Category Archives: Individual and Medicare

Quarterly Economic Update

U.S. stocks rollercoastered in Q3 2013, but the S&P 500 ultimately gained 4.69% in three months and celebrated another record close on September 18 (1,725.52). The Federal Reserve refrained from tapering its stimulus effort, a move cheered in financial markets worldwide. Global investors sighed with relief as diplomacy headed off a major geopolitical crisis in Syria, and sighed with frustration as bipartisan sparring threatened to shut down parts of the U.S. government and threaten its ability to pay debt. Assumptions of higher mortgage rates didn’t exactly reduce demand for homes; foreign stock benchmarks rose, and so did prices of precious metals.1,2


Mirroring Q3 2012, the big economic move of Q3 2013 came in mid-September. A year after rolling out QE3, the Fed unexpectedly announced it would hold off on reducing the amount of its monthly bond purchases. Fed chairman Ben Bernanke mentioned that the central bank could be open to a taper later in the year; Kansas City Fed president James Bullard thought it might happen in October.3.4


Turning from Wall Street to Main Street, the jobless rate fell to 7.3% in August, down 0.3% from June and down 0.8% in 12 months. Even so, 37.9% of those unemployed in August had been out of work for 27 weeks or longer. Consumer inflation – as gauged by the headline Consumer Price Index – was minor, increasing 0.2% in July and 0.1% in August. The University of Michigan’s consumer sentiment index hit a 6-year peak of 85.1 in July, but slipped to 82.1 in August and 77.5 in September. In June, the Conference Board’s consumer confidence index was at 82.1, the highest in 5½ years; in August, it was 81.8, but in September it fell to 79.7.5,6,7,8


Consumer spending increased 0.2% for July and 0.3% for August; consumer incomes increased 0.2% and 0.4% in those respective months. Retail sales figures were similarly decent: up 0.4% in July, 0.2% for August. In September, the Bureau of Economic Analysis made its final estimate of Q2 GDP – 2.5%.9,10


On the factory front, the Institute for Supply Management’s manufacturing PMI chronicled a healthy expansion during the quarter, averaging 55.8 (55.4 in July, 55.7 in August, and 56.2 in September). ISM’s non-manufacturing index also reached impressive heights, coming in at 56.0 in July and 58.6 in August. Overall hard goods orders slid 8.1% in July, but managed a 0.1% gain in August; minus transportation orders, they fell 0.5% in July and 0.1% in August. The Producer Price Index settled: after June’s 0.8% rise, it was flat for July and up 0.3% in August, when annualized wholesale inflation was running at 1.4%.9,11,12,13


Wall Street and Main Street tracked many other news developments in the quarter. In July, the Obama administration chose to delay one part of the implementation of the Affordable Care Act; the requirement for businesses with 50 or more employees to furnish health insurance plans was pushed back until 2015. Still, online health care exchanges for uninsured individuals opened on October 1 as scheduled. In August, President Obama called for the phase-out of Fannie Mae and Freddie Mac, proposing to replace them with a new system reliant on private sector purchases of mortgages from lenders, with private capital bearing the bulk of any losses. The quarter ended with a partial shutdown of the federal government looming due to an impasse over the federal budget – a partisan dispute that resulted in the first such shutdown since late 1995.14,15,16


When Secretary of State John Kerry stated that Syria’s government had used chemical weapons against its own people in late August, the threat of American military intervention in the conflict between rebels and pro-Assad forces rocked global stock, bond and commodity markets. President Obama said the U.S. would only intervene with the approval of Congress; before that vote could take place, Russia offered a plan to disarm Syria’s chemical weapons stockpiles, one the U.S. accepted. While that conflict eased, global investors certainly had plenty of other headlines to consider.17,18,19


