Markets Near All Time High – Medicare for All?
The Markets were pretty flattish on a holiday shortened week.
So let’s take a look where we sit on the major Market Indexes, Year-to-Date:
Dow Jones Industrial Average 14.64%
Nasdaq Composite 20.54%
Russell 2000 16.57%
Barclay’s Aggregate Bond 2.58%
MSCI EAFE International Index 13.07%
MSCI Emerging Market Index 13.63%
With the Markets a stone’s throw within record highs, many Investors are wondering, OK, what’s next? Last year we were cruising along until Federal Reserve Chairperson, Jerome Powell decided to remove the booze from the punch bowl.
With interest rates poised at this time to remain low, good employment and overall good consumer confidence, we just need Corporate Earnings reports to be favorable and the all-time high should be broken. It appears at this time, the major short-term risks remain political, including China and the political back and forth that is now starting to percolate with the upcoming Presidential Election being almost a daily topic so quickly.
This week starts the Earnings avalanche. Will earnings beat the lowered bar estimates? Will the China issue impact Corporate Earnings guidance for the remainder of 2019. Both very important to the Markets, in the short-term.
Medicare for All?
Over the years, I’ve had the pleasure of offering Educational Workshops on Medicare and have guided Clients through the maze, when age appropriate.
I’ve learned to appreciate the quality of Medicare Coverage, especially when one elects Original Medicare with a Medicare Supplement. This program is truly a partnership between our Government and Private Insurance Companies. It works very well as coverage options; Physician and Hospital selection are excellent.
As a self-employed person, I can also appreciate how expensive health care coverage has become. I personally don’t like that I have to follow a specific network of doctors and hospitals and cannot go out of my network. This is a result of our current system. My choices of coverage are also very limited. For me, it would be a relief to go onto Medicare from coverage and a cost standpoint. The problem! Take a look at the fiscal situation of the Medicare Trust Funds. Not good and not sustainable. Medicare Part A, Hospital Insurance Trust Fund is projected to be depleted by 2026, 7 years from now. This is a much larger issue than Social Security and needs to be dealt with sooner than later.
So my issue with any Healthcare reform is “HOW DO WE PAY FOR IT?
Question of the Week
Social Security: What is the earliest age a widow or widower can collect a survivor benefit?
Answer To Last Week’s Question
The Bond Market: So much has been written over rising and falling Bond Yields. When Yields increase or decrease that can impact the current Market value of your Bond holdings. In the investment world, there is a term that measures how sensitive the Principal of your Bond is to the upward and downward movement in interest rates.
What is the term that measures the approximately price movement of your Bond, as Interest Rates move higher and lower?
a) Term Structure
e) Credit Quality
The correct answer –
Duration measures the price sensitively of a bond based on interest rate movements. It can be a good indicator of what to expect from your Fixed Income (Bond) holdings when interest rates move both upwards and downwards.