hi, everyone. welcome to "on the money." i'm becky quick. protecting your retirement. the wild moves for stocks and what you can do to keep your 401(k) safe. six years later a checkup on obamacare. what's working and what's not for the massive health care plan. the next drug breakthrough. can we beat cancer and alzheimer's and fight chronic conditions? and the booming business of boutique fitness and how it's changing the way we exercise, eat and dress. "on the money" starts right now. china's stock market plunges and the price of oil tumbles and how high will interest rates go? you might say so what about

these three events but they all matter if you have a retirement account because they are combining to send the u.s. stock market on a scary ride and rough start to the year. that's our cover story this week. it's been a volatile week for the markets. to put it mildly, the dow and s&p 500 began 2016 with their worst start to the year ever. the nasdaq had its worst beginning since 2001. what's behind the worry? first off china. on monday u.s. markets began selling off after china's stock market plunged nearly 7%. a pattern repeated during the week. china is the world's second largest economy and its slowdown has ripple effects all across the globe. second, there is a worry about crude oil prices which fell to 12-year lows. that's connected to china because china imports oil to keep its economy going. while lower gas prices seem like a boon for consumers the u.s. economy is dependent on oil production and it resulted in job losses for more than 83,000 u.s. workers as nearly two-thirds of american oil rigs

have been decommissioned just in the last year. another factor weighing on the markets the federal reserve, on wednesday, the fed released the minutes from its december policy meeting when it raised interest rates for the first time in nearly a decade. the minutes revealed concern that inflation would linger below their objective and most people expect several more interest rate increases over the next year which could slow down the economy. and one more factor, the u.s. dollar growing in strength which seems like good news, but that could make u.s. goods more expensive for foreign countries to buy and that could hurt u.s. businesses. it's been a wild week with the dow setting the rather unfortunate record of the weakest start to a trading year ever. nothing causes people to worry about moaning than dramatic moves in the market. joining us is sharon epperson on how to navigate the volatility because, of course, it's your money, your future. sharon, people wake up and see the first few trading days of the year with dramatic losses and probably their natural instinct is to think i should

sell my stocks and stock funds and get out until we see where things land. you say that's the wrong thing to do. >> you think about the great depression or recession, look at the returns in the subsequent five years. you want to be a part of that action when the stock market comes back so taking the money out is not a good idea. you never know when to time it to get back in. you can't. >> is that a way of kind of saying, you should never look at what's happening with the averages, just continue to sock things away or is there a moment to put in double what you've been putting in? >> it's best to have a plan. that's the first place to start and to figure out -- a great time to do it now at the start of the year. how much you need to put away and how much you're going to put away, set a course and stay that course, that course needs to reflect your time line, when you want to retire, how long you want to be retired and reflect the risk tolerance, how much of a drop can you stomach and how much can you afford to take to meet your goals and willing to

rebalance when you need to to make sure your portfolio has the right allocation of stocks, bonds and other as set classes. >> what do you do to try to keep your emotions in check? it is a pretty emotional -- highly charged emotional thing when you see stock markets fluctuate. >> it is very emotional. the thing i like when this thing happen, you know and you say, why would you like to see a stock market drop? it makes people pay attention so now that you're paying attention, don't panic but make sure you have a plan. talk to a financial adviser. make sure that you have decided what your goals are and then come up with a strategy >> that's what i would think. everybody has a retirement plan that they're thinking about. it may be different your reaction should be different in your 30s and 40s and 50s. >> it's important to talk about it as a retirement plan. some people have investments for other reasons. if you need money in five years, you don't need to have it in the stock market at all. if you have a short-term goal like buying a house or start investing in a business you may want to have your money in conservative investments and not

