss security measures with your broker.

    "Talk to your broker first to find out what kind of security they offer," O'Farrell says. "Ideally that should include 'multifactor authentication,' as well as systems to detect unusual funds-transfer requests. And just like any other accounts, protect that password and keep your devices free from malware."

    Multifactor authentication means that another element, in addition to your username and password, is used as a way to identify yourself. For example, a reasonable security safeguard would be to ask three personal questions (you give the answers in advance) or register a pre-selected "icon" such as an animal picture along with the usual username/password combination.

    "The additional factors could be something biometric, like a finger or voice print; a key fob that generates a unique one-time code; a verification text message sent to your phone; or even something contextual, like are you trying to log in from the computer or IP address you normally use," O'Farrell says.

    8. Use one dedicated computer for transactions.

    There's an even simpler, little-known route to protecting your financial information, O'Farrell adds. "For the extra cautious, or if you have a lot to lose, consider investing in a cheap computer that you only use to access your online accounts. By doing this, you almost completely eliminate the risks of malware--because you're not using the computer for email, for surfing and shopping, for work, or to download or share anything--all the ways malware can sneak in. With computers as low as $150, it could be one of your best security investments."

    9. Do regular credit checks.

    Another way to safeguard your information is to do a regular credit check. That way you can see any major changes to your credit file. If you see unauthorized access or new accounts in your name, you have a right to correct the information without charge.

    Although your credit record will not reflect any intrusions into your brokerage or retirement accounts, it may give you a heads-up that your other financial information has been stolen.

    To see your credit report for free, check out, which will give you one report from each of the major credit reporting bureaus per year. You may also sign up for a credit-monitoring service (charges vary), but you can do most of the work yourself. Most major credit card companies will send you fraud alerts for free if they suspect trouble.

    Still concerned? More help may be on the way from Congress. In his State of the Union Address on Jan. 20, President Obama urged Congress to improve safeguards on digital information. He proposed the "Personal Data Notification & Protection Act." The legislation, if passed, would require consumer notification within a month if their personal information had been acquired in a data breach.

    Although the legislation will not shut down the illegal trade of personal information, it's a start in at least giving you a red flag when your financial information has been accessed without your consent.

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    Jan 29 8:29 AM | Link | Comment!
  • Investing In Apple's Must Have Ecosystem

    Apple Ecosystem

    This Weeks Free Stock Pick - Investing Apple's Must Have Ecosystem

    Apple reports Tuesday after the market close and analysts have been busy this month revamping their iPhone sales projections and consequently raising their EPS estimates for the quarter. And that's why it became a Zacks #1 Rank Strong Buy again last week.

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    Buy Entry: 98.50 to 100.22

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    Morgan Stanley technology analyst Katy Huberty issued a report last week in which she bumped her iPhone sales estimate for the holiday quarter from 62 million units to between 67 and 69 million.

    As if those record-breaking sales weren't enough, the average selling price (NYSE:ASP) of the world's most popular smartphone is expected to rise 5% to $667. This performance in a world of shrinking handset margins is due to two trends the analyst expects to continue this year: higher demand for the higher-priced iPhone 6 Plus and more customers picking devices with larger storage capacity.

    Of course, Apple relies on more than iPhones for its massive revenues which are expected to bust through the $200 billion mark this year. From

    Some 5.8 million Macs are thought to have been sold in the just-completed quarter, which would mark a new record high for the recently-resurgent computer lineup. Folding in a predicted 22 million iPad sales on top of older product lines, such as the iPod, would bring revenue to nearly $69 billion on 38.7 percent gross margin for the firm.

    Here Comes the Watch

    UBS analysts meanwhile issued the results from a survey they conducted that showed that a large percentage of current Apple customers were likely to purchase the Apple Watch, which is set to be released this quarter. The firm reiterated its buy rating and $125 price target for AAPL shares.

    According to, Huberty believes the "iWatch" is coming soon. She argues that Wall Street remains "too pessimistic" about the Apple Watch's potential, and forecasts shipments of 3 million units adding $1.4 billion in revenue for the March quarter.

    Apple's Must-Have Ecosystem

    Oppenheimer analysts recently raised their Q1 FY15 (first quarter calendar 2015) EPS estimate from $1.99 to $2.16 and their full-year revenue projection from $220.9 billion to $226.7 billion, at the high end of the Street range. They also reaffirmed their $130 price target. Here were two interesting summary notes in their January 20 report.

