Quote of the Week
“Don’t argue with an idiot because he will drag you down to his level and beat you with experience.” — Silas Thompson
The markets were fairly quiet last week. The Dow was off 0.9%, the S&P 500 was flat for the week, and the Nasdaq was up 1.3%. For the year the Dow is up 1.5%, the S&P 500 is up 4.0% and the Nasdaq is up 12.2%. The troubling issue is that the FANG stocks (Facebook, Apple, Netflix, and Google) plus other High flyers such as Tesla, etc. are driving the market indexes higher while the rest of the market is doing poorly. This historically is the sign of a top in the economic and market cycles.
Tariffs on Chinese imports that were approved by the Trump administration put a damper on investor sentiment. Additionally, the Federal Reserve was also a source of volatility as stocks dropped following its second short-term interest rate hike in 2018. The Fed has said they anticipate more interest rate hikes to follow. I expect the focus on interest rates and trade negotiations to drive volatility for the remainder of the year.
China just said they will match the Trump tariffs dollar for dollar. Because the Chinese economy is controlled from the top I believe the Chinese can politically out last the U.S. Because this tariff issue is turning into a “who is tougher” scenario it could lead to a recession because no one wins in a trade war.
Traveling Abroad? Get International Medical Insurance
A couple of years ago my wife and I were travelling in Japan when we had a medical emergency. Up until that trip we had never purchased medical insurance applicable to travel outside of the U.S. For some reason we decided this time to buy it. The bill for the treatment and all other related costs was huge but the insurance covered it all. Now we buy it for every trip. To date the combined premiums for all of the policies we have purchased have not come close to the medical costs incurred on that one trip.
When I saw the following article on the Broadridge Advisor website I was reminded of how good it was that we had international medical insurance for that trip. I highly recommend getting this coverage for when you travel abroad.
Health Insurance for International Travel
Some cards are not accepted everywhere
If you are traveling overseas, beware: Your individual or group health insurance may not cover you at all. Even if your policy does cover you, it may not provide the same benefits overseas as it does in the United States. For instance, some policies will cover only emergency medical care, while others will reimburse you or the medical provider for only a percentage of the total cost of treatment. Some policies will cover personal travel but not business travel, while others cover you only if you stay overseas for a short period of time (e.g., one to six months). Check the limitations of your policy carefully, and call your insurer’s customer service or claims department to find out whether you’re covered, and if so, which limitations apply.
Note: If you or your traveling companion is a Medicare recipient, you should be aware that Medicare does not provide coverage for medical treatment overseas.
Adequate health insurance–don’t leave the United States without it
If your health insurance won’t cover your family while traveling, consider purchasing a short-term supplemental health insurance policy from an insurance company, travel agent, tour operator, or cruise line. These policies typically include accident and/or sickness coverage. What’s more, they’re often combined with medical evacuation coverage, which pays all or part of the cost of medical evacuation back to the United States if you’re traveling overseas (something that most basic health insurance policies won’t cover). Policies usually offer a choice of deductibles and may be tailored to suit your needs. You can purchase these policies separately or as part of a travel insurance package that includes other types of travel insurance (e.g., trip cancellation, baggage protection).
Coverage, terms, and costs of supplemental health insurance vary widely, but it’s relatively inexpensive because the coverage is limited. Before purchasing it, ask to see a copy of the policy and get the answers to the following questions:
- Does the plan pay the cost of medical care needed for sickness, accidents, or both?
- What procedures must you follow to see a doctor or go to the hospital?
- Will you have to get approval before you receive care?
- Does the policy pay medical providers directly, or will you have to pay and wait to be reimbursed?
- What are the deductible, co-payment, and/or coinsurance costs?
- What exclusions and restrictions apply?
- What is the maximum amount of coverage under the policy?
- Are translator services available?
- If you are traveling for an extended period of time, schedule checkups for all family members before you go
- Carry your insurance card with you–it usually has a phone number you can call to check on health-care providers, and you may need to show it before receiving health care
- If you belong to an HMO or PPO, bring a list of network physicians and hospitals in the area to which you are traveling
- Pack an adequate supply of prescription drugs in your carry-on luggage
- If you are traveling overseas, find out how you can refill prescriptions while you’re there, and take prescription drugs in their original containers to avoid trouble at customs
- If you are traveling to a country where English is not widely spoken, have your physician’s instructions translated, especially if you or a family member has a serious medical condition–this will help avoid treatment mix-ups
- Consider purchasing trip cancellation/interruption insurance that will reimburse you for any nonrefundable deposits you pay in case you can’t go or must leave early–check policy exclusions first (some policies won’t cover pre-existing health conditions)
Prepared by Broadridge Investor Communication Solutions, Inc Copyright 2018
By the Numbers
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 $13.2 trillion. The entire $13.2 trillion deficit could be eliminated by either an immediate 2.78 percentage point increase in the combined Social Security payroll tax rate (from 12.40% to 15.18%) or an immediate 17% reduction in benefits that are paid out to current and future beneficiaries (source: Social Security Trustees). – Michael A. Higley, BTN 06-18-2018
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These are the opinions of Larry Lof and Stephanie Mayoral and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.The S&P 500 is an index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Indices mentioned are unmanaged and cannot be invested into directly.Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.