as much in stocks. when you talk about retirement this is a long-term perspective and think that way. if you are a young investor, you need to be really aggressive right now, fidelity came out with a potential scenario of what it should lookic 85% should be in the stock market. >> what's young. >> young if you're in your 20s, early 30s, just starting to invest. that's where you need to have your money. mostly in the stock market and in a mix of u.s. stocks and foreign stock, as well, 15% or so of that money should be in bonds. when you're midcareer talking about 30s into the mid-40s, you need to focus on growth and have 70% of your money in the stock market. a mix. 5% or so in short-term investments and the rest in bonds. >> what happens when you get into your 50s or 6s and start heading towards retirement. >> here's the part that people probably aren't going to believe. you should still be heavily invested in the stock market. you should have about half of

your portfolio in stocks. it sounds really scary but think about life expect ed to live. part of your portfolio has to have that growth aspect to it so a balanced portfolio is 50% stocks and the rest will be a combination of bonds and short-term instruments like money markets. >> i like that. sharon, thank you very much. >> my pleasure. now here's a look at other stories making news as we head into a new week "on the money." a strong jobs report for december, the economy created a better than expected 292,000 jobs and numbers for previous months were revised higher. the unemployment rate held steady at the seven-year low of 5% and earnings fell by a penny. what a week for the stock market and don't need a good one. the dow had its worst four days of the year ever with a decline of more than 5% thursday and

same of the s&p 500. nasdaq fell 6% hitting a three-month low with worries about china taking center stage. stocks continued to fall on friday. auto sales had hit a record high with americans buying 17.5 million vehicles in 2015. that broke the mark set 15 years ago. pent-up demand and cheap gas lent to that. the affordable care act enters year six. are americans healthier. an obamacare checkup. drug prices keep rising but are drug companies investing in new medicines that could help millions or just new versions of old drugs to make millions?

in march it will be six years since the affordable care

act became the law. is obamacare making health care more affordable as intended? faced with premiums and higher deductibles some patients aren't so sure. bertha coombs has the story. >> reporter: michael chadwick is all for obamacare insurance but the 32-year-old manhattan realtor says paying his premiums have been a challenge. >> initially when i signed up for obamacare i could not keep up with the payments so i had no health insurance for the remainder of 2014. 2015 is when i started really doing well and business began to pick up. the affordable health care act doesn't take into account small business owners, may not have consistent income. >> reporter: 11.3 million americans signed found are 2016 exchange plans by late december. still below the original 20 million expected to sign up by year three of obamacare. costs remains an issue. >> many middle income people continue to suggest that exchange plans just aren't

affordable for them even with the subsidies they simply can't make the monthly premiums work. >> reporter: while consumers see high prices insurers are seeing high costs from enrollies who tend to be older and use more medical care. a dozen nonprofits in 15 states are out of business after two years of big losses and the nation's largest insure united health may not next year. >> companies are taking pricing actions and doing administrative things and doing medical management things. what we're going to know next year what works and what doesn't. >> reporter: a budget deal delay of some obamacare taxes could help with prices in 2017. but the real key is getting more healthy people to stay enrolled. >> i'm paying a little per month for peace of month so my jewish mother can sleep at night. >> reporter: the penalty for not having it in 2016 goes up to $695 or 2 1/2% of your income,

whichever is higher. open enrollment ends january 31st. in new york, bertha coombs "on the money." >> continuing our obamacare checkup let's bring in dr. kenneth davis, the president and ceo of the mt. sinai health system. he runs a seven-hospital network in new york city and dr. davis, always good to see you. >> good to be back. >> what's the truth? we have venus about rising premiums. higher deductibles. is obamacare working or not? >> reality is what you showed. the premiums are going up, deductibles are higher. and that's a problem. reinsurers are leaving the risk pool. what it's all about is not enough healthy people have signed up. the reason not enough healthy people signed up is penalties are rather minimal. the this year they rise enough perhaps that more healthy young people, those people ages 25 to 35 will join. you know, they diminish the cost of insurance by distributing it over a larger population and if

