health, life insurance, protection, risk management

The Benefits to a Healthy Diet: Quality of Life, Financial Security and Legacy

Its no secret that human longevity has been growing due medical advances over the past 30 years. Life expectancy in 1960 was 66 for men and 73 for women; in 2010 the average expectancy was 80 for men and 84 for women. (1)

However, in addition to longevity, one of the issues people have struggled with is a decreased quality of life in a person’s later years. Chronic diseases play a major role in limiting peoples experience and inflicting pain on the elderly and their families… cancer, strokes, dementia, respiratory, Parkinson’s, Alzheimer’s. 

These issues not only reduce a person’s enjoyment of life but affect their financial health as well. The expenses associated with medical care and long-term care are substantial. But baby-boomers are not sitting still…

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economy, interest rates, retirement, risk management

Market Risks and the Wall of Worry

For years, one of the biggest issues facing the economy has been excessive debt and leverage. Yet even with these problems, prior to COVID-19 it was commonplace to see headlines in the financial media that read…

“Current Bull Market Continues To Climb A ‘Wall of Worry’” (1)

The “wall of worry” is one of the phrases frequently used to illustrate the resistance or fear of investors to invest in a stock market that had earlier gone down.  Since the Great Recession of 2008 and the financial crisis many investors have worried about the possibility of another financial crisis.

In a 2018 conversation with clients I was asked about a recent stock market pull back and if a problem in the market… could cause another financial crisis. This was an issue that was on many people’s minds these days.

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economy, entrepreneurship, health, key man insurance, life insurance, protection, risk management

Protecting your business, and your legacy

Most business owners, CEOs and executives are laser focused on driving their business or enterprise towards success. They are responsible for preserving and expanding sales and revenue. They are responsible for hiring and firing. They are responsible to investors and stakeholders to manage risk and ensure success. They handle client relationships, research and development, marketing and IT… As leaders they wear many hats and carry a lot of weight on their shoulders.

But what happens when a CEO or leader within a company passes away? What is the impact on the business and the employees who depend on that business for their livelihood?

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economy, income, interest rates, retirement, risk management

Are Bond Yields Moving Higher?

On October 3rd, 2018 the 10-year yield moved dramatically higher increasing 3.3% in a single day. Pundits have listed many reasons for rates and bond yields to move higher… a strengthening economy, decreasing unemployment, rising oil prices signaling inflation, a Federal Reserve committed to further rate increases into 2019. (3)

These pressures had been building for some time and signaled a good economic environment.

However, there are a few factors that some view as critically important moving forward in deciding how much bond yields could move up as well as how quickly.

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economy, retirement, risk management

Tariffs, Trade Wars, and Risk

“All things being equal, trade is a good thing, although it can also eliminate certain jobs and hurt some firms or workers. On balance, though, trade creates jobs and boosts the overall welfare of a country… Trade can be an engine of increased production, economic growth, development, and poverty reduction.” (1)

–Richard Haas

In 2018 I had several clients ask about what impact the proposed trade tariffs might have on their retirement plans.

On June 19th, 2018 the S&P 500 sank the most in three weeks with industrial companies getting hit hardest after President Donald Trump threatened tariffs on another $200 billion of Chinese goods, and the Asian nation pledged retaliation. (2)

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Climate change, economy, environment, retirement, risk management

Climate Change, Sea Level Rise and Retirement Risk

One of the oft repeated risks from climate change is the threat that comes from rising sea levels. Depending on the forecast, even in the most optimistic ones, seas are projected to rise several feet before the end of the century. With the accelerating build-up of CO2 and the rate of temperature increase (2017 being the hottest year on record), many expect dramatic sea level rise to occur much sooner than most expect. CO2 concentrations in March 2020 was 414.5 ppm, much higher compared to 411.97 ppm in March 2019. (1)

 

While people might want to buy shore property for benefits that include potential rental income, capital appreciation and personal use, they also face potential risks of hurricanes, sea level rise, etc. Some of these risks can be mitigated by purchasing flood insurance.

 

Last summer I explored the question, “if sea levels rise, what will be the impact on a clients’ net worth and portfolio?”

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health, life insurance, protection, risk management

Protecting Your Family’s Financial Future in an Age of COVID

As of August 5th, 2020 COVID-19 has claimed 156,311 American lives. (1)

In a story that is far too common in 2020, a Las Vegas news station reported that a husband and father recently passed away from COVID-19. He was 42 years old and “the picture of good health.” (2)

“He was furloughed from his job so he didn’t have health or life insurance and now medical bills are mounting for his wife and her three young daughters.” 

“Nobody ever anticipates that someone is going to pass at 42 years old so honestly when he was laid off, it never crossed my mind that oh my gosh we’re losing our life insurance,”

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economy, income, interest rates, retirement, risk management

Where to from here? July 2020

It has been a difficult year on many levels. Given the past few months I want to catch up in several areas… with what has transpired since the spring, where things currently stand in the economy, and what I foresee going into the second half of the year and beyond. This may take a while…

As a reminder, the current economic downturn did not occur spontaneously due to COVID. In September of 2019 Repo rates indicated problems in lending markets. For several year’s companies have been borrowing extensively, especially at lower levels of credit quality. In the Fall of 2019 Morgan Stanley noted that over 20% of corporate borrowers were “zombie companies”; companies with no positive cashflow, excessive debt, and borrowing to stay afloat. This was the situation when the economy was “healthy”.

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economy, interest rates, retirement, risk management

Fed Reluctant To Raise Rates While Raising Questions Around The Economy

On July 29th, 2020 the federal reserve committed to keeping interest rates pinned to the zero bound and stated their expectation to maintain this position for years to come.

In his meeting with reporters to discuss fed policy, fed chair Powell stated, “We haven’t even thought about thinking when we plan to raise rates.” The FOMC statement explained why; The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term. In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.” (1)

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