Manufacturing growth appeared to be sputtering in both China and India. HSBC’s factory sector PMI for China was but 50.2 in August, and 50.1 in July. India’s HSBC PMI was 49.6 in August; it had been 48.5 in July. The Asia Development Bank estimated China’s 2013 GDP would be 7.6%, and India’s just 4.7%.20,21


In better news, the eurozone recession was over: its economy had grown for the second straight quarter in Q2 (0.3%), albeit with the euro area jobless rate averaging 12.0% by August. Unfortunately, Italy’s fractious coalition government threatened to come undone at the end of Q3 when five ministers belonging to former prime minister Silvio Berlusconi’s center-right party quit their posts over a tax hike. This left analysts wondering if Italy would face a credit downgrade, and possibly an emergency election.22,23


Gains were prevalent in the quarter, boosted further by the mid-September announcement that the Fed would not yet taper. Some notable Q3 advances: Shanghai Composite, 9.88%; Hang Seng, 9.89%; Nikkei 225, 5.69%; Asia Dow, 4.33%; Kospi, 7.17%; Europe Dow, 15.56%; STOXX 600, 8.93%; CAC 40, 10.82%; DAX, 7.98%; FTSE 100, 3.97%; TSX Composite, 5,43%; Bovespa, 10.29% … and lapping the field, more or less, Argentina’s MERVAL rose an astonishing 60.73%. Among the big global indices, the Global Dow gained 9.57%, the MSCI World Index 7.68% and the MSCI Emerging Markets Index 5.01%. The Jakarta Composite lost 10.43% in Q3, the IPC All-Share 1.08% and the Sensex 0.08%.1,24


After a disastrous Q2, precious metals rebounded on the COMEX in Q3: gold gained 8.4%, silver 11.5%, platinum 5.4% and palladium 10.1%. Oil futures rose 6.0% in Q3; natural gas was nearly flat for the quarter, RBOB gasoline lost 3.0%, and heating oil rose 3.9%. This has not been a good year for key crops so far: the worst quarter for corn in 17 years and the worst quarter for soybeans in four put those respective futures at -36.8% and -9.6% YTD. Wheat was down 12.8% YTD at the end of the quarter; at least rice stood at +1.8% YTD.25,26,27,28


Existing home sales were still up 1.7% in August, the National Association of Realtors noted, with buyers scrambling to lock in rates after a 6.5% gain for July. New home sales fluctuated – down 14.1% in July, but back up 7.9% a month later. As for new residential construction, it was hard to spot a trend – the Census Bureau reported housing starts up 0.9% in August, and building permits down 3.8% (although permits for single-family construction were up 3% in August to the highest level in 5½ years). Pending home sales fell 1.4% for July and another 1.6% for August. Home values – as measured by the S&P/Case-Shiller Home Price Index – had risen 12.4% in a year by July. 9,29,30,31


Contrary to the assumption of many, mortgage rates actually declined in the quarter. Eyeing Freddie Mac’s June 27 and September 26 Primary Mortgage Market Surveys, we see the following descents: 30-year FRM, 4.46% to 4.32%; 15-year FRM, 3.50% to 3.37%; 5/1-year ARM, 3.08% to 3.07%; 1-year ARM, 2.66% to 2.63%.32


The S&P 500 ended Q3 at 1,681.55, the NASDAQ at 3,771.48 and the DJIA at 15,129.67, finishes that lead to the impressive Q3 and YTD numbers seen on the following chart. The Russell 2000 closed at a new all-time high of 1,078.41 on September 26, rising 9.85% for Q3 to end September at 1,073.79; the CBOE VIX fell 1.54% in Q3 and ended the quarter at 16.60.1,2

NAIC Fraud Alert- Consumers ignorance being used against them

From LifeHealthPro 09/11/13

Health insurance agents, make sure all of your licensing is up to date.

The National Association of Insurance Commissioners (NAIC) is warning that that people posing as insurance agents or representatives of the federal government are trying to obtain sensitive information like Social Security and bank account numbers in attempts to sell fake policies under Patient Protection and Affordable Care Act (PPACA).

