June 2016 Newsletter

FinancialChip Debit Cards: What You Need to Know

There's a lot of confusion going on around the new EMV chip debit cards. Here's an in­depth look at what the chip debit cards are, the historybehind their creation, and how this affects you.

FinancialLong­Term Investment TruthsKey Lessons for Retirement Savers

You learn lessons as you invest in pursuit of long­run goals. Some of theselessons are conveyed and reinforced when you begin saving for retirement, andothers you glean along the way. Hint: News channels get higher ratings whenthey can make people panic.Link to Article

Off TopicA Bear's Eye View of Yellowstone

For the first time, trek into the wild backcountry of America's first national parkand see what it looks like from a bear's point of view. By National Geographic.Rawr

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Chip Debit Cards: What You Need to KnowThat little 3" x 2" piece of plastic in your wallet is getting an upgrade. That’s right, your debitcard is getting a facelift. Talk about plastic surgery!

Honestly, most of us don’t give a lot of thought to how that debit card works on a daily basis.For years, we’ve just swiped the card, typed in our PIN number, and headed home with ourstuff.

Beginning late in 2015, that process started to change. Banks and financial institutions beganrolling out the new chip debit cards. These MasterCard and Visa cards look like the ones you’veused for years—the same numbers, logos, security number on the back and magnetic strip. Sowhat’s new?

The real difference with these new cards is the small computer chip embedded in thefront just above the first set of numbers. That little metallic microchip allows your card to"talk" to the latest chip­enabled point­of­sale terminals at your favorite stores.

Why All the Fuss About This Little Chip?

The standard magnetic strip cards we typically use in the U.S. are based on a 50­year­oldtechnology. The magnetic strip stores your name, account number, the card expiration date andthe security code from the back of the card. If someone stole your card or even just swiped it

through a card reader, all of that information could be used for illegal purposes and even full­blown identity theft.

The new EMV chip cards, however, have been used in Europe since 1994 as an attempt tobattle the high rates of fraud and counterfeiting. EMV stands for Europay/MasterCard/Visa—these companies have worked together to implement new, more secure technology. The card’smicrochip creates a unique one­time­use code for each transaction. This makes the cards moredifficult to counterfeit and makes them useless for onsite retail purchases if someone stealsyour card without knowing your PIN. It also prevents hackers from getting your account numberin the event of a store’s data breach.

The unique one­time­use code created with each transaction makes the cards more

difficult to counterfeit and makes them useless for onsite retail purchases if someone

steals your card without knowing your PIN.

This has significantly reduced counterfeit card fraud, saving Europeans hundreds of millions ofdollars. As a result, EMV chip cards have almost completely replaced the magnetic­strip cardsin Europe and they’re gradually replacing them in Asia, South America, Canada and Mexico. In2015, the U.S. started transitioning to the new EMV technology and has already seen areduction in card fraud figures.

It’s About Data Protection

You may think, But I’m super careful with my card. Why do I have to jump through these newhoops? Fair question. The problem is, though, that retailers may not be as careful withyour personal information.

Take the recent Target data breach, for example. During the Christmas shopping season of2013, hackers gained access to Target’s customer database. Over 60 million people had theirpersonal information accessed including 40 million card numbers used by Targetcustomers. That means all you had to do to put your personal information in jeopardy was buyone Christmas present using your debit card at Target.

If you were one of the victims, the good news is that Visa, MasterCard or the issuing bank was

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responsible for protecting you from fraudulent charges per their different protection plans. Thatwas bad news for the banks, because they were out tens of millions of dollars in losses fromcovering those charges. In the end, the banks sued Target, and Target agreed to a $39 millionsettlement with several U.S. banks to reimburse them for their losses.

That was the last straw for the U.S. banks who were tired of being on the hook for fraudulentcharges because of outdated card security. In response, they started revising their policies andsecurity practices, looking to use the European EMV model here in the states. Banks set a dateof October 2015, and they encouraged American retailers to replace the outdated swipe­onlycard readers for the new chip­and­PIN terminals. That’s when things started getting confusingfor all of us!