we don't have roughly the estimate is 35% to 40% of the risk pool being that age, 25 to 35, it gets -- the whole insurance system becomes in trouble. >> what percentage of that population is signing up right now. >> right now it's about 26%. >> bertha's piece mentioned unitedhealth is talking about potentially dropping out of obamacare. we've also heard about some of these megamergers from the big four in the industry all gets together. what does that mean and what is the dropout potentially of others mean for prices next year. >> obviously there will be less competition and that's a problem. in some markets that's really a problem because there can only be one insurer. so the ftc really as to look at that market by market. >> we know that as a result of obamacare you're nowing look at an uninsured population closer to 10% and that's the lowest we have seen since 1972. that's the good news. aside from that what do you think needs to be fixed. >> what we've really got to do is ask ourselves what are the

drivers of health care expenses and how are we going to curtail that increase? and part of the problem is the 25% of medicare dollars is spent in the last year of life. and we still have done very little to change the way we approach end of life care. advanced directives are helpful but what we often find as patients get end of life diseases there are no advanced directives so sit around and say, gee, i guess we got to do everything. >> frankly, it's a conversation just from our own personal experiences it's a conversation you usually don't have until the midst of things and that's a difficult time emotionally. >> it's too late then and we don't want to ask hard questions like should a condition for being in the medicare program be that you have to give us an advanced directive when you sign up? that would change everything. >> you know, you look at one of the huge health care costs and it's got to be drug prices too. that's been front and center and see turing and martin shkreli

and valiant. you understand for research and investment drug companies need to be able to charge a certain price. how do you find the happy medium between what's fair and how you get the patients what they need. >> this is a complex problem. the rest of the world regular lays their drug prices. we don't in the u.s. the consequences that our market is the market where the companies have to generate profit. we have to recognize there for that this is a trade issue. when we sit down with nafta and sit down with the eu and we sit down with the pacific rim we have to say, we can't be the only place in the world that is giving these drug companies return on investment. other issues, though, have to do with -- >> before we move on from that, i mean that's a different argument than some say. some say we need to regulate because everybody else does too. you worry you shut down any sort of research and development. any innovation that comes with it. what you're saying is telling other countries they can't

regulate drug prices either. >> or have to be much more generous in what the margins are and sit together and say what's an appropriate return on investment and what's necessary for the infrastructure of the pharmaceutical industry so that they can be innovative and how can the world afford this, not just the u.s.? >> over the last year i think there were 45 new drugs that were approved and that's great news but many of these were for very specialized diseased, very rare diseases and i wonder what kind of progress we're making when it comes to chronic illnesses like a diabetes. >> this is the most important question. because the other way we bend the cost curve is with breakthrough they are put 't put 'tissput 'ti -- therapeutics. the diseases that stand out type 2 diabetes and alzheimer's disease. we don't have adequate incentives there compared to what we have for orphan drugs or things called biologic, antibodies infused so we have encouraged companies to take a

business model that doesn't develop the most important drugs. >> and i think the fix for that is a longer -- a longer sort of discussion but is there something quickly that -- >> i think in the 21st century cure act it would be very helpful if we had an extended market exclusivity for any drug, for instance, that altered the course of alzheimer's disease because alzheimer's clinical trials will take so long done right that the patent life that will be left on those compounds will be so short that we're going to be dealing with drugs of enormous expense or drugs that simply won't be developed. >> dr. davis, it is always a pleasure to see you. thank you very much for taking the time to come see us. >> good to be here. up next we are "on the money." the booming business of slimming down and staying in shape. sweaty old gyms fighting the shiny new fitness boutiques. we'll talk all about it. right now as we head to a break, take a look at how the stock market ended the week. look out below. the flu virus.

