Financial Advisor Tempe, AZ

Weekly Market Commentary – 11/12/2018

For the Week of November 12, 2018

The Markets

The three major indexes fell Friday as oil prices dropped 1.0 percent amid a rising global supply and the Federal Reserve appeared on track to raise interest rates next month. Reports from China indicating falling domestic demand and manufacturing activity increased downward pressure. For the week, the Dow rose 3.00 percent to close at 25,989.30. The S&P gained 2.21 percent to finish at 2,781.01, and the NASDAQ climbed 0.68 percent to end the week at 7,406.90.

Returns Through 11/09/18 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) 3.00 7.17 13.33 16.42 13.24
NASDAQ Composite (PR) 0.68 7.29 9.73 13.28 13.58
S&P 500 (TR) 2.21 5.74 9.73 12.48 11.73
Barclays US Agg Bond (TR) 0.25 -2.41 -2.19 1.32 1.99
MSCI EAFE (TR) 0.23 -7.96 -5.55 4.81 2.67

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

Waiting for the Right Person — Among Americans who married in 2017 for the first time, the median age for men was 29.5 years old and the median age for women was 27.4 years old (source: Census Bureau, BTN Research).

Super-Size It — Thirty-five percent of workers surveyed in the fall of 2017 who are participating in and contributing to a 401(k) or similarly defined contribution plan are deferring more than 10 percent of their pretax wages (source: Transamerica Retirement Survey of Workers, December 2017, BTN Research).

Tough October — The S&P 500 lost 6.8 percent in October 2018 (total return), its worst month in more than seven years (since a September 2011 loss of 7 percent) and its worst October since the index fell 16.8 percent in October 2008 at the beginning of the global real estate crisis (source: BTN Research).

WEEKLY FOCUS – Making It Easier for Future Caregivers

A person turning 65 today has a nearly 70 percent chance of needing some type of long term care in their remaining years. Of those who do, 20 percent will need it for more than five years. Given those odds, chances are pretty good you’re going to need a caregiver (or become one) at some point.

Health care often becomes one of the most expensive aspects of retirement years, and long term care can become the costliest element within health care. In 2016, the average cost of a private room in a nursing home was $92,000; a shared room was $82,000. The average cost for a home health aide at $20 per hour working approximately 30 hours per week was $31,000 annually. For assisted living, the 2016 average base rate was almost $46,000 per year. Yet, despite the statistics and long term care costs, few Americans are taking steps with their personal finances to provide for such an event.

While many people turn to family and friends for unpaid care, that doesn’t mean there won’t be costs involved. There will be. Caregiving can turn a family member’s life – and finances – upside down. Many caregivers reduce their work hours, take a less demanding job (with less pay) or give up their jobs entirely. They are also often hit with direct costs in addition to the loss of wages and benefits.

Here are some startling facts on the financial toll caregivers experience:

A Northwestern Mutual survey revealed 68 percent of family caregivers provided financial support. Of those who incurred expenses for caregiving, 67 percent had to reduce their own living expenses; 63 percent withdrew money from savings or cashed or sold assets; 32 percent stopped or reduced their contributions to savings; and 21 percent borrowed money to provide care.

Lack of planning can result in financial tolls on both you and your caregiver.

Preplanning today for long term care tomorrow can reduce the chances you or your caregiver will have to resort to such drastic measures. Call our office today. We can help you develop a financial plan that includes a caregiving situation, removing or reducing financial stress on both you and your potential caregiver.