The organization of state regulators is telling people to confirm agent licensing with the state regulatory officials.

The warning of fraudsters poised to take advantage of consumers reveals just how much consumers do not know about the PPACA.

As most in the industry know, open enrollment in the new marketplaces begins Oct. 1., but a man-in-the-street poll would reveal many people have no idea aobut the plan, thus creating the need for a PR blitz such as the kind Covered California has implemented, with its $45 million to be spent on “paid media” from now through March, and another $35 million from April through the end of 2014 to get the state’s uninsureds to sign up.

Taking advantage of that lack of awareness are bogus websites that purport to be part of the exchanges, which have been appearing online for more than a year.

The NAIC is thus warning people to not enter any personal or financial information into a website that says you can purchase a policy before the open enrollment period.

Another myth the NAIC fears is that some consumers believe they could go to jail for not having health insurance.

“You will not face jail time if you do not purchase health insurance,” the NAIC consumer alert states comfortingly (perhaps).

However, for those who remain uninsured and do not qualify for any exemptions, there will be a tax penalty that increases each year from 2014 through 2016.

One worrisome trick can quickly be parried by remembering something a bit unsettling for many consumers these days: “(A)nyone who is a legitimate representative of the federal government will already have your personal and financial information and should not ask you to provide it.”

That’s what the NAIC says in its consumer alert in response to what it calls a common ploy that involves unsolicited calls from scammers who claim to have your new “Obamacare insurance card” — they just need to get some information before they can send it to you.

In this ploy, the caller then asks for credit card numbers, bank account information or your Social Security number. Sadly, a variation of this trick specifically targets seniors on Medicare.

No, citizens, you are not required to obtain a new insurance or Medicare card under PPACA.

Another misconception that may make consumers vulnerable is that the premium a fraudster may offer is only good for a limited time.

“Be skeptical of someone who is trying to pressure you into buying a policy because the rate is only good for a short time,” the NAIC is telling consumers.

The best way to protect yourself from insurance fraud is to research the agent and company you’re considering through one’s state insurance department and confirm the agent and the company are licensed, the NAIC says.

However, if someone claims to be a health insurance exchange navigator, he or she won’t necessarily be licensed because the navigator is not acting in all instances as an insurance agent, but as more of a guidepost for consumers in the exchanges.

PPACA requires state health insurance exchange to hire navigators — who are not paid by health insurers — to help consumers understand how to use the exchange system. Navigators will be hired in the 34 states in which the federal government is running the marketplaces or where the state is engaged in a partnership with the federal government. The administration has said that navigators do not have to be licensed agents or brokers and may not be paid by insurance companies.

The Department of Health and Human Services (HHS) did not respond when asked what it is doing to alert consumers of fraud pertaining to the exchange enrollment, although it is heavily involved in Medicare and Medicaid fraud prevention and awareness.


Cash Flow Management

An underappreciated fundamental in financial planning.

Provided by Reeve Conover

You’ve probably heard the saying that “cash is king,” and whether you own a business or not, it is a truth that applies. Most discussions of business and personal “financial planning” involve tomorrow’s goals, but those goals may not be realized without attention to cash flow today.

Management of available cash flow is a key in any kind of financial planning. Ignore it, and you may inadvertently sabotage your efforts to grow your company or build personal wealth.

Cash flow statements are important for any small business. They can reveal so much to the owner(s) and/or CFO, because as they track inflows and outflows, they bring non-cash items and expenditures to light. They denote your sources and uses of cash, per month and per year. Income statements and P&L statements may provide inadequate clues about that, even though they help you forecast cash flow trends.


Cash flow statements can tell you what P&L statements won’t. Are you profitable, but cash-poor? If your company is growing by leaps and bounds, that can happen. Are you personally taking too much cash out of the business and unintentionally letting your growth company morph into a lifestyle company? Are your receivables getting out of hand? Is inventory growth a concern? If you’ve arranged a loan, how much is your principal payment each month and to what degree is that eating up cash in your business? How much money are you spending on capital equipment?


