“Safeguard 2015: Macroeconomic and Cybersecurity Outlook” was full of intriguing, applicable information – lots of note taking occurred!  With so much valuable information divulged in two hours, we thought it best to provide an event recap with some of the highlights from our expert guest speakers’ presentations.

Our first expert speaker was Dr. Esmael Adibi, Director of the A. Gary Anderson Center for Economic Research at Chapman University.  Dr. Adibi addressed both the U.S. economy and California’s economy.  A few specific notes to take away from Dr. Adibi’s informational (and entertaining!) presentation can be found below.

U.S. Macroeconomic Update:

• The 2007/2008 recession was the worst recession (highest drop in real GDP and employment) since WWII.  Over the last six years, the economy has been recovering as measured by real GDP growth and lower unemployment rates.
• However, the decrease in labor force participation, rising income gap, and increase in single-income families are concerning.
• Although the U.S. budget deficit has decreased, higher spending for Social Security, Income Security, and Health/Medicaid poses a risk.
• Many factors that affect consumer spending have improved (such as level of employment, income, housing prices, gas prices, etc.), and household net worth has reached a historical high.
• Real GDP is growing at about 3% and it is expected that 3 million new jobs will be created this year, which is extremely positive for the United States.

California Economic Outlook:

• The 2007/2008 recession was especially hard on California, but in 2013 California ranked among the top states for job growth.
• Home prices have rebounded (although they remain below peak levels); this trend is attributed to an improving job market.
• Home prices are estimated to rise by about 2.7% in 2015.

According to Dr. Adibi, the outlook on California’s housing market is positive.  However, he reminded the audience that percentage losses and gains are not symmetrical – if the value of an asset loses 50%, a gain of 100% is required in order for the asset value to fully recover and go back to even.  This principle is central to Beacon Pointe’s philosophy of investing.  

• California’s population is growing despite the state’s relatively high marginal income tax rates and minimum sales tax rates, yet there continues to be a population outflow to other states with lower costs of living.
• There has been a decrease in the number of filings with adjusted gross incomes of 500K+ on tax returns in California.  What does this mean?  It could actually become a large problem, as there is now a shift from more “tax-payers” to more “tax-users,” creating an even larger deficit in available funds.

For more information on Dr. Adibi’s macroeconomic research and Chapman University’s economic outlook, please visit  Chapman University Anderson Center Facebook Page.  You do not have to have a Facebook account to view the Chapman University Anderson Center Facebook Page.

Dr. Rand Morimoto, cybersecurity advisor to both President George W. Bush and President Clinton, was our topical event speaker of the day.  Dr. Morimoto covered several aspects of cybersecurity, including the current cybersecurity landscape and security best practices that protect individuals.

Today’s online cyberspace makes it easier to gather information and dissect it.  Dr. Morimoto used the example:

“…From your name alone, we can find your Facebook account, connect to mutual friends, find out your birthday, your dog’s name and potentially your maiden name.  Then we can look up your LinkedIn account and retrieve information such as the high school and university you attended or the hometown you grew up in, and use that information to “Retrieve Password” from an e-mail account.  From there, we can log into your email and access sensitive information such as bank statements, etc. that are emailed to you…”

Dr. Morimoto made an interesting point, that people tend to focus too much on the technology and not enough on the “people” aspect of cybersecurity.  Education on and awareness of phishing and malware scams are just as valuable in cybersecurity protection as technology.

There are several ways in which you can help better protect yourself from cybersecurity threats, including encrypting data (so that there is no worry about devices, storage, or transportation of data), setting double security credentials (i.e. need a “key” as well as a password to unlock a file), and NEVER using passwords that seem intuitive (think….if I can remember my password because it’s linked to something related to me, then so can a hacker!).  Be cautious of phishing and help prevent cyber attacks by not utilizing the same password for multiple accounts, using a password that is hard to remember, or creating unorthodox answers for account retrieval (i.e. favorite color = steak; this makes it hard for someone to decipher the password retrieval question as there is no logical connection).

Both of our speakers look at the year ahead with the idea of protecting assets, actively engaging and being educated in the decisions we make regarding both our investments and our security.  Beacon Pointe thoroughly stands behind the importance of safeguarding personal information from potential threats.  With cybersecurity making headlines (think…Sony), and the investment world becoming more accessible via mobile apps, tablets and the “cloud,” Beacon Pointe feels a strong duty to protect our clients as best as we possibly can.  Here are just a few ways in which we are actively protecting you:

• It is company policy to call our clients to verify their non-public personal information
• We verify and confirm who has authorized access to your financial data and accounts
• We regularly upgrade our software to facilitate encrypted data through our client portal
• We have recently hired an internal IT specialist

We hope the information gathered from our event is useful and applicable in your everyday lives.  Best wishes for a happy, healthy and successful 2015!

Warm Regards,

The Beacon Pointe Team