By Edward Leone JJr. DMD MBA CFP RFC
Contact Information: leonee@vzw.blackberry.net
Well, the Supreme Court has delivered it’s decision on health care reform. I find it confusing, containing contradictions and political. I am not a lawyer, but it appears that the Court has just thrown this issue back into the lap of the Congress! We will have to continue our wait and see approach to a conclusion. It must be understood by all that medical insurance as we know it today is really prepaid cost sharing and not insurance in the purest sense.
One aspect of the health care issue which dates back to the Bush years is the conversion to the electronic health record. The mandate for conversion is targeted for 2014. According to Tania Karas, a writer for Smart Money Magazine, there have been many security problems with the electronic health records in existence now. In 2009, there were 420 security breaches involving 19 million patients. These kind of statistics will likely delay implementation in order to have better security against unauthorized release of information and fraud.
Aside from accelerating health care costs and college tuitions, the price of automobiles is also up. The average cost of a new car sold in the US is $30,748 as compared to $28,771 just a year ago according to the Journal of Financial Planning. We are also seeing elevation in grocery prices while gasoline prices have moderated a little.
It is reported that Social Security disability rolls have increase by 23% since 2007. It is clear to me that the state of the economy has much to do with this trend. Those who qualify and cannot find work, will certainly apply for the benefit which averages $1,111 per month. These individuals can also go on the Medicare program after drawing benefits for 2 years. Last year, the cost for the SS disability program was $132 billion to tax payers as reported by Bloomberg.
Many people are looking for investments which provide an income stream which is better than can be achieved in the investment grade bond market or with bank CDs. Such investment vehicles as REITs and ETFs are areas with this type of potential, but are not well understood by many. It is best to seek the advise of a fee only registed investment adviser over these matters since they are held to a fiduciary standard which causes them to act in the best interest of a client. Broker dealers are not held to this standard.
As we get closer to election time the rhetoric on the economy will turn up. It will be interesting to see if the Federal Reserve will take further stimulus action or hold the money supply and interest rates steady. The soap opera in Europe continues with daily fluctuations in the potential for resolution. These unknowns will further delay economic growth and job creation in my opinion.
For The Record:
DJIA 12,880.09
NASDAQ 2,935.05
S&P 500 1,362.16
Suggested Reading: “Point and Figure Charting” by Thomas Dorsey
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