The Chinese may just save us All, Even if U.S. Politicians Can’t

The Chinese may just save us All, Even if U.S. Politicians Can’t

  • Posted on: 9 December 2015
  • By: admin

The Chinese may just save us All, Even if U.S. Politicians Can’t

With the global economy performing sluggishly, the changing of Chinese leadership could usher in stability and a re-acceleration of growth that could help everyone’s fortunes. The most recent data paints a decent picture http://www.marketwatch.com/story/china-inflation-cools-opening-door-to-more-easing-2012-11-08

Why You Should Care

The deceleration of the Chinese economy over the last two years has put a greater strain on U.S. consumers to support global GDP growth. Europe continues to be mired in recession, and Germany itself is now beginning to crack. But, with the leadership handoff in China now complete and data showing improvement, the U.S. may finally get some help on the growth front. 

The U.S. obviously has its own issues to deal with, namely the Fiscal Cliff, but the stars may be aligning for a deal to get done, and if we can put this behind us, the U.S. can join China in re-accelerating its GDP growth and thus helping the global economy improve. 

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Europe's Scariest Chart Hits Peak Scariness Levels... And Rising

Europe's Scariest Chart Hits Peak Scariness Levels... And Rising

  • Posted on: 9 December 2015
  • By: admin

Europe's Scariest Chart Hits Peak Scariness Levels... And Rising

 

Things are rather unsurprisingly going from bad to worse in Europe. Perhaps it is the anecdotal evidence we see in the now weekly riot-cams from Spain and Greece but just as we warned over a year ago, the truly scariest chart in Europe remains that of youth unemployment. The correlation (and causation) that runs from extreme levels of youth unemployment to general social unrest and anarchy is stunning throughout time

http://www.zerohedge.com/news/2012-11-08/europes-scariest-chart-hits-peak-scariness-levels-and-rising

 

 

Pathlight's Top 5 Reads for November

Pathlight's Top 5 Reads for November

  • Posted on: 9 December 2015
  • By: admin

Five Reads for October

 

 

Government funded battery plant doesn’t have enough work for employees

Workers at LG Chem, a $300 million lithium-ion battery plant heavily funded by taxpayers, tell Target 8 that they have so little work to do that they spend hours playing cards and board games, reading magazines or watching movies

 

http://www.woodtv.com/dpp/news/target_8/Volt-no-jolt-LG-Chem-employees-idle

 

"The Perils of the Fiscal Cliff" by John Mauldin

How does one go about comparing the financial crisis in one country to that of another? The International Monetary Fund tried to do just that, setting off a rather torrid debate in economic circles. And while we will look today at their analysis, the upshot is that the economic models used to guide monetary and fiscal policy may not be working as they did in the past

 

http://www.mauldineconomics.com/frontlinethoughts/the-perils-of-the-fiscal-cliff

 

College Is Dead. Long Live College-Time Magazine

On Sept. 17, the Pakistani government shut down access to YouTube. The purported reason was to block the anti-Muslim film trailer that was inciting protests around the world.

 

http://nation.time.com/2012/10/18/college-is-dead-long-live-college/?iid=us-main-lede

 

If Smart Is the Norm, Stupidity Gets More Interesting-New York Times

Few of us are as smart as we’d like to be. You’re sharper than Jim (maybe) but dull next to Jane. Human intelligence varies. And this matters, because smarter people generally earn more money, enjoy better health, raise smarter children, feel happier and, just to rub it in, live longer as well.

 

http://www.nytimes.com/2012/10/23/health/if-intelligence-is-the-norm-stupidity-gets-more-interesting.html?_r=0

 

Inside the Dow’s 885 Point Rally This Year

The Dow is up 885 points year to date. While there are 30 stocks in the Index, only five really matter to this 7.3% advance on the year. They are Home Depot (164 points), Wal-Mart (107 points), Disney (103 points), Travelers (100 points) and JP Morgan Chase (58 points).

