For the Week of May 20, 2019

The Markets

Stocks closed lower Friday after CNBC reported U.S. – China trade negotiations had stalled. In positive news, the Trump administration reached a deal with Canada and Mexico to end U.S. tariffs on steel and aluminum imports and said it would delay a decision on imposing broad tariffs on cars produced by major trading partners. But the three major indexes still closed mildly lower for the week. For the week, the Dow fell 0.61 percent to close at 25,764.00. The S&P lost 0.69 percent to finish at 2,859.53, and the NASDAQ dropped 1.27 percent to end the week at 7,816.28.

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

Borrow — The Treasury Department auctioned off $19 billion of 30-year bonds with a 2.875 percent coupon May 9. The new bonds mature on May 15, 2049. The government has auctioned off 30-year bonds since 1977. The lowest yield ever on our nation’s 30-year paper was 2.1 percent on July 8, 2016 (source: Treasury Department, BTN Research).

One Indicator — The price/earnings ratio for the S&P 500 as of May 10 was 18.6, i.e., the raw index divided by the index’s trailing 12 months earnings per share before considering extraordinary items. The index’s long-term price/earnings ratio (dating back to 1954) is 16.7 (source: Bloomberg, BTN Research).

Long-Term Issue — The estimated Social Security shortfall today (i.e., a present value number) between the future taxes anticipated being collected and the future benefits expected to be paid out over the next 75 years is $13.9 trillion. The $13.9 trillion deficit could be eliminated by an immediate 2.7 percentage point increase in the combined Social Security payroll tax rate (from 12.4 percent to 15.1 percent) or an immediate 17 percent reduction in benefits that are paid out to current and future beneficiaries (source: Social Security Trustees, BTN Research).

WEEKLY FOCUS – Planning for the Inevitable

Most of us plan for major events in our lives: college educations, weddings, the births of children, retirement and our final estate. Yet, a study by the National Funeral Directors Association says although nearly two-thirds of consumers believe communicating their funeral wishes to family members is important, less than a fourth have done so.

Preplanning your funeral or memorial service allows you to choose the items, services and provider you prefer. It also lets you select people you want to be notified and individuals you would like to officiate, deliver eulogies, read prayers or poems, sing or serve as pallbearers.

Several websites can help you research options. You’ll find a wealth of articles on everything from choosing flowers to prepaying with a trust on everplans.com/funeral. Funerals.org offers a planning guide and tips for lowering costs. Parting.com lets you compare local funeral homes’ items and services. Funeraldecisions.com provides free instant quotes online and lets users sign up to receive direct estimates from funeral providers.

Once you’ve made your decisions, document your plan, share it with loved ones and create a legal document authorizing someone to handle your funeral arrangements. The best document to accomplish this is a Durable Power of Attorney for Health Care (DPOAHC) that includes a paragraph specifying who you want to make your funeral arrangements. The DPOAHC must be notarized to be legally binding. Give the person you’ve chosen to carry out your wishes copies of the DPOAHC and your plan. This is preferred to detailing your wishes in a will, which may not be read before the funeral, or leaving them in a safe deposit box since arrangements may need to be made on a weekend or holiday when the box won’t be available.

Many experts caution against prepaying for your funeral or buying an insurance policy through a home. Funeral homes can go out of business, change hands or lose their good reputation. There are several alternatives to prefund your final expenses. You can purchase burial insurance, create a trust or set up a Payable on Death account through your bank, which allows a beneficiary to receive the money to cover final expenses.

We can help you make financial arrangements that will make money readily available to your family to cover funeral expenses. Call our office for help with funeral and estate planning.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright May 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2547838.1

For the Week of May 13, 2019

The Markets

U.S. stocks dropped early Friday but rose after President Donald Trump and Treasury Secretary Steven Mnuchin described trade talks between China and the United States as productive. The rebound helped the S&P snap a four-day losing streak. For the week, the Dow fell 1.96 percent to close at 25,942.37. The S&P lost 2.10 percent to finish at 2,881.40, and the NASDAQ dropped 3.03 percent to end the week at 7,916.94.

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

All Are Too High — On Dec. 17, 2018, 10 Wall Street strategists forecasted the yield of the 10-year Treasury note as of Dec. 31, 2019. The 10 predictions ranged from a low of 2.75 percent to a high of 3.60 percent. The yield on the 10-year Treasury note closed at 2.5 percent as of Tuesday, April 30 (source: Barron’s, BTN Research).

Fourteen — The best 14 trading days for the S&P 500 over the last 10 years gained 86.2 percent (total return), more than the 84.2 percent gained by the other 2,502 trading days in the decade (source: BTN Research).

What a Surprise — A divorced person who was married for at least 10 years is eligible to collect a Social Security survivor benefit when their ex-spouse dies, even if the ex-spouse had remarried. Please consult a Social Security expert for details (source: Social Security Administration, BTN Research).

WEEKLY FOCUS – Can You Afford to Miss Months of Work?

