this is "nightly business report" with tyl sue herera. good evening and welcome to a special edition of "nightly business report." i'm tyler mathisen. >> and i'm sue herera. well it is mid february and for much of the country mired in deep freeze thoughts are turning to spring just about a month away now and while spring is usually a time for warmer weather, it is also an important time for finances. >> that is very true sue. tonight, we'll take a look at some things that come into play in the spring and could have an impact on your money from your taxes to selling a home to pruning your portfolio. >> and that's where we'll begin tonight. your portfolio. the first month and a half of 2015 has been a volatile one. we've seen moves like the dow losing nearly 4% in january only to recapture most of it in the first week or so of february and

as dominic chu tells us, these kind of moves can make investors nauseous. >> reporter: after what seemed like a relatively calm upward trend for stocks throughout much of last year the roller coaster ride came roaring back in just the first month and a half of the new year. larger cap stocks as represented by the dow and the s&p 500 are for the most part flat year-to-date. but dig a little deeper and you can see where the angst is coming from. the dow at a triple digit point move up or down for two-thirds of all trading days so far this year. and the daily trading range for the dow has been a triple digit move between daily highs and daily lows almost every trading day this year. now the caveat here is as the dow grows in size the relative percentage move related to triple digit swings diminishes. still, it's been a rough ride for some investors who try to follow every tick. a number of factors have contributed to the volatility

and could continue to do so in the coming months. first, uncertainty in the u.s. and abroad. can growth continue and job gains be sustained? speaking of europe what happens if greece can't manage to work out its debt situation? will a fear of a greek exit from the euro zone roil the markets? and then the oil prices taken a toll on energy companies and many announced job cuts and plans for less investments and then of course the federal reserve, another wild card. will it or won't it raise interest rates later on this year and will that add to the volatility? those are just a handful of the many variables that are affecting the markets and now investors are facing a choice. either stay the course or become a lot more active in managing their portfolios. for "nightly business report," i'm dominic chu. >> all that volatility it's bad for investors, right? well our first two guests tonight here to bust the myth.

they say volatility is a good thing for long-term investors barry glassman president of services and founder and ceo of financial fountains. welcome to both of you. let's begin with you. you maintained a little volatility or a little more volatility is a good thing because it reminds us that investments come with risks. to me, that feels a little bit like sg putting your hand in a fireplace is a good thing because it reminds you that fire is hot. >> well i wouldn't go to that extreme. the big question is why do we have volatility today? now, dominic brought up great points as far as the plunging oil and uncertainty as far as greece but we've had those kind of moves before. what i tell my clients is this. when my kids have been bowling, they've had these bumpers controlling from the ball going gutters and what we as investors have had are these bumpers that are controlling the wild swings within certain markets. we've had opec keeping oil prices somewhat stable.

we've had the federal reserve buying bonds more and more keeping interest rates low and we've had countries keeping currencies stable like switzerland, for example. what we now have tyler, is free reign. we've removed the bumpers and once you remove those, well we're now watching the markets react to what people are willing to pay. >> from gutter balls. >> yeah. well i'd rather gutter balls than burning your hand in a fire as an analogy but this is here to stay and this is why we have volatility. >> so if it is here to stay, one, do you agree with that and two, how do you manage the volatility or harness for your clients' benefit? >> whether it's here to stay i can't exactly say but certainly i encourage my clients to stay the course. we look at their allocations early on in the relationship and

we just encourage them to keep to what works for them. and if we're thinking about the last six weeks or so that is short-term thinking. we're looking for the long haul. >> which i guess you want to know barry, whether an investment is too volatile for you or not and as you say, if you take the bumpers away you'll learn pretty quickly whether you're comfortable with what you've got or whether you're comfortable with the overall variability of your portfolio and that is a good thing. >> it is. we saw a 9% decline in u.s. stocks back in october. we saw 4% to 5% decline earlier this year and we've recovered quite nicely from the two drops. that's a great test. it's a great example of what can happen and then some to some portfolios. so encourage investors to do two things. one, assess risk now. you don't want to build a sturdy ship in the middle of a storm in

the middle of the sea. you to do it before you enter the water. take a look at risk now. now is the time with the market a few percentage points off the top to reassess risk. number two, ask your financial advisor for a risk measurement of the portfolio. a lot of advisors have these and keep these measurements internally. you ha in order to get those kind of figures. >> so lisetta, how would you achieve the diversification that's necessary? what are the tools you use to either mitigate volatility or use volatility and assess the appropriate risk for your clients? >> you know, the strategy i take is really looking at different asset classes. you know from equities looking from domestic to international. there's a discussion about what's going on here at home and abroad and also looking at fixed income as well. there are conversations about commodities, oil, haven't talked about greece and their performance.