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if you've been to the gym lately you may have noticed it's more packed than usual. of course, the annual new year's resolution crowd is there focused on weight loss and getting in shape. now there's an even broader choice of where to go and how to work out as the big business of fitness gets even bigger. morgan brennan joins us right

now with more. morgan. >> hi, becky. i call this the fitness economy. a new era of studio based exercise that fueled a fashion trend, a shift in food preferences and where the sound of grouptsing is being replaced by the sound of music and profits. thumping music, mood lighting. celebrity trainers. and an average price tag of $30 per class. >> here we go. >> beteen fitness, the new way to work out and in cities across the u.s., business is booming. the international health racket and sports association says growth in health club memberships has been outpacing growth in the u.s. population largely driven by beteen studios. 32% of users is up. soul cycle, the indoor cycling company with a cult following and plans to go public this year but it isn't alone. competitor fly wheel has nearly three dozen studios where

customers take choreographed spin workouts and compete on performance. >> in a short time of i'm an immersive workout experience with highly trained instructor and music. >> reporter: it claims 21 outposts, barry's and also has aggressive expansion plan. >> we have a pretty exciting trajectory ahead of us. i know we want to get to at least 50 stores over the next five years. >> reporter: the studio cost mod models coulds 50% to 100% more than market average and inspired athleisure. stretchy yoga pants and $100 hoodies that can be worn to break a sweat or get with friends since launching in 2014 it opened five brick and moretore locations including this three-story fifth avenue flagship which even has a studio where well-known instructors will teach classes. also helped fuel a culinary

craze. while food sales were flat in 2014, neilson says foods labeled with health attributes like gmo free jumped 13% meaning getting in shape may increasingly mean getting financially fit. tried a number of these classes, they are not for the faint of heart. but it is easy to understand why this has become so popular and created a culture of fitness fashionistas that are willing to pay $30 an hour. fly wheel has seen sales in dude joes that have been open for more than a year increase by more than 30%. if this whether a publicly traded company that would be incredible growth. >> you are a braver woman than i many a. i stick to the old stinky gyms myself. what about these new high-end fancy gyms. what has it meant for the older gyms? >> that's been one of the biggest questions. some more traditional big box gyms continue to have the dominant piece of market shares but when you look at where the

fastest growth is coming from, it is these small boutique studios. one other thing we're seeing happen is essentially the bifurcation of the fitness industry, people willing to spend $35 for one of these classes a couple times a week but then they'll do the $10 membership at planet fitness. >> you get a little bit of everything if you do it that way. morgan, thank you. up next "on the money" a week at the news. and the new york city pay phones believe it or not still exist and they are getting an upgrade.

for more on our show you can go to our website, otm.cnbc.com and follow us on twitter @onthemoney. the detroit auto show kicks off monday and see the latest high-tech gadgets. those were the days. tuesday marks the 45th anniversary of the debut of "all in the family" which was number one for five consecutive years. on wednesday the federal reserve will release its beige book, that's a regional report on economic conditions. friday we'll get several economic reports starting with retail sales for december. and we'll also get a look at inflation with the ppi, that's the producer price index. new york's public pay phones are going free and wireless. testing began this week at ten phone booths across new york city as they were turned into wi-fi hot spots. the 9 1/2-foot tall hubs called

links will have android tablets that will make phone calls for free. we'll see how long those last on the streets of new york. users can also access the free wi-fi with their own devices. over the next several years the city plans to install 7,500 hubs across the area. oh, and need a battery boost? don't worry each hub comes with two usb charging ports. again, we'll see how long these last. that is the show for today. i'm becky quick. thank you very much for joining me. next week, shopping for insurance from home to car to life. how to make sure you get the most for your money. each week keep it right here we're "on the money." have a great one and i'll see you next week.

remember us. it has been a while. but we're back. and here is the silver lining. at least the stock market is closed at this point. these guys, they're going to make some sense of the markets. while they are getting ready, here is what is coming up. ♪ everybody was kung fu fighting ♪ ♪ those cats -- >> that sounds like stock this week and there is one down stock that is signaling even more pain to come. we'll tell you the name and teach you how to protect yourself. plus, down on apple. well, how would you like to make your money back for less than a buck? we'll show you how. >> check myself at all times. and we have a to do just that for your whole portfolio, the action begins right now. ♪ american woman