A good CFS tracks your operating, investing and financing activities. Hopefully, the sum of these activities results in a positive number at the bottom of the CFS. If not, the business may need to change to survive.


In what ways can a small business improve cash flow management? There are some fairly simple ways to do it, and your CFS can typically identify the factors that may be sapping your cash flow. You may find that your suppliers or vendors are too costly; maybe you can negotiate (or even barter) with them. Like many companies, you may find your cash flow surges during some quarters or seasons of the year and wanes during others. What steps could you take to improve it outside of the peak season or quarter?


What kind of recurring, predictable sales can your business generate? You might want to work on the art of continuity sales – turning your customers into something like subscribers to your services. Perhaps price points need adjusting. As for lingering receivables, swiftly preparing and delivering invoices tends to speed up cash collection. Another way to get clients to pay faster: offer a slight discount if they pay up, say, within a week (and/or a slight penalty to those that don’t). Think about asking for some cash up front, before you go to work for a client or customer (if you don’t do this already).


While the Small Business Association states that only about 10% of entrepreneurs draw entirely on their credit cards for startup capital, there is still a temptation for an owner of a new venture to go out and get a high-limit business credit card. It might be better to shop for one with cash back possibilities or business rewards in mind. If your business isn’t set up to receive credit card payments, consider it – the potential for added cash flow could render the processing fees utterly trivial.1


How can a household better its cash flow? One quick way to do it is to lessen or reduce your fixed expenses, specifically loan and rent payments. Another step is to impose a ceiling on your variable expenses (ranging from food to entertainment), and you may also save some money in separating some or all those expenses from credit card use. Refinancing – if you can do it – and downsizing can certainly help. There are many, many free cash flow statement tools online where you can track family inflows and outflows. (Your outflows may include bugaboos like long-term service contracts and installment payment plans.) Selling things you don’t want can make you money in the short term; converting a hobby into an income source or business venture could help in the long term.


Better cash flow boosts your potential to reach your financial goals. A positive cash flow can contribute to investment, compounding, savings – all the good things that tend to happen when you pay yourself first.


Reeve Conover can be reached at 877-423-9990 or at


This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.



1 – [11/19/12]




The unemployment rate went down, but not really?

There has been alot of talk about this weeks employment report- showing a decrease in unemployment.  But that isn’t necessarily a good thing.  There is a good article about this in CNNMoney this week.

The unemployment rate is not a simple calculation, like say “everyone working today/everyone who can work.”  Its everyone that applies for work.  It is everyone that ha s a job even if that job is part time because they cannot find a fulltime job.  It is every college graduate flipping burgers to pay their bills because the jobs don’t exist.    Since unemployment is based on how many file claims, and not all those that don’t – it can be misleading.  In fact, 18% of all statistics are misleading.  Ok, I made that up, but you get the point.

The “Labor Participation Rate (LPR)” is an interesting thing.  It answers the question “Of everyone 16 or over that can work, how many either have a job, or are actively looking for a job?”    People don’t work because they are retired (think Baby Boomers), or don’t want to work, or have given up looking for a job.

The LPR In January 1973 was a little above 60%, and it has risen gradually over the years – mostly as women entered the workforce, reaching a high of 67.3% in 2000.  We have been in decline ever since. and today we are at 63.2% – the same as we were in August of 1978, more than 30 years ago.  A little more than 9% of Americans who “do not work”  are not counted as available – children under 16, those in the military (thats not work??) or prison.  But there are 40 million people who just aren’t looking for work.

Now on the surface – well, that is their choice.  However, it means 40 million fewer Americans contributing to social security, paying for medical insurance, and paying for Medicare.  It means 40 million Americans that may not have the means to purchase the “mandatory” health insurance under ObamaCare, falling back onto public assistance for their health care.  It means 40 million more Americans on Medicaid and other public assistance programs.