It won’t happen to me. It’s easy to think that way when considering the possibility of being out of work due to a debilitating illness or injury. But the numbers paint a different picture. More than one in four of today’s 20-year-olds can expect to miss work due to a disability for 90 days or more before they reach 67, and 45 percent of consumers who filed for bankruptcy between 2013 and 2016 cited medically related work loss as a contributor.¹

Back injuries, cancer, strokes, heart attacks, diabetes and mental health issues are among the most common conditions that force people to take extended time away from work, but there are many more that unexpectedly afflict people every day. Worker’s compensation and Social Security do not cover most of these conditions.¹ So, unless you plan to retire soon, or you can afford to go months without a paycheck, you should protect your income with disability insurance.

When selecting disability coverage, it’s important to understand the differences in policies. In general, there are two types of disability insurance: short-term and long-term. Both will replace a portion of your salary up to a cap.²  How much you pay for your coverage will vary depending on your age, health, occupation, how long it will pay benefits, gender (unlike life insurance, women typically pay higher rates for disability coverage) and the elimination period (the amount of time you must wait before collecting benefits).

When comparing coverage, be sure to know how the carriers define “disabled.” Some will only pay if you are unable to work at any job you’re qualified for. Others will pay if you can’t work in your occupation. Some will pay partial benefits if you can work part time, and others will only pay when you are unable to work at all.²

Disability coverage often excludes certain health issues, such as existing back problems or mild depression, meaning you cannot file a claim if you’re disabled for an excluded condition. But because many injuries and illnesses can lead to a disability, you should still consider purchasing coverage even if you have an exclusion.²

To learn more about how disability insurance can help protect your income and what coverage is right for you, call our office today to schedule an appointment.

¹ https://disabilitycanhappen.org/wp-content/uploads/2019/05/DIAM2019_Facts.pdf

² https://www.insuranceblogbychris.com/disability-insurance/

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright May 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2538813.1

For the Week of May 6, 2019

The Markets

The major indexes ended solidly higher Friday following a robust jobs report. The Bureau of Labor reported the U.S. added 263,000 jobs in April, well above analysts’ predictions. The unemployment rate fell to a near 50-year low at 3.6 percent. For the week, the Dow fell 0.14 percent to close at 26,504.95. The S&P gained 0.22 percent to finish at 2,945.64, and the NASDAQ climbed 0.37 percent to end the week at 8,164.00.

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

Twice As Long — On Wednesday, May 1, the U.S. began its 119th month of an economic expansion, i.e., the nation has been expanding since July 2009. The average length of all 33 expansions in the country since 1854 (not counting the current expansion) is 58 months (source: National Bureau of Economic Research, BTN Research).

Higher Here Than There — The U.S. economy is projected to grow 2.2 percent in 2019, nearly a percentage point higher than the 1.3 percent projected growth rate for the collective economies of the 19 nations that make up the Eurozone (source: International Monetary Fund, BTN Research).

Gotta Have It — On average, Americans pay out of pocket just 15 percent of the total health care expenditures they generate in a year. Out-of-pocket expenses include deductibles and co-payments for services and prescription drugs but do not include the cost of health insurance premiums. The remaining 85 percent of annual health care expenditures is covered by insurance (source: Health Care Cost Institute, BTN Research).

WEEKLY FOCUS – Talking to Loved Ones About Aging

Aging is not for the faint of heart. Seventy-five percent of those 65 and older have one or more chronic health conditions.¹ Forty percent have at least one disability.² And one in 10 has Alzheimer’s.³ Helping a parent or loved one through the aging process can be difficult, too. Following these useful guidelines to start and maintain an open dialog can help.

Be proactive instead of reactive. The ideal time to start a conversation is before any problems arise and emotions complicate matters. Next best is when one or more issues become recognizable, when you still have time for a series of small conversations that take place over time.

Be respectful and considerate. Choose a quiet moment, without distractions. Speak as a partner. Ask open-ended questions. You might say you’ve noticed a task is getting difficult for them and ask, “Is there a way we can make it easier for you?” Or, “As you age, what are your priorities?” Listen to their preferences and concerns. Let them make as many decisions as possible.

Discuss concerns with other family members. Be realistic about responsibilities you are or will be able to assume. Don’t make promises you can’t keep. Discuss what needs to be done now, what might eventually be needed and parts everyone can play.

Ask them to create necessary documents. A HIPAA authorization allows medical professionals to share health information. A medical power of attorney lets a family member make health care decisions if your loved one becomes unable to. A durable power of attorney for finances lets a relative manage financial affairs. A living will details the care your loved one wants to receive if they become incapacitated. A properly written will ensures their final wishes are carried out. Your loved one should also create an in-depth medical history and a financial profile. The financial profile should detail where they keep financial records and list their financial advisor, tax consultant and attorney.

Financial issues related to caring for a parent or loved one can be complicated and difficult to predict. Call our office today to discuss what you can do now to be financially prepared should your loved one require care.

¹https://www.seniorliving.org/research/

²https://www.census.gov/newsroom/press-releases/2014/cb14-218.html

³https://www.aplaceformom.com/blog/2013-02-28-scary-facts-about-alzheimers-disease/

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright May 2019. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 2529677.1