Important Deadline for V.A. Benefits Next Week

Dear Clients and Friends -  Please read this time sensitive news for potential benefit. 

I wanted to reach out to you today and let you know about some changes in VA Pension regulations that may impact some of the veterans or spouses of veterans that you know. 

Effective Thursday, October 18, 2018, the VA Pension program will be implementing a 3-year look-back period where all asset transfers will be closely evaluated by the VA.

If the VA believes that the veteran or spouse transferred assets for the sole purpose of qualifying financially for pension benefits, the VA may impose up to a 5-year penalty on the veteran that would block the veteran from receiving the necessary pension benefits.

Additionally, the VA has made some modifications to their definition of “net worth” for Pension program purposes and this may impact some veterans and put them over the financial limit to qualify for pension benefits. 

Any asset transfers that are undertaken prior to October 18, 2018, will NOT be subject to the 3-year look-back period.

So, if you know of veterans or spouses of veterans that may be needing VA pension benefits or Aid and Attendance benefits in the immediate future generally used to cover the cost of nursing home-level care, I would love to talk to them and see if there are any changes needed to their financial planning strategies so they can potentially qualify for VA pension benefits.

Any asset transfers that are undertaken on or after October 18, 2018, will be subject to the 3-year look-back period. So, any veteran or spouse who may need VA pension benefits should have a qualified financial planner and VA accredited claims agent review their specific situation to get the wheels in motion. 

I have a colleague, Christina Clark, who is a VA accredited claims agent and disability advocate, and she will work with me to assist any veteran or spouses of veterans who have interest in learning more about these VA pension regulation changes and how it may impact them in the future.

Please call me at (954) 719-1151 to schedule a time to talk!
My e-mail address is: Unterbrink@usa.net also.

Warm Regards,

~Barry L. Unterbrink

Chartered Retirement Planning Counselor

Stocks Sell Off 3%; Time to Have Your Plan in Place

It was a particularly nasty day Wednesday for the U.S. stock market. The selling started off from the get go at 9:30 a.m. on the opening, and continued into the close at 4:00 PM.

The reasons that could be used for the selling today include the recent march higher in interest rates, the uncertainty of the quarterly earnings reports to begin flooding out next week, the effect of the trade tariffs with China – to name a few. At the end of the day, sellers outnumbered buyers 9 to 1.

The popular Dow Jones Industrials fell around 830 point or 3%, the S&P 500 fell 3.3%, while the Nasdaq Composite shed 4%. Ninety percent of the trading volume was down trades. The Dow Jones stood at the 800 level when I started in this business, many moons ago !

The best performing sector, Utilities fell about ½ percent today, and very short term bond funds were break-even to up about 1/5^th percent. All 11 S&P sectors fell some to degree Wednesday. Gold rose $4 an ounce to $1,194 the ounce, so it did not provide much of a cushion; at least not yet.

We’ve enjoyed some nice gains the past few months in Technology and the Health Care sectors. They are ahead year-to-date 13% and 11% respectively after today’s sell-off. Just four sectors are losers this year thus far: Financials, Real Estate, Consumer Staples and Materials.

Before panic sets in, consider where we have come this year, on top of the nice gains of 2017 – up 25% - the Dow is back to where it stood in mid-August, while the S&P 500 is equal to its mid-July level. Generally the last two months of 4-6 % gains in these two indices has been erased thus far in October. For a long term investor, that should not be a concern…BUT, you have to assess what you own and how tough a stomach you have to hold stocks with losses – or perhaps gains that are eroding. For that, you need to do some math. Grab that calculator, or slide-rule. 

We suggest, as we’ve stated here regularly, to use a stop price at which you will sell. Your broker or advisor should be talking this up as part of your portfolio strategy. 

For instance, if you bought a stock or mutual fund for $100, you would sell it at $92 for an 8% loss if you used an 8% stop price. If you have further questions on this, e-mail me for a look-see on how to set this up. I offer free consultations.

Interestingly, on a historical basis, the last stock market bear market – the 2007 – 2009 financial crises, started in early October 2007; the 9^th of October to be exact. The Dow stood at 14,164 that day, and fell to 6,547 by March 2009, a 53% loss. It would take another 4 years, to March 2013, for the Dow to break above the 2007 high. That’s a lot of time to fret and second guess things.

So I recommend to have a plan, enact it, and then follow it. Take your emotions out of the equation.

Thanks for reading friends.

Labor Day's Origin; Market Update

As we head into the Labor Day weekend, I wish all of you - clients and friends - a safe and enjoyable time off with your family and loved ones.

Labor Day History

Labor Day honors the American Labor Movement and the contributions that workers have made to the strength, prosperity, laws and well-being of the country. 

Trade Unionists first set forth the idea in the late 19th century. The Central Labor Union organized the first parade in New York City in 1882. Oregon was the first state to make Labor Day an official public holiday 5 years later. By 1894, it was proclaimed as a Federal Holiday.

The selection of the date to celebrate the first Monday is September was thought to be contrived to be equi-distant between the July 4th and Thanksgiving holiday, as it nearly is so today.

Today, we think of Labor Day as the un-official end of summer, when vacations end, schools start back, and the seasons weather turns toward Autumn. Sports fans are ready for football games and baseball playoffs. 

Obviously, designating the day as a Monday holiday greatly helps those who work and wish to get away for a 3-4 day vacation. An estimated 30 million American’s will travel this Labor Day weekend, Friday being the busiest day.

In the financial markets, this summer is anything but boring. Many industries and companies are reporting excellent profits, and their stock prices are moving higher. Stocks are ahead 6% to 9% (Dow and S&P 500), while Gold and Bond prices are mixed with the higher interest rates affecting their attractiveness. Gold’s lost about $100 an ounce this year.

Employment is very robust, and unemployment falling rapidly this year to under 4%. This ‘bull market’ with rising asset prices is now the longest on record, commencing March, 2009. 

These times are getting a bit ‘giddy’ in my opinion. One example: the U.S. has legalized recreational use of marijuana in 5 states now: Alaska, Colorado, Oregon, and Washington state. Add Washington D.C. to that list also. Hmmm, maybe that’s why our politician’s are acting foggy and confused? 

Canada will legalize recreational POT in mid-October. Could this all add up to the great fall of Western civilization as we know it? Time will tell, readers.

My question on all of this (mostly) good news is: what will be the catalyst to cause the BULL to stop running? And what will that look like for investor’s portfolios? Rising interest rates along with inflation? Geopolitical events, the trade situation escalating.

The last bear market - in case you missed it - saw prices fall in half from 2007 to 2009; 17 months to be more exact. An equal fall today would take the Dow Jones Industrials Average down from 26,000 to 13,000. I think that’s not likely; but plausible. One last point for long-term investors. If you are disciplined and long term thinking, you can almost always recover from bear markets in decent shape - if you have the time and don't get too antsy.

To wit: If you bought all your stocks at the market high in October, 2007 - Dow 14,000 - and held them until today; you would have gained 7% on average each year.

Sure, that may not make you the hit of the party vs. your friends who own Apple or Amazon shares (or that 'hot' marijuana farm stock), but you can sleep at night by being conservative and diversifying your money across stocks and bonds, and some cash. And that's not a pipe dream.*  

Do have a happy and safe holiday.     

~Barry Unterbrink, C.R.P.C.

* an unattainable or fanciful hope of scheme.