Archives for September 12, 2017

Big List of Ways To Protect Your Credit: Free Credit Monitoring, Credit Locks, Fraud Alerts, and Credit Freezes

eq_hackAs you probably know, Equifax was hacked and literally half of all Americans could be affected. It seems like every media outlet has a “what you should do now” article, but I’ve also gotten some e-mails asking for my personal take (for which I’m flattered). Here goes…

Free credit reports. Everyone should take advantage of the free copy of their credit reports (Equifax, Experian, TransUnion) and their bank report (ChexSystems, TeleCheck) available every 12 months. I would also add LexisNexis to the ones I personally check. This free access is mandated by the government. Here again is my Big List of Free Consumer Reports.

Free credit monitoring. There are many offers nowadays for free credit scores and partial snapshots of your credit report. These are provided by private services, either in partnership with or as a subsidiary of the major credit bureaus. In addition, some offer credit monitoring, where they will e-mail or text you when a significant change occurs (new accounts, etc). I choose to take advantage of this, knowing it is in exchange for some ads. Here’s a recipe for credit monitoring coverage across all three major bureaus:

Free credit locks. The credit bureaus now have a feature that allows you to instantly “lock” and “unlock” the credit report of a specific credit bureau and thus prevent access. These are nice because you can unlock it for a day or so when you need, but otherwise keep it locked. Again, if they are free, they are probably supported by ads and/or upsells (which is fine by me, I will stick with free).

Free 90-Day Fraud Alerts. If you are concerned that your personal information is compromised (you should be!), you can any one of the three major credit bureaus and ask for a “Fraud Alert” to be placed on your credit report. This lets all potential creditors know that you are at high risk and that they need to do extra identity verification. Be sure that they have your current information as they will call you every time someone tries to check your credit report.

This is free of charge. It will expire automatically after 90 days, but you can call in and renew by submitting a new request within 30 days of your current alert expiring. (If you are a documented victim of identity theft, you can ask for an Extended Fraud Alert of up to 7 years.) By law, you should only need to one of them, and they are supposed to the other two companies and thus have the Fraud Alert active on all three accounts. Taken from

Credit Freezes (Fees may apply). This is the most comprehensive but also tedious and potentially-costly measure to take. Once you initiate a credit freeze, it will stay on there permanently in most states (or at least 7 years in others). In order for a business to check your credit report, you must manually “unfreeze” your credit temporarily. To initiate, this may cost around $10, but Equifax is waiving this fee for the next 30 days. Temporary unfreezing may cost another $5 to $10 each time, depending on your state. Finally, it may cost another ~$10 to lift the freeze permanently. Now possibly triple those fees, because you have to pay separately for each bureau. Here is the Equifax fee schedule by state ]. If you are a documented ID theft victim with police report, fees may be waived. You can do this online, snail mail, or by phone. You must each credit bureau separately.

My take. That’s the menu; I would start at the top and pick what works for you. I tend to open a relatively high number of credit and bank accounts throughout the year, often for a time-senstive promotion, so I choose to decline the extra hassle and cost that comes with a credit freeze. If you rarely get new accounts or simply feel otherwise, go more extreme. I initiated a free 90-Day Fraud Alert this week to try it out (through Equifax since they should do the extra work).


I already access my credit reports/ChexSystems/LexisNexis every 12 months, and I continuously monitor my own credit using the services listed above. Here’s a sample free alert I got from CreditKarma just the other day.


I then cross-referenced with a similar free credit monitoring alert from CreditSesame (TransUnion) that included more info like date and card issuer:


By the way, yes I decided to set up the free TrustID Premier service for the free Equifax locks. I know there was a lot of concern about the forced arbitration clause as part of TrustedID, but Equifax has since removed that clause. Also, I didn’t like how they made me come back to activate (without any reminder). Of course, even after being patient and coming back on my assigned date, they are making me wait some more…


How Much International Stocks In Your Portfolio? 2017 Outlook

globeHere are some updated thoughts on holding stocks based outside the US in your portfolio.

There is no “ideal” amount of international stocks that experts agree upon. You have numbers ranging from 0% (US only) to 50% (market-cap weighting). For a good summary of this situation, check out these two recent articles from Christine Benz and John Rekenthaler of Morningstar.

The world continues to change, and the market weights will change with it. Here’s an interesting infographic by Jeff Desjardins at VisualCapitalist about world GDP breakdown for the last 2,000 years. The time axis is kind of wonky from 1-1900, so I’d focus on just 1900-now. GDP is not the same as market value, but the point is that the world will not look the same in 30 years.


Right now, in terms of valuation, US stocks are relatively expensive and International stocks are relatively cheap. Via this ETFTrends article by Chris Konstantinos at RiverFront Investment Group, via TRB:

Looking a 12-month forward P/E ratio at the MSCI All-Country World Ex-US index, we are currently at the largest valuation gap between US and non-US markets in the 15+ years of data to which we have access.


My take: Pick a split and stick with it. I don’t feel too strongly about this topic. If a Belgian company buys Budweiser, does that change how the business works fundamentally? If you go with 100% US stock and wait 30 years, you’ll probably be just fine. If you go with 50% US and 50% International and wait 30 years, you’ll probably be just fine. One choice will do better than the other, but nobody knows which one. These days I’ll be happy if we manage to avoid nuclear war.

I personally like buying a bigger haystack with all the needles and thus I like 50/50. If you want to hedge somewhere in between, consider that Vanguard Target and Lifecycle All-In-One funds are 60/40 now but they used to be 80/20 and then 70/30. It’s more important that you pick something and stick with it, as opposed to bailing out when one does a lot better than the other.

In terms of psychology, you can always twist the situation as needed. If you are 100% US, you could be happy with US outperformance over the last decade. If you are 50/50, you can take solace in the valuation gap and that any mean reversion from this point onwards will lead to future international outperformance.

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