 

http://www.thereformedbroker.com/2012/10/24/inside-the-dows-885-point-rally-this-year/

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Expert's Corner - The 7 Myths about Long-Term Care

Expert's Corner - The 7 Myths about Long-Term Care

  • Posted on: 9 December 2015
  • By: admin

The Myths about Long-Term Care
 
Long-term care issues have been everywhere in the news lately – from stories of people needing these services to how the government is responding. But there is also a lot of conflicting, and even mistaken, information. Misconceptions may have prevented you from including long-term care planning into your retirement portfolio. But long-term care planning can be a critical component to any comprehensive retirement plan. So now is the time to dispel these myths.
 
Myth #1: I’ll never need long-term care.
Most people can’t imagine themselves needing long-term care services. But, the U.S. Department of Health and Human Services indicates that people age 65 face at least a 40% lifetime risk of entering a nursing home sometime during their lifetime[1]. Living a long life may increase your risk of needing long-term care. Isn’t it better to insure against what that risk may do to your family and your financial plans?  
 
Myth #2: Long-term care is only for the elderly.
Actually, a surprising amount of long-term care services are provided to younger people. The U.S. Government Accountability Office estimates that 40% of 13 million people receiving long-term care services are between the ages 18 and 64[2]. The unexpected need for long-term care could arise at any age for any number of reasons, including illness, or an accident.   
 
Myth #3: I’ll pay for my own long-term care.
In 2012, nursing home costs averaged over $91,000 a year nationally, but in some regions these costs are sometimes twice that amount[3]. How long can you pay for these expenses without jeopardizing your financial plan or exhausting your savings? It may make good sense to transfer this financial risk just like you do with your homeowner’s insurance or auto insurance. Even if you can afford to pay for long-term care services out of pocket, why would you want to when you can transfer the cost to an insurer for premiums that may total a fraction of the cost of care?
 
Myth #4: Medicare will cover my long-term care expenses.
Medicare does pay for nursing home care, but only for a maximum of 100 days and if the 3-day qualifying hospital stay requirement has been met. In addition, Medicare will only pay as long as you are showing progress towards recovery. Once your condition becomes stable, even if you are not fully well or back to a completely healthy state of being, Medicare rules indicate that benefits will stop. Also, Medicare does not pay for individuals to attend an adult day care or for the room & board expenses at an assisted living facility.
 
 
Myth #5: Medicaid will cover my long-term care expenses
Medicaid was developed partially to cover long-term care costs for Americans of any age who need help paying for those services. Medicaid is currently the largest payer of long-term care costs in the United States, primarily for care in nursing homes. However, Medicaid focuses on helping people with limited or minimal income and assets, and in order to qualify for benefits, you have to demonstrate a financial need for help. Qualifying means spending nearly all of your own money on your own care before the government will step in to help.
 
Myth #6: My family will take care of me.
The financial, physical and emotional stress that full-time care-giving may place on families can be overwhelming. Many families have struggled to provide care for parents or siblings only to eventually realize that the care required is more than they can provide. The truth is, sometimes the best way for a family to take care of a loved one needing long-term care is to make sure that they have access to professional care. With the advances in home care services, many people needing long-term care are actually able to stay at home, with or near families, and still get the professional care they need.
 
Myth #7: Long-term care insurance covers only nursing homes.
Everyone wants to stay at home. Long-term care insurance can offer valuable benefits that may keep you at home for as long as possible. Long-term care insurance can also help cover the cost of care in other locations, such as adult day care centers, assisted living facilities and hospice care.
 
With long life comes long-term planning. Make a plan for you and your family today. For more information on long-term care insurance, please contact Chad C. Voithofer,  Agent, New York Life Insurance Company at 602-751-4236.

 
The views and opinions expressed are not those of Pathlight Investors and are intended to be for educational purposes only. Pathlight Investors cannot vouch for the accuracy of the information presented. Please contact the author of the article to determine how this information pertains to your specific situation.
 