what i l to do with clients is making sure their time horizon, how they feel about the market swing. we can look at the analytics all we want but sometimes it's how a person feels with the swings. sometimes you have to make their adjustments to the asset classes that maybe show more volatility during a certain period of time. so really really encourage clients. >> do you ever hear from some clients that they actually want to trade the volatility? we hear from phrase from time to time that when there are volatile situations that's a point at which people with strong stomachs can actually make some money. >> it really depends on the business model. so for, you know, the clients i serve, middle america, there are a security out there. b.i.x. that some people follow but for my clients, they're more traditional. they're looking at the indices and what works to meet their long-term goals. >> barry, how do your clients in

general feel about the market? we hear that the retail investors have been somewhat underinvested in the market either a lack of trust or worries about what's going to happen next with earnings or what's happening in europe. do your clients feel comfortable with the parktmarket or not? >> you bring up a great point and as lisetta pointed out, what a traditional portfolio looks like with a lot of commodities or stocks things that have extreme volatility and then fixed income that's paying very little and a lot of it has interest rate risk. we're addressing it by adding a lot of the stuff in between. the risk and return in between stocks and bonds. things like hedged equity or long short, high yield bonds, both corporate and municipal bonds and such. we add things in the portfolio not necessarily taking from stocks and running to cash and bonds and vice versa, that's a challenging exercise.

we like things with risk and return in between and add that as a complement to both fixed income and the equities in the portfolio. >> interesting tactic. thank you. barry glassman services and lisetta rainy braxton with financial fountain. up next in less than two months the tax man come et. and this year he cometh with a new challenge for taxpayers. with 59 days to go before april 15th the irs tells us

this year's tax-filing season is off to a strong start, a strong contrast from last year when the government shutdown led to a two week delay to processing returns at the irs. hampton pearson looks at what's emerging as the biggest challenge this year for both taxpayers and the irs. it's the affordable care act. >> reporter: millions of americans filing online in anticipation of getting refunds have helped jump start the tax filing season. more than 14 million returns already filed, 13 million electronically as of january 31st. 7.6 million taxpayers getting refunds worth about $27 billion, the average check about $3500. however, the biggest headache this year for taxpayers and the irs, compliance and enforcement of the affordable care act. as many as 6 million people may pay a first time penalty for not having health insurance. $95 per person or 1% of

household income whichever is greater. it's a lot more complicated for the estimated 8 million americans who purchased health care coverage through those government exchanges. it turns out they may owe taxes on the government subsidies that went to the health insurance companies. there's already a stampede to professional tax preparers but the same professionals say this year at least they don't have all the answers. >> we have to see how this plays out. some people come in we had a day early in january where we just answered questions. people try to figure out what to bring in. i told the analysts and a lot of investors this will play out over a couple years. >> reporter: questions for the affordable care act is trending heavily on the irs web site which is accessed more than 65 million times so far this year. 50% more hits than the same period last year. but taxpayers have a much better chance of getting answers online

than on the irs toll-free hotline. >> how may i help you today? >> reporter: john costkin told lawmakers about half of the anticipated 100 millionil calls for help won't get through. congress has cut the irs budget by more than a billion dollars over the last three years, while adding new enforcement mandates including the affordable care act. >> it clearly is going to be a difficult filing season and the service is going to be if not miserable, abysmal. whatever it is, it will be the level of service none of us believe taxpayers derf. >> reporter: the irs commissioner said the budget cuts mean delays processing paper returns this taxpayer season and a setback in efforts by the u.s. to curb tax fraud triggered by identity theft. for "nightly business report," i'm hampton pearson in washington. >> and joining us now to talk more about the 2015 tax season is david prokuschek.

