1 In 4 Will Face This Reality, And It Is More Like 1 in 3; Disability, Dalbar, and 28% Premium Hikes

1 In 4 Will Face This Reality, And It Is More Like 1 in 3


1 in 4 people currently in their 20’s will become disabled before they retire. One in three ages 35-65 will be disabled for more than 90 days. The average long term disability claim is 31 months. If you require $5,000.00 per month for living expenses, that is $155,000 you would need.  Familiarize yourself with the facts:

  • Accidents are not the culprit. 90% of disabilities are caused by back injuries, cancer, heart disease and other illnesses.
  • Medical problems contributed to 62% of all personal bankruptcies filed in 2007, a 50% increase from 2001.
  • 75% of Americans don’t have enough money to cover their bills for six months.

 
Call us to find out more about disability insurance and receive a quote for basic coverage so that you are handled if anything should happen to you. It is more affordable than you think. May is disability insurance awareness month. Find out more here: http://disabilitycanhappen.org/reducing_chances/
 
Dalbar Study Shows Active Investing Is More Profitable Than Passive Investing for the Average Investor

  • An active investor, or tactical investor, has ongoing buying and selling.
  • A passive, or strategic, investor is a buy and hold investor.

The Dalbar Study is a quantitative analysis that shows how investing approaches succeed or fail with the market each year. As it proves, active investing outperforms passive investing.

  • In 2016, the average equity mutual fund investor underperformed the S&P 500 by a margin of 4.70%. While the broader market made gains of 11.96%, the average equity investor earned only 7.26%. 
  • In 2016, the average fixed income mutual fund investor outperformed the Bloomberg Barclays Aggregate Bond Index by a margin of 0.19%. The broader bond market realized a slight return of 1.04% while the average fixed income fund investor earned 1.23%.
  • In 2015, the average equity mutual fund investor underperformed the S&P 500 by a margin of 3.66%. While the broader market made incremental gains of 1.38%, the average equity investor suffered a more-than-incremental loss of -2.28%.
  • In 2015, the average fixed income mutual fund investor underperformed the Barclays Aggregate Bond Index by a margin of 3.66%. The broader bond market realized a slight return of 0.55% while the average fixed income fund investor lost -3.11%.
  • In 2015, the 20-year annualized S&P return was 8.19% while the 20-year annualized return for the average equity mutual fund investor was only 4.67%, a gap of 3.52%.

These statistics prove that even though the broad index does well, such as the S&P, investors tend to not get those returns since they buy high and sell low. This, of course, is the opposite of what needs to happen. Depending on the investor, many sales are made after watching the news and then getting nervous about a major market downturn. Sometimes it is necessary to sell when the market is down since the economy tends to slow down with the falling market and you might need access to cash. Hence you are forced to sell even though you know it's not a smart move.
 
The investments we carry at TWP Financial are tactically managed so that the money managers are actively buying and selling based on their market indicators or technical data and not on emotion or the daily news. Please call or set an appointment if you would like to see their results in good times and bad times compared to the broad market such as the S&P.
 
What Happens If Obamacare Is Overturned? News Update From Covered California
We received a special communication from Covered California describing the potentially significant impacts to the Covered California program if federal policies change. Main takeaways include:
 
• California premiums could rise by 28 to 49 percent in 2018, and up to 340,000 consumers could lose individual market coverage if changes are made to existing federal policies.
• The potential rate increase would mean billions of dollars in additional federal spending. The 1.2 million consumers who do not receive subsidies would bear the entire brunt of these increases.
• The potential decrease of 340,000 insured consumers would not only represent many individuals losing access to potentially life-saving care, but it would result in a sicker risk mix in the individual market and higher premiums for everyone.    

To Your Health and Financial Wellness, 

TWP Financial