The purpose of this piece is solicitation of insurance. An insurance producer (agent) may contact you. New York Life Insurance Company long-term care insurance is issued on policy form series ILTC-5000 and INH-5000 with a state identifier and edition date. Example: Examples: for Idaho ILTC-5000 (ID) (1001) and INH-5000 (ID) (1001) and for North Carolina ILTC-5000 (NC) (1001) (Rev. 0606) and INH-5000 (NC) (1001) (Rev. 0606) and for Pennsylvania ILTC-5000 (PA) (1001), FLTC-5000 MLP (PA) (0503), for Tennessee ILTC-5000 (TN) (1001) and INH-5000 (TN) (1001) and for Texas ILTC-5000 (TX) (0305) and INH-5000 (TX) (0305). New York Life Insurance Company, 51 Madison Avenue, New York, NY 10010.

[1]Health Insurance Association of America. A Guide to Long-Term Care Insurance. 2007. Page 3.
[2] Health Insurance Association of America. A Guide to Long-Term Care Insurance. 2007. Page 3.
[3] New York Life Insurance Company. Survey of Nursing Home Costs. 2012.

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Care Who Wins the Election? Your Stocks Don't!

Care Who Wins the Election? Your Stocks Don't!

  • Posted on: 9 December 2015
  • By: admin

Do You Care Who Wins the Election? Here’s a Secret. You’re Stocks Don’t.

At Pathlight we are what are called fundamental analysts, meaning we drive our investment decisions based on the fundamentals of individual companies; How much will they earn? What does their revenue growth look like? Do they play in a growth industry? We believe that fundamentals ultimately drive stock prices and the winner of the Presidential election does have wide ranging fundamental impact on the companies in which we invest.

But, when you truly analyze stock price movement in Presidential election years, a stark reality becomes all too clear. In the near-term, your stocks don’t care who wins the election. The chart below shows the course of the S&P 500 during Presidential election years dating back to 1928 (the red line) as well as the course of the S&P 500 in 2012 (the blue line).

 

Source: Bespoke Investment Group

Do you notice a trend here? The performance in 2012 is progressing lock-step with the historical pattern, and if the pattern continues to hold into year end, we should see a nice rally in stocks post the election, again, regardless of who wins. 

As always, past performance is no guarantee of future results, so take all of this as it is intended, which is to be an educational comment that should be used with other information to help formulate your investment strategy. 

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Companies Limiting Full Time Employment to Combat Higher Health Care Costs

Companies Limiting Full Time Employment to Combat Higher Health Care Costs

  • Posted on: 9 December 2015
  • By: admin

Companies Limiting Full Time Employment to Combat Higher Health Care Costs

Many employers are beginning to limit employee hours to less than 30 per week to avoid providing minimum health insurance coverage and avoid the $2000 penalty for not providing insurance mandated by the new Healthcare legislation. You can read the story at http://professional.wsj.com/article/SB10001424052970204707104578094941709047834.html

Why You Should Care

With the seemingly endless rise of health insurance costs, employers are going to find ways to save money, and that comes from either limiting hours, or simply saving money by paying the $2000 government penalty and avoiding the annual healthcare costs associated with employer provided plans. At the end of the day, you can expect more part-time employees and swelling government insurance rolls as a result, and neither is a positive.

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California Lottery Winner didn’t know she had won for 5 Months!

California Lottery Winner didn’t know she had won for 5 Months!

  • Posted on: 9 December 2015
  • By: admin

California Lottery Winner didn’t know she had won for 5 Months!

A California woman forgot what turned out to be a $23 million winning ticket in her car but was able to redeem the ticket after her daughter snapped a photo of the surveillance video taken at the store. You can read the story at http://www.huffingtonpost.com/2012/11/01/california-lottery-jackpot-claimed_n_2060760.html

Why You Should Care

To a Financial Advisory firm like ours this story is a microcosm of what we see every day. We see individuals focused more on planning their vacation than on planning their retirement. We see individuals simply forgetting about important things like their 401k’s, establishing a will, maintaining the proper amount of insurance to provide for their family in the event of their death. 

Although the outcome of this story is truly great, when dealing with finances, you have to be vigilant. You have to know what you have and where it is. You have to have a plan to make it grow and work for you. Don’t leave your future in the glove compartment of your car.