Who’s Responsible for Your Protection?

As of October 2015, the liability for card­present (a physical card used in a store) fraud shiftedto whichever party is the least EMV­compliant at the time of the transaction. Three playerscould be liable:

1. The retailer (where you shop)2. The card issuer (your local bank)

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3. The credit card company who backs the debit card (like Visa or MasterCard)

For example, if you use your debit card at a retail store that hasn’t updated its card terminal forthe new chip­enabled security, the retailer is now responsible for any losses you incur if yourpersonal data is stolen. The card issuer figures they’ve done their job in making the newsecurity systems available, so if the retailer doesn’t take advantage of them, they’re on the hookfor any mishaps.

However, if the store has updated their payment technology and your information is hacked, thecard issuer (backed by the credit card company) assumes responsibility just like they alwayshave.

These kinds of Target­style data breaches shouldn’t happen anymore if you’re using a newchip­enabled debit card at a chip­enabled point­of­sale register. The chip on your card doesn’tpass your actual card number to the retailer; instead, it creates a one­time­use number that’sonly good for the transaction you’re making at that moment. Even if someone hacked thestore’s database, your card number wouldn’t be on file, so you wouldn’t be in danger.

The chip on your card doesn’t pass your actual card number to the retailer; instead, it

creates a one­time­use number that’s only good for the transaction you’re making at

that moment.

Online fraud is another matter. Since the new chip cards have an actual card number printed on

them, that’s the number you’d use to make purchases online. So, if someone stole your cardnumber, they could make fraudulent online purchases on your account. In that case, the cardissuer (backed by the credit card company) is liable for any illegal charges.

The Bottom Line

Generally speaking, your debit card issuer (your bank) assumes the main responsibility for youraccount and it provides fraud and purchase protection backed by Visa and MasterCard. Anydebit charges you make are processed only by your bank—they aren’t processed through Visaor MasterCard whether you use your PIN at the point of sale or not.

If you file a fraud claim, though, the bank will probably check to see if the retailer bears theburden. That’s a fight between the bank and the retailer, however. On your end, the bankshould refund any money lost due to fraud.

It’s also worth noting that this change is not the result of any new laws. There have been nonew laws passed regarding chip­enabled cards. This is all coming from the banks trying toeliminate the fraud that costs them millions of dollars every year. The new EMV chip debit cardsare the first step in that process.

This is all coming from the banks trying to eliminate the fraud that costs them millions

of dollars every year. The new EMV chip debit cards are the first step in that process.

The Messy Middle

The most confusing part of this transition is that we’re currently in the "messy middle" of thechip­card transition. European banks have fully transitioned, so their cards have no magneticstrip at all. American cards, however, have both the chip and a magnetic strip right now. In afew years, American cards will also drop the magnetic strip and we’ll be fully transitioned. Fornow, though, not knowing when you should swipe or when you should insert the card into thechip reader is a pain, and there’s a good chance the clerk behind the counter won’t be informedenough to help you.

Knowing that, here are a few things to keep in mind during the chip­card conversion:

If you’re using your chip debit card at a chip­enabled retailer, you probably won’t have theoption of choosing "credit" at checkout. That’s good, though, because chip debit cards aremuch more secure when used with a PIN.If someone steals your physical card, they won’t be able to use it in a chip­enabledphysical retail store unless they also know your PIN.Retailers are already supposed to have chip­enabled terminals in place, but gas stationshave until late in 2017 to update their hardware.The microchip produces a unique one­time digital authentication code for eachtransaction when the card is verified with the user’s PIN. That means the retailer won’teven know your actual account or card number, meaning it can’t be hacked and stolenlater.

Stay on Guard

Get in the habit of checking your account activity weekly to monitor transactions. Assoon as you see something suspicious, call the bank that issued your debit card and alert themto possible fraud. Many card issuers, as well as Visa and MasterCard, provide extra measuresyou can use to protect your card information when making online purchases. If you shop onlineoften, check into that information.