we heard it's a strong season so far. >> the irs opened early this year up 20% year over year. the other thing that's good is refunds are up. hard working americans look to get the refund up 10% or so. so off to a really good start. >> what is the biggest difference this year and how big a problem is the affordable care act going to be? >> so affordable care has been talked about a lot and one of the biggest changes to the tax law this year but what we're seeing is a little bit different than what's been reported. about 25% of the people are actually being impacted so what we're seeing right now is about 15% of the people that are surprised they actually owe a penalty. >> how big is the penalty? >> you know about half of the people are modest. about $95 but the other half are $95 to $2500. >> people who did not sign up for a health care plan and therefore, have to pay a penalty, a tax penalty. >> it's the law of the land and folks are supposed to sign up. the other surprise is we find

half the people who signed up we find them in exemption. it's paying for people to come in a tax office in case they didn't sign up. there's loopholes. >> the 401(k) limits have changed. that's another big change isn't it? >> it's never too late to save for retirement. ira rks iras you take advantage of. extra. and next year 401 limits put another 6500 as well. >> the aca compliance is it an honor system? i haven't seen the 1040s. say, oh yeah i've got insurance or put down the policy number. >> it's self-compliance this year. so 100% of american haves to tell the government whether they have health care or no 75 of us we check a box but the 30 million or 40 million. >> are going to check back? when they match income they get a statement from your employer

or your bank but are they? >> they are checking. one of the big concerns is people having to pay back credits and all of that but looks like that's not the big problem right now. the bigger p people who just didn't sign up for the health care at all. so it is an honor system this year but they're going to be checking closer. >> maybe not next year. >> maybe not. so we help people sign up for health care. >> talk about tax brackets and how they're changing for this tax year. because that will affect an enormous number of people. >> the tax brackets this year there wasn't that many changes around tax brackets. that part of the code stayed steady. what has changed, as you mention, the irs and the 401(k)s, other detuxductioneductions. >> what about the earned income tax credit your ability to claim for elder care expenses and things like that? if i paid elder care expenses does that person have to be a dependent of mine to claim snit. >> they have to be but it's the biggest overlooked deduction.

a lot of us care for aging parents. there's $2100 credit for that if we pay for that for day care or elder care and also deduct all the expenses writingriding the taxi to the doctor. all of that. >> but i have to cla them as dependent. >> you're allowed to as long as you're taking care of them and that's a loose definition. that you can claim them as a dependent, almost like a child and you can get dependent credits of $2100 as well as the deduction for the expenses. >> what other deductions are normally overlooked? >> there's a lot and i think that's one of the reasons. >> i'm taking notes. i'm taking notes. >> one of the biggest ones i would say is a lot of working moms miss they file the wrong head of household deduction. so it's often overlooked. a lot of single women in particular don't file head of household and leave about a thousand bucks on the table. that's an easy one to check. one of the other things get overlooked is earned income credit themselves. there's $6200 available out there for folks making less than

50 grand and one in four people don't even know they're eligible. and so one of the reasons we want people to check with the tax pro. >> are there any changes this year with respect to investment taxes? i know there was obviously some of your investment moneys that were subject to tax or income so forth. >> dividends and interest all of that are treated basically the same this year. and then really, it comes back to the iras and the 401(k)s. but no changes. >> thank you so much david. nice to have you back. >> i feel better now. >> glad to be here. >> feel better about it now. jackson hewitt tax services. ty? tax season with another challenge. fraud. warning the public to be aware and out with dirty dozen tax scams for 2015. topping the list aggressive and threatening phone scams. agency said to beware ri have

their license revokes, have them deported or arrested. irs never give out money or personal information. for the complete list of tax scams, you can go to nbr.com. still ahead, the busiest time of the year for the real estate market surrenderis under way. will there be enough supply to meet all the demand? that's much of the nation may still be in the icebox but president's day weekend marks the official start of the spring housing

season. at least according to realtors. historically the biggest season for sales. diana olick takes a look at whether that's the case this year. >> reporter: all real estate is local, but the national housing market is facing a common dilemma. >> our biggest problem, we don't have enough apartments to sell. >> reporter: from manhattan co-op to california cottages coast to coast, there are just not enough home sellers to meet potential buyer demand. >> a lot of homeowners don't believe that they're going to be able to qualify for a loan for their next house right now. and so they more or less voted themselves off the island. >> reporter: while mortgage rates are low and there are more lowdown payment loan options for buyers credit conditions have not changed. >> credit is still about twice as difficult to get as it has been historically. >> rep on top of that there are 7 million to 10 million borrowers who still owe more on their mortgages than their homes are worth and millions more who don't have enough equity to manage a move up. a lot of folks may want to sell