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Government Budgeting – A Lesson in Futility

Government Budgeting – A Lesson in Futility

  • Posted on: 9 December 2015
  • By: admin


Government Budgeting – A Lesson in Futility
In 2010 when Greece was getting its first, of what has become many, bailouts and as a condition for those bailout funds, the Greek government put forth an austerity budget that was supposed to begin to get a handle on the debt to GDP of the country. Oh what wishful thinking. But the new estimates are out, and it isn’t pretty. http://www.zerohedge.com/news/2012-10-31/greece-releases-another-budget-hilarity-ensues
Why You Should Care
This is what happens when debt grows to uncontrollable levels. No matter what the Greeks do, they just can’t catch their tails. They cut programs so they can spend less, but austerity leads to slower GDP which ultimately leads to less tax revenue to pay for the remaining services. It’s a vicious cycle, one that is made even more difficult by the fact that Greece is tied to the Euro and cannot devalue its own currency. 
You can see in the chart below that the new estimates for Greek debt to GDP are now 1/3 higher for 2014 than they were when they were first introduced in 2010. Additionally, the Greeks missed the first target in 2010 by 11%. 
 
Governments aren’t equipped to deal with debt reduction. Elections mean that no politician wants to make the truly difficult choices to cut programs that help keep their constituents happy, and ultimately get them re-elected. We see this in the U.S. right now with the struggles to create a grand bargain over a debt and deficit reduction plan. We see it in the fact that the mandatory spending cuts that were signed into law last year are now being walked back by Congress. So much for forced spending cuts. 
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Hurricane Sandy and its Impact on the East Coast

Hurricane Sandy and its Impact on the East Coast

  • Posted on: 9 December 2015
  • By: admin

Hurricane Sandy and its Impact on the East Coast

As Hurricane Sandy moves west, leaving the East Coast to begin the cleanup and rebuilding, the images of devastation are striking. You can see a few at http://www.zerohedge.com/news/2012-10-30/east-coast-pictures-morning-after. Additionally, cost estimates are moving higher (now upwards of $20 billion), and comparisons are being made to some of the worst storms on record. But there is a bright side, and it comes in the form of an economic boost when the cleanup begins that will hopefully help ease the pain.

 

Why You Should Care

Our thoughts and prayers should be with those in the path of this terrible storm. Let’s hope those impacted areas are able to get back to a normal routine in short order.  By all accounts the damage is extensive. Millions are still without power and could be for the next week, subways and tunnels in NYC are flooded, and fires have burned swaths of homes in New Jersey. 

   

There is a silver lining in this event and it comes in the potential for increased economic activity caused by the cleanup and rebuilding of the battered East Coast. Construction crews will need to hire more workers to clean up and retailers will need to hire more people to handle to influx of shoppers and their demand for goods to replace damaged possessions. So we will hope for the best, and hope the recovery helps ease the pain of the last 24 hours.

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CEO’s Urge Federal Government to Tackle Deficit

CEO’s Urge Federal Government to Tackle Deficit

  • Posted on: 9 December 2015
  • By: admin

CEO’s Urge Federal Government to Tackle Deficit

Last Thursday a group of over 80 CEO’s from leading American companies joined together to sign a statement calling for a deficit reduction compromise in Congress. You can read the NY Times article at http://www.nytimes.com/2012/10/26/us/politics/business-leaders-urge-deficit-deal-even-with-more-taxes.html?_r=0

Why You Should Care

Well it’s about time. With as much uncertainty that we face in America, from elections to debt, I’m more than a little shocked that it has taken the business community this long to truly put on a public show in support of policies aimed at tackling the U.S. debt and deficit. I guess it’s better late than never, and it underscores just how important this issue and government’s inability to compromise has become. The inability for Congress to actually do its job is causing business to hold back on investing as they don’t know what the rules will be. We can’t expect the economy to flourish if we don’t put some of these issues behind us. Luckily, November 6th will bring some certainty regardless of the winner, but we still have an inept and lame duck Congress that isn’t likely to get much done.

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