Friday, September 28, 2018

Expecting negative returns in 2018?

Are you expecting negative returns?
This year is on track to deliver the lowest share of positive returns adjusted for inflation across 17 major asset classes since 2008, according to Morgan Stanley. Too bad. Our clients have stayed with their balanced portfolios because we can’t predict the future of the markets. This is a snapshot of their returns so far:

Total Return Fund Long-term Return Longevity
YTD 2018*                              2017
10.2%                                      21.7% 500 Index                     11.1%* since 1976
 7.9                                           3.2% Energy                            10.7% since 1984
10.4                                          17.9% Extended Market          10.9% since 1987
13.2                                          19.6% Health                           16.5% since 1984
 3.5                                           42.9% International Growth     10.8% since 1981
14.3                                          29.5% PRIMECAP                 13.9% since 1984
10.5                                          16.1% Small Cap Index           10.7% since 1960
 0.1                                           10.2% Wellesley Income          9.9% since 1970
 3.1                                           19.1% Windsor                       11.5% since 1958
 6.3                                           16.8% Windsor II                    10.8% since 1985
 8.0%                                       19.7%                         Average 11.7%
*9/26/18                                   Average Annual Returns as of 12/31/17.

Is ‘interactive’ life insurance right for you?
Your annual physical is no longer enough for one insurer. Now they want your ‘lifestyle’ data on a continuous basis or you can’t be insured. Hancock says. The Hook: policy holders are incentivized to adopt healthy habits and pay fewer premiums. On the other hand, insurers may eventually use data to select the most profitable customers, while hiking rates for those who do not participate. And can we trust them to provide the discounts or even pay benefits? MetLife and other insurers stopped looking for beneficiaries so they could keep the death benefits. If the beneficiary does not keep in touch with the insurer, they lose. Life insurance is NOT an investment anymore.

Are you overpaying for car insurance?
This graphic shows the average costs per state for min and max coverage. Are you where you want to be? You may be paying for benefits you don’t need, like life insurance, towing, or full replacement. You may not have claimed all the discounts you deserve. Unfortunately, insurers don’t ask about the items you can qualify for since it reduces their commission. You have to ask to have life and health care insurance removed. If you have this coverage already, you’re wasting your money with a car insurer. Some add accidental death and disability insurance to your premium. Do you know when NOT to make a claim? If you don’t shop around, you never have the benefit of new client discount. Securing your discount adds up year after year.

Which Medigap plan is right for you?
Look closely at your supplement plan. Plan F will cease in 2019. The existing Plan G may be a better deal for you. Consult with your doctor and your records to see what you really need. Plan G provides the most benefits but at higher prices than others. For instance, you get limited foreign travel medical assistance included. Frequent co-pays get expensive. Can you switch to generic drugs? One agent says: “You save about $350 a year on premiums, so it makes no sense to buy F to cover the $183 deductible.”

 Is your Medicare Advantage plan denying service you’re due?
Auditors have found “widespread and persistent problems related to denials of care and payment in Medicare Advantage,” the report said. The fixed per-patient rates the government pays may give plans “an incentive to deny preauthorization of services for beneficiaries, and payments to providers, in order to increase profits,” the report said. Enrollment doubled over the past decade. One-third of Medicare patients are now covered by the private plans. In 2016, the plans denied 4% of requests to approve treatment before it was provided, known as prior authorization, and 8% of requests for payment after treatment. Only 1% of patients disputed the insurers’ denials. Most disputes changed denials to approve. Most plans provide additional coverage, such as vision, dental care, and prescription drugs.
Always dispute a denial: some plans reverse 98% of the time.

Who is this Mueller guy anyway?
He never speaks but his pen speaks for him. 35 so far. ‘Witch hunt’ has 191 criminal charges by this duly-authorized former FBI chief of the investigation. What happened to get Trump elected will require a simplified 2 hour movie to explain all that went down with this ‘Russia’r Trump’ thing. This investigation may be more important than the Nixon termination event. As happened then, our democratic principles are at stake. After all the voter suppression, can the people of America vote to put us back on track? Are our votes counted fairly? Can our Reps govern? Can the FBI do its job? Does donor money control every election? Do we outlaw all the money? How much power should the president have?
Will the middle class survive?

Is a ‘Retirement’ bond right for you?
The retirement bond would not pay back the principal; instead, after 20 years, it would become more like a deferred annuity paying a stable, secure income—but investors would get more bang for their buck. Martellini says the retirement bonds could be offered as transparent, low-cost products that are easier to get out of than a typical income annuity. Someone five years from retirement today, a 61-year-old, would be buying 2023 retirement bonds. The bonds would start paying cash in 2023, and continue paying for 20 years. If launched, the new retirement bonds could be offered in lieu of bonds or annuities to investors. “Annuities are opaque, costly and mostly irreversible unless you’re willing to pay high surrender charges,” says Martellini. Most retirement investors want security and a guaranteed stream of income, but they also want the flexibility to adjust their investments and their potential income stream over time. But most bonds lose value over time so buying a bond locks in low income payments.