but they can't. there is one glaring exception to all of this. miami. which has the opposite problem. thousands of new condominiums are hitting the market. >> there are pockets of the miami side that cause some worry in my head. >> reporter: largely because foreign buyers who make up half of the clients are facing all kinds of currency troubles and losing purchasing power. pete peterz zaluski said they're paying less. >> they're not as prevalent as they had been. >> reporter: back in the rest of the nation realtors expect to see supply increase in the next few weeks as the selling season begins. >> so it would be great to see lower end inventory in the market and if the 6,000 or so units come on over 60% of them or what we call the non-luxury segment. >> reporter: but most admit it won't be enough. not to send sales back to

seasonal strength. for "nightly business report," i'm diana olick in washington. jed kalko said the spring selling season will be a good one but not without challenges. thank you for being with us. i ask you a question but can't answer it "it depends on the market" but broadly speaking who's going to have the advantage this spring season, buyers or sellers? >> in most cases, it's going to be more of a seller's market but not as much of a seller's market as last year. i expect we'll see more inventory coming on the market and from the perspective of buyers they're going to be fewer investors and all-cash buyers to be competing with. still a seller's market but not as extreme as last year. >> we've also seen interest rates creep up a little bit, jed. does that goose those reluctant buyers off the couch because they want to get in before interest rates go anymore to the upside or does it cool the market off?

>> it's very hard to predict where interest rates will go week to week or month to month. it's hard for consumers to do or economists to do. the bigger point about mortgage rates, it's low with historical standards. it's incredibly low and for many people buying actually looks quite affordable compared to renting because rent has gone up this period of the housing bust in the recovery. >> but some of the first-time buyers jed, as i understand it and diana olick reports rather frequently they seem to be reluctant to get off the couch and go and buy. the millennials are the classic case of this. are you seeing that in other words, are would-be buyers people we woulded used to think are they hanging back and staying back longer than in the past? >> i don't think 2015 is the year of the first-time home buyer. they are still getting back on their feet in the job market. the picture is better now than from a year ago but the

likelihood a young person has a job today is still only halfway back to normal than where it was during the recession. a lot of folks still live with their parents and when they move out, they're going to rent first before they buy. so homeownership is still a few years away for many of the young adults many of the millennials. >> you're in one of the hottest markets in the country, san francisco. and one of the issues has been in many parts of the country the availability of credit qualifying for credit. how does that landscape look to you? >> well here in san francisco, the biggest challenge is actually affordability. even among people who can get credit. prices are so high relative to incomes and we build relatively little housing that it keeps prices expensive. now, credit of course is a big challenge not only for would-be first timers but also for people who lost homes to foreclosure during the housing bust. and wanting it back into the market. there have been some moves from washington to make it easier to

get a mortgage. easier access to lower down payment loans but saving for a down payment, they're big obstacles to buying. >> i'll put you on the spot. name some markets you think this spring are going to be markedly hotter than they were a year ago and by contrast ones that may cool be relatively cooler. >> i think that big changes we're seeing right now is that some of the markets that were a little bit slower in the housing recovery now have hit full stride. many of the markets are in the south, some in florida, even some in the midwest. the markets that are going to be a little bit slower than last year at least in terms of the big price increases are some of the boom and bust markets that saw big price declines then a strong price recovery over the past few years and now have come a little bit more back down to earth. places like southern california

phoenix, las vegas. those are the places that won't have as crazy a market as we saw in the past couple of years. >> and yet the high end luxury market seems to be doing pretty well. >> in many cities still strong demand. especially in the luxury side. we're seeing new home construction involved larger and larger homes. so there's still demand on the luxury side. it's really at the lower end of the market. we see the greatest tightness in inventory. folks who aren't looking to buy an affordable home in some of the markets are the people who own some of the biggest challenges in the housing market. >> all right, jed. thank you very much. very thorough explanation of what to expect this spring in housing. jed kolko with trulia. >> thank you very much. for the new home buyers and homeowners as spring nears, people tackle projects like renovations and landscaping. and that's good news for companies like home depot and

lowe's. home depot will add 80,000 workers for spring selling season which is its busiest time of year and that matches the number of people hired last year for its part, lowe's will add more than 30,000 seasonal workers. that's a good thing. t sign. people fixing up. >> that does it for this special edition of "nightly business report." i'm sue herera. thanks for watching. >> thank you as well from me. i'm tyler mathisen. have a great evening, everybody and we'll see you .

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