Of course, the rules for chip debit cards are likely to change as the technology changes, so youshould always check with your bank to see exactly what their policy is and how you can bestprotect yourself. In general, you should have confidence when using your EMV chip debitcards because they provide the most secure transaction when used in combination withyour PIN.

An error occurred.

Try watching this video on www.youtube.com, or enable JavaScript if it is disabled in your browser.

Charisse Jones, "Visa: Some merchants see dip in fraud thanks to chip cards,"USA TODAY, April 19, 2016.

Eric Dezenhall, "A Look Back at the Target Breach," Huffpost Business, June 6, 2015.

Ahiza Garcia, "Target settles for $39 million over data breach," CNN Money, December 2, 2015.

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Long-Term Investment Truths

Key lessons for retirement savers.

You learn lessons as you invest in pursuit of long-run goals. Some of these lessons are conveyed and reinforced when you begin saving for retirement, and others you glean along the way. First & foremost, you learn to shut out much of the "noise." News outlets take the temperature of global markets five days a week (and even on the weekends), and fundamental indicators serve as barometers of the economy each month. The longer you invest, the more you learn to ride through the turbulence caused by all the breaking news alerts and short-term statistical variations. While the day trader sells or buys in reaction to immediate economic or market news, the buy-and-hold investor waits for selloffs, corrections and bear markets to pass. You learn how much volatility you can stomach. Volatility (also known as market risk) is measured in shorthand as the standard deviation for the S&P 500. Across 1926-2014, the yearly total return for the S&P averaged 10.2%. If you want to be very casual about it, you could simply say that stocks go up about 10% a year - but that discounts some pronounced volatility. The S&P had a standard deviation of 20.2 from its mean total return in this time frame, which means that if you add or subtract 20.2 from 10.2, you get the range of the index's yearly total return that could be expected 67% of the time. So in any given year from 1926-2014, there was a 67% chance that the yearly total return of the S&P might vary from +30.4% to -10.0%. Some investors dislike putting up with that kind of volatility, others more or less embrace it. You learn why liquidity matters. The older you get, the more you appreciate being able to quickly access your money. A family emergency might require you to tap into your investment accounts. An early retirement might prompt you to withdraw from retirement funds sooner than you anticipate. If you have a fair amount of your savings in illiquid investments, you have a problem - those dollars are "locked up" and you cannot access those assets without paying penalties. In a similar vein, there are some investments that are harder to sell than others. Should you misgauge your need for liquidity, you can end up selling at the wrong time as a consequence. It hurts to let go of an investment when the expected gain is high and the Price-to-Earnings ratio is low. You learn the merits of rebalancing your portfolio. To the neophyte investor, rebalancing when the market is hot may seem illogical. If your portfolio is disproportionately weighted in equities, is that a problem? It could be. Across a sustained bull market, it is common to see your level of risk rise parallel to your return. When equities return more than other asset classes, they end up representing an

increasingly large percentage of your portfolio's total assets. Correspondingly, your cash allocation shrinks as well. The closer you get to retirement, the less risk you will likely want to assume. Even if you are strongly committed to growth investing, approaching retirement while taking on more risk than you feel comfortable with is problematic, as is approaching retirement with an inadequate cash position. Rebalancing a portfolio restores the original asset allocation, realigning it with your long-term risk tolerance and investment strategy.It may seem counterproductive to sell "winners" and buy "losers" as an effect of rebalancing, but as you do so, remember that you are also saying goodbye to some assets that may have peaked while saying hello to others that you may be buying at the right time. You learn not to get too attached to certain types of investments.Sometimes an investor will succumb to familiarity bias, which is the rejection of diversification for familiar investments. Why does he or she have 13% of the portfolio invested in just two Dow components? The investor just likes what those firms stand for, or has worked for them. The inherent problem is that the performance of those companies exerts a measurable influence on the overall portfolio performance. Sometimes you see people invest heavily in sectors that include their own industry or career field. An investor works for an oil company, so he or she gets heavily into the energy sector. When energy companies go through a rough patch, that investor's portfolio may be in for a rough ride. Correspondingly, that investor has less capacity to tolerate stock market risk than a faculty surgeon at a university hospital, a federal prosecutor, or someone else whose career field or industry will be less buffeted by the winds of economic change. You learn to be patient. Even if you prefer a tactical asset allocation strategy over the standard buy-and-hold approach, time teaches you how quickly the markets rebound from downturns and why you should stay invested even through systemic shocks. The pursuit of your long-term financial objectives should not falter - your future and your quality of life may depend on realizing them.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification and Asset Allocation do not protect against market risk. Standard deviation is a historical measure of returns relative to the average annual return. A higher number indicates higher overall volatility. This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a

competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Citations. 1 - fc.standardandpoors.com/sites/client/generic/axa/axa4/Article.vm?topic=5991&siteContent=8088 [6/4/15]

A Bear’s­Eye Viewof Yellowstone

What do bears eat? How far do they roam?Find out in this interactive journey through

the Greater Yellowstone Ecosystem.

About This Project

For the first time, trek into the wild backcountry of America's firstnational park and see what it looks like from a bear's point of view.

Special cameras were attached to the tracking collars of two grizzliesand two black bears in Yellowstone. Massive and hungry, these bearsprowl for food and confront danger along the way. It's a matter of lifeand death for all of them. Tag along as National Geographic givesyou an unprecedented window into some of the most fearsomepredators on Earth. And watch as these bears act as tour guides

through their secret world, with little human intervention.

Black Bear

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Will the BearCam Reveal a Cannibal?

"The bear doesn't panic or climb a tree to flee. It stands itsground."

— Kerry Gunther, senior bear biologist, Yellowstone National Park

01Berries Make for aTasty Dish

Bears rely on different types of habitats for avariety of food sources. Berries supply themwith food rich in sugar that converts to muchneeded fat for the winter.

0:00

Bear View 41°

09.04.2014 — 07:19

"Even when bears aretraveling, they're often feedingthe entire time."

Kerry Gunther

02Climbingthe Slopes

In these three video clips taken an hour apart,the bear travels over a variety of terrains,climbing slopes and ending up on a snow patch.

Kerry Gunther 00:00 / 00:45

0:00

Bear View09.06.2014 — 17:59

48°

03Something toChew On

The bear digs around a food storage area usedby red squirrels and finds some white bark pinecone to chew on.

0:00

Bear View09.07.2014 — 08:39

52°

Photograph by Michael Nichols

04A BackyardVisitor

The bear splashes his way through a creekbottom, cutting through the backyards ofsuburban homes outside of West Yellowstone,Montana.

0:00

Bear View09.08.2014 — 19:19

51°

"More than likely, 22517 andthe bear that he's feeding onprobably were attracted to thesame food source."

Nate Bowersock

05A Bear­Eat­BearWorld

There are occasions where bears eat otherbears. It turns out this bear is a cannibal.

Nate Bowersock 00:00 / 00:52

0:00

Bear View09.17.2014 — 15:59

52°

"The bear doesn't panic orclimb a tree to flee. It standsits ground."

Kerry Gunther

Photograph by Ronan Donovan

06Face­to­Face Witha Pack of Wolves

In twilight, the bear comes face­to­face with apack of wolves. Standing his ground, hisposture tells the lobos he isn't a potential foe tomess with, and no battle ensues.

Kerry Gunther 00:00 / 00:49

0:00

Bear View09.25.2014 — 19:39

54°

Photograph by Michael Nichols

01Peekaboo Throughthe Trees

In his first full summer on his own, thisyouthful bear eats his way through hills nearTower Creek. You'll notice that he pauses atone point when he looks through the trees andspots human onlookers.