And it is going to make supporting the ongoing entitlement programs more and more difficult to fund, as more and more of us Baby Boomers retire…

THE 2 Biggest retirement misconceptions

While the idea of retirement has changed, certain financial assumptions haven’t.


We’ve all heard about the “new retirement”, the mix of work and play that many of us assume we will have in our lives one day. We do not expect “retirement” to be all leisure. While this is becoming a cultural assumption among baby boomers, it is interesting to see that certain financial assumptions haven’t really changed with the times.

In particular, there are two financial misconceptions that baby boomers can fall prey to – assumptions that could prove financially harmful for their future.

#1) Assuming retirement will last 10-15 years. Historically, retirement has lasted about 10-15 years for most Americans. The key word here is “historically”. When Social Security was created in 1933, the average American could anticipate living to age 61. By 2005, life expectancy for the average American had increased to 78.1

However, some of us may live much longer. The population of centenarians in the U.S. is growing rapidly – the Census Bureau estimated 71,000 of them in 2005 and projects 114,000 for 2010 and 241,000 in 2020. It also believes that 7.3 million Americans will be 85 or older in 2020, up from 5.1 million 15 years earlier.2

If you’re reading this article, chances are you might be wealthy or at least “affluent”. And if you are, you likely have good health insurance and access to excellent health care. You may be poised to live longer because of these two factors. Given the landmark health care reforms of the Obama administration, we could see another boost in overall American longevity in the generation ahead.

Here’s the bottom line: every year, the possibility is increasing that your retirement could last 20 or 30 years … or longer. So assuming you’ll only need 10 or 15 years worth of retirement money could be a big mistake.

In 2010, the American Academy of Actuaries says that the average 65-year-old American male can expect to live to 84½, with a 30% chance of living past 90. The average 65-year-old American female has an average life expectancy of 87, with a 40% chance of living past 90.3

Most people don’t realize how much retirement money they may need. There is a relationship between Misconception #1 and Misconception #2 …

#2) Assuming too little risk. Our appetite for risk declines as we get older, and rightfully so. Yet there may be a danger in becoming too risk-averse.

Holding onto your retirement money is certainly important; so is your retirement income and quality of life. There are three financial issues that can affect your quality of life and/or income over time: taxes, health care costs and inflation.

Will the minimal inflation we’ve seen at the start of the 2010s continue for years to come? Don’t count on it. Over the last few decades, we have had moderate inflation (and sometimes worse, think 1980). What happens is that over time, even 3-4% inflation gradually saps your purchasing power. Your dollar buys less and less.

Here’s a hypothetical challenge for you: for the rest of this year, you have to live on the income you earned in 1999. Could you manage that?

This is an extreme example, but that’s what can happen if your income doesn’t keep up with inflation – essentially, you end up living on yesterday’s money.

Taxes will likely be higher in the coming decade. So tax reduction and tax-advantaged investing have taken on even more importance whether you are 20, 40 or 60. Health care costs are climbing – we need to be prepared financially for the cost of acute, chronic and long-term care.

As you retire, you may assume that an extremely conservative approach to investing is mandatory. But given how long we may live – and how long retirement may last – growth investing is extremely important.

No one wants the “Rip Van Winkle” experience in retirement. No one should “wake up” 20 years from now only to find that the comfort of yesterday is gone. Retirees who retreat from growth investing may risk having this experience.

How are you envisioning retirement right now? Has your vision of retirement changed? Is retiring becoming more and more of a priority? Are you retired and looking to improve your finances? Regardless of where you’re at, it is vital to avoid the common misconceptions and proceed with clarity.

Reeve Conover may be reached at 877-423-9990 or



This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information..,,


1 – [4/27/08]

2 – [10/23/05]

3 – [5/3/10]



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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA. - SIPC - Brokercheck