How much emergency cash is enough?
Savings, CD, MM, credit cards or bond fund. Which is best for you? Some propose an employer plan with paycheck deduction like a 401k but with no penalties. Actually some can do this now with a Roth 401k. You get tax-free growth for life and you can take your contributions out anytime without penalty. A short-term corporate bond fund like VFSTX will rise with rates. CDs are tricky since rates are rising so keep away. Or perhaps your best alternative is a HELOC. If you have equity in your home, you can obtain a line of credit for rainy day. Home worth 300,000 and you owe 150,000 you may obtain 50,000. With no closing costs and interest charged (current 5%) only when you use the line, this a perfect ‘emergency’ fund. You can leave your retirement money alone to grow. As long as you don’t misuse this money, you won’t lose your home—HELOC is a 2nd mortgage.
Don’t fall for your broker/advisor illiquid products:

Do we go backward or forward with wages?
Most Americans say they are NOT benefiting from the $4,000 Trump promised. Most feel that Trump helped his class—giving us higher tax bills in the future to pay for all the cuts in revenue in the next 10 years. Corporations got to keep all their subsidies, grants and special financial deals. Average homeowners in CA, NY and NJ are not able to deduct their property tax so anyone with a single family home will pay more. Those who own the mansions have put the property in a legal entity to keep the deductions like The Don’s home in Trump Tower—all deductible. Because half of workers are not skilled they earn what they earned in the 1970s-80s adjusted for inflation. Plus health care costs rise and Obama subsidies were cut so many will go bankrupt with illness. We have no infrastructure works program that could employ those workers. Is going backward right for America?
Last time unskilled workers were left stranded, America did not abandon them. They got work building many village halls, dams, bridges, etc. We had hope because we were moving forward with a little help from the feds. 8.5 million of our fellow Americans had work and it paid off. Now most of the subsidy money goes to the wealthy class.

Another way the wealthy avoid their fair share
Trump’s new tax law changed the AMT—alternative minimum tax—so that many rich people will not have to pay it. Treasury gave us this tax after it was determined that 155 rich people paid no tax in 1966. Americans were outraged and Congress added a tax. AMT was born in 1979. Millions of rich people had to start paying their fair share under Reagan. Now Trump and his tax-credit class have got CPAs maximizing retirement contributions, funding a health savings account and making investment account adjustments where it makes sense to take the losses for use against gains. “After that, we go for increasing charitable contributions,” an observer added. You don’t need a CPA.

Homeowners in Dem states plan property tax limit workaround
New Jersey has set the rules for how residents can make an end run around the $10,000 federal limit on state and local tax deductions. Unfair treatment compared with other states is at stake. The average home in NJ is assessed $18,000 tax. Each jurisdiction can establish non-profits to collect taxes for education, fire, police, libraries, trash pick-up, road repair and other local services making them a charitable deduction. “If and when the IRS finalizes its rules, we’ll see them in court,” Attorney General Gurbir Grewal said.


Make America, “The Don”, Great Again

Two Americas: A Banana Republic? Do we really want an infant king? Daddy Putin!


Is Medicare for All the answer? Obama & Trump could NOT stop the rise in health care.
House on vacation again: no work no pay! Save $ millions—half are already millionaires.

Trump tax cuts went to the wealthy—some middle class actually pay more: voters wise.
Drug prices manipulated due to shortage and shortage created by drug firms: addiction.

Social Security sends email; NOT call for information—never give callers your info.
Non-bank lenders playing the same role as in 2007: could melt-down happen again?

Voya caught giving criminals passwords to 5,600 client data. Fined $1 million. Fees rise.

Half of cellphone calls scams: fake directed at most vulnerable of us. Feds do nothing.

Suicide by cop: Everyday people with guns kill co-workers and get cops to kill them.

Why is Trump surprised when the world laughs at his ridiculous narcissistic statements?
Trump: I fear #METOO Movement. “It’s happened to me many times.” “I grab p__y.”
$73,000 driving for Walmart: Congress changing law to age 18?
Are you sure you want to keep out all immigrants? She is 7 and the next generation.

Who owns your account now?
Identity theft protection is free: Freeze your account so thieves can’t buy in your name.
What to watch to avoid cyberattackhack/theft: think like hacker—what can go wrong.
Genetic test: insurers can use it for genetic discrimination : results vary by company.

Your business self-insured for health care? Cut out the middle person.
OppenheimerFunds to Invesco Ltd.

A tiny clip in your heart can save you but it costs $30,000: doctors/hospital extra?

Good Samaritan helps stranded car but then evil comes.

Two heads are NOT always better than one. Anything can happen and does.

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