The Best Post-Work Hangouts on the Central Coast
The Central Coast offers plenty of relaxing post-work options for discounted foor or dranks, or the beautiful outdoors. Here are a few of our favorites… READ MORE
(Aug 6) – 5-Cities, Nipomo Real Estate Update
(Jul 18) – Mid-Year Market Update
(May 29) – Do you Need Long-Term Care Insurance?
Editor in Chief, Columnist: Rylan Stewart ([email protected])
We deal in housing, but it takes more than a building to call a place home… it is the people, events, and businesses. So we started the SLO County Locals Blog to explore the spirit of the Central Coast.
It’s been such an incredible five years. Here we are in the middle of 2014. This year, the markets have essentially flat. I’m not surprised by this as we’ve had such a big run up over the past five years. Markets don’t just point in one direction – up or down.
Here’s one long term money manager’s take on the markets and world economy as of mid-year.
Every quarter, we get economic results that come in several forms; the government issues the results on how the economy is doing, results of how manufacturers are doing, the consumer sentiment reports, unemployment numbers, and many more.
One report that is widely-watched is the earnings stated by publicly traded corporations. There two general terms related to these reports. There is a “earnings season” and the “pre-earnings season.” Pre-earnings season begins just prior to earnings season. (This might be a more-than-obvious statement.) Both pre-earnings season and earnings season are quarterly events.
The pre-earnings season corporate reports tell us which companies are not going to meet their earnings estimates. These reports can either state that a company has under-performed their estimates or outperformed their estimated earnings.
After last year’s huge run up in many asset classes, the markets seem to be taking a well-deserved breather. I think it’s a healthy thing that we’re not seeing another huge 20% increase in the markets. That kind of increase would not be in line with the gains in the broader economy. If we did see another huge year in the markets, we could very well be setting ourselves up for a market adjustment. That huge year doesn’t seem to be happening. That’s a good thing in my book.
Note: It was pointed out to me that today’s tip could be seen as a little controversial or maybe a bit judgmental. It’s not meant to be anything more than thought provoking. I’ve written today’s tip with the hope that we’re all mindful when we do our estate plan, as what we do now can/will have long term ramifications. In my years of practice, I’ve seen so many things and always respect people’s wishes and reasoning.
I was talking with a friend yesterday about investing. She had brought up a couple stocks she had invested in based on a television show she watches.
She described how she hadn’t had much luck with the suggestions of this particular show host and wondered if she should keep going with their ideas? She said her kids told her to do exactly the opposite of what was suggested on the television program based on her prior experience.
She didn’t like having her money earning nothing in the bank. (I asked if she was investing her emergency money in stock. Investing emergency money in the stock market is very risky and not a good idea.) So, she was investing in high dividend paying companies for their income. They were both paying a ten percent dividend. That sounds pretty good, doesn’t it? The thing is that in today’s market, most great companies are paying dividends that are a fraction of that and keeping their shareholders in place. If a company is paying a 10% dividend when the market doesn’t really require it, what’s going on with those companies?
Being in the planning and investment business a long time, and knowing that a person really should have a strong knowledge about what they are investing their hard earned money on, I decided to ask a couple questions:
I’ve been in the financial planning and investment business for almost 31 years now. I’d like to be able to say, I’ve seen it all. Yet, it’s clear the world continues to evolve in so many different ways that there’s always something new going on. This is part of what makes my work interesting, and helping my clients so rewarding.
One topic that keeps coming up in my business is what I call, pricing. That’s what you pay to have your investments managed. Pricing can often encompass a combination of an annual management fee and a one-time charge to make an investment. No matter the format of the pricing a client pays, it’s the total of the long term costs that matters. If you’re not thoughtful and careful, the total you pay for money management can add up over the years to a substantial amount of money.
I believe that there are a couple of questions that are more important than pricing:
By Sarah Day
San Luis Kitchen Co.
The kitchen this month started life as a wide-open and airy space with somewhat drab cabinets. Its bones were great, some of the details were interesting – the pendant lights, the high vaulted ceiling and the soffit bridges, but the blonde oak cabinets, white tile counters, and vinyl flooring dragged the space back into the realm of the mundane.
When the homeowners came to San Luis Kitchen they were seeking to add a bold richness to their home. They fell in love with our cherry cabinets in a deep red finish called ‘Fireside Heirloom Black’ which has black glaze and fleck distressing to bring out the details of the style.
I like to say there are three basic groups of people who may or may not need or want LTC (Long Term Care) insurance:
Group 1: This group is the wealthier group in our country. They have enough money and assets to cover any expenses, including long term care. When they buy LTC insurance, they do so to protect those assets and their income. They do not buy it out of need. Buying LTC insurance is elective here.
Group 2: This group is on the other end of the economic spectrum. They are not wealthy and do not have a large income. This group probably should not buy LTC insurance. The policy and its premiums are likely to compromise their ability to live day to day.
Group 3: This group is a large portion of the US population. They have a good income and assets. The issue here is that they do not want to risk spending down their assets and/or using too much of their income to cover long term care costs. In this scenario, a couple could both need long term care. Or, there isn’t enough money to cover long term care, leaving them vulnerable to real economic issues down the road. This group certainly should consider LTC insurance. In many cases, they can afford the premiums. The protection is probably worth the policy costs.
The emerging markets of the world have been the quickest growing economies for a number of years now. China would be one of those economies. Its rate of growth has been as high as 10% in a given year. We’ve not seen that kind of growth here in the United States for decades.