    CES Impression: Our trip to CES 2015 confirmed our view that Apple Watch is unlikely to have competition from other wearable and smartwatch makers. We believe its combination of creative user interface and hardware design will pose multiple-year leadership over competition, in similar ways to the iPhone.

    Spring Launches: We expect AAPL to release Apple Watch and an updated iPad of differentiated display size by March. We believe the enhanced product portfolio will effectively leverage Apple's overwhelming ecosystem advantage and help the company to address a wider consumer and enterprise audience.

    China Calling

    Cantor Fitzgerald analysts, who have a $143 price target on AAPL, put out a note last week about the upgrade to 3G and 4G phones based on subscriber statistics for all three China-based carriers for the month of December. Total 3G/4G subs in the country grew by 45% in 2014. Here's what they concluded...

    As part of the 4G expansion, we believe Apple is well positioned to benefit from this shift with larger iPhones (i.e., iPhone 6, iPhone 6 Plus), and we expect China to be a more important part of the Apple story in 2015. We continue to believe that Apple represents one of the more attractive stories in large-cap tech, trading at just 11x (ex-cash) our CY:15 EPS projection.

    This fits with the quarterly report from Skyworks Solutions (NASDAQ:SWKS) last week whose business is strong in multiple areas involving mobile communication and wireless connectivity. Their ability to serve competing customers like Apple and Samsung in China and meet the high demand for more radio frequencies and more complex technology solutions is expected to keep growing for several years.

    While some analysts would like to "call the top" in iPhone sales, the must-have ecosystem might keep breaking sales records even after the stellar report we get this week.

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    Disclosure: The author is long AAPL.

    Jan 26 7:49 PM | Link | Comment!
  • BitCoin PayPal And The Good And Bad


    PayPal Speaker Series Examines Good and Bad of Bitcoin by CoinDesk

    Online payments leader PayPal held an introduction to bitcoin event as part of its monthly TechXploration speaker series yesterday, packing hundreds into its Town Hall auditorium in San Jose, California.

    Attendees gathered for a deep, yet entertaining, session on how bitcoin works, overseen by the digital payments innovator that took the industry by storm in its early days with email-based money transfers.

    Leading the talk was Lorne Lantz, a developer and technical contributor for Andreas Antonopoulos' book 'Mastering Bitcoin'.

    While known principally as a payments solution, however, Lantz told the audience that is a small part of what bitcoin's greater technology and potential.

    He said:

    "Money is just the first app for bitcoin. Just like email was the first app for the Internet."

    The PayPal TechXploration event was held in part to promote the O'Reilly Bitcoin and Blockchain conference being held 27th January in San Francisco. Lantz is an organizer for the one-day affair, which will feature speakers such as Reid Hoffman of Greylock Partners, Balaji Srinivasan of Andreessen Horowitz and Andreas Antonopoulos.

    Positives and Negatives

    The presentation began with Lantz playing a video of various media clips often falsely portraying bitcoin, including one of famed investor Warren Buffet saying bitcoin is "a mirage, basically".

    How bitcoin transactions are confirmed and how cryptography plays a part were important aspects discussed during the session.

    The presentation also dived deep into bitcoin's open-sourced ledger.

    Lantz said:

    "The power behind bitcoin is the blockchain."

    He did not gloss over the fact that bitcoin has its drawbacks, though he did promote bitcoin as a great merchant tool that has lower fees and cash-like properties.

    Lantz went on to note that although bitcoin could be a great tool for the unbanked, there are fewer consumer protections.

    PayPal and Bitcoin

    As a company always keeping close watch the on digital payments industry, PayPal has already integrated online bitcoin payments via its Payments Hub.

    That PayPal offers educational content on bitcoin could perhaps be indicative of the digital currency's liftoff. That Lantz said he sees bitcoin innovating online payments - PayPal's core business - is a promising indicator for enthusiasts of bitcoin and its wider adoption.

    "Online is actually taking off. It's got some nice traction," he said.

    However, Lantz added:

    "There's a series of things that add up making it difficult for merchants to accept bitcoin offline."

    One of the big problems Lantz pointed out was the often difficult integration of bitcoin into the existing point-of-sale systems used by bricks-and-mortar businesses.

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