0:00

Bear View06.11.2015 — 07:20

53°

0:00

Bear View06.15.2015 — 07:40

50°

Photograph by Charlie Hamilton James

03Into the Valley

He fords Nez Perce creek and journeys intoHayden Valley.

0:00

Bear View06.17.2015 — 19:00

55°

"More than likely this is asibling and not a mate."

Nate Bowersock

04Finding a Friend

Bears can socialize with one another. Here,while cresting a hill, he seems to enjoy thecompany of another teenage bruin, perhaps arelative.

Nate Bowersock 00:00 / 00:43

0:00

Bear View 64°

05Confrontation

But bears don't always get along with oneanother. When confronted by a largercompetitor here, he slowly walks backwardbefore going into a full­fledged run.

0:00

Bear View07.06.2015 — 20:00

56°

"A grizzly bear's claws aredesigned for digging foodsfrom the soil."

Kerry Gunther

Photograph by Ronan Donovan

01A Day in the Life

Here's a glimpse at a typical day for a grizzly—digging roots, feeding on a bison carcass, andwalking across a meadow.

Kerry Gunther 00:00 / 00:57

0:00

Bear View09.12.2014 — 08:39

34°

Photograph by Ronan Donovan and Michael Nichols

02Bath Time

A bear isn't motivated only by finding food.Here he takes a bath in a pond.

0:00

Bear View09.15.2014 — 17:39

37°

03A Nutritious Snack

White bark pine seeds are a highly nutritiousstaple for grizzlies that put on weight beforeretreating to their dens.

0:00

Bear View09.17.2014 — 16:59

52°

04On the Prowl

The autumn mists will turn soon to snow in theYellowstone high country. But not before thebear prowls the perimeter of his home range.

0:00

Bear View09.19.2014 — 06:59

50°

05Beware ofGrizzlies

A bear lumbering through Hayden Valley, aka"the valley of grizzlies," must be alert to big

"You can easily see a dozengrizzly bears in one morning,or even 23 grizzly bears on onebison carcass."

Kerry Gunther

bear rivals. And hikers must be alert to thedanger of running into bears.

Kerry Gunther 00:00 / 00:46

0:00

Bear View09.29.2015 — 16:59

Photograph by Michael Nichols

01Preparing for theBig Sleep

The onset of fewer daylight hours and coldertemperatures tells a bruin to hurry and eat asmuch as possible. That's how bears bulk up tosurvive months of winter hibernation.

0:00

Bear View09.07.2014 — 17:00

"Rubbing on a tree like that—not only does it serve to maybescratch an itch, but they'releaving scent behind."

Kerry Gunther

02Marking HisTerritory

The bear uses a towering pine as a scratchingpost and a place to leave a scent, signaling toother bears this is his territory.

Kerry Gunther 00:00 / 00:50

0:00

Bear View09.11.2014 — 19:40

31°

03A RefreshingPause

People are never far away along the UpperYellowstone River Basin. Here the beardiscreetly navigates a gauntlet unnoticed,stopping for a drink in a rushing creek.

0:00

Bear View09.17.2014 — 09:20

52°

"228 is getting ready for

04In the Boneyard

Within days this grizzly will leave behindnothing but bones from a bison carcass. He's inwhat's known as the boneyard.

Nate Bowersock 00:00 / 01:01

hibernation, so it's veryimportant he puts on as muchweight as possible."

Nate Bowersock

0:00

Bear View10.02.2014 — 18:40

36°

Black Bear

22517Black Bear

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The NextJourney

This project was designed by experts at Yellowstone National Park who

wanted to know more about the eating habits and habitat use of bears. The

camera collars gave biologists a bear's­eye perspective they didn't have before,

20 seconds at a time. The videos will also give them a basis of comparison to

see how bears might shift their diet as the climate changes. Next up—a longer,

more extensive use of collar cameras involving more bears.

Revisit the Journey — Choose a Bear

Credits

Design andDevelopment: Hello

Monday. Topphotograph byCharlie Hamilton

James, from GrandTeton in the Greater