Is there a Disconnect between Wall Street and Main Street?

By Ken Mahoney

October 2009

While most of us are concerned about the high unemployment rate – currently running around 9.7%, the poor housing market and reduced consumer spending the stock market has shown significant gains. Just since the spring of this year the market has rallied 30 percent or better. So why do we see these gains on Wall Street despite the concerns of Main Street?

Often with the market we see these extremes. We see it like a rubber band stretching and contracting. Earlier this year, we saw the rubber band being stretched on the downside - the fundamentals were poor and the market fell off sharply. Now, we're seeing the other side. Both trailing and forward P/E ratios are at some of the highest levels to date. During the past six months the market has performed well in large part because of a sense of optimism with regard to both national and global economies. The financial markets appear to be doing well, leading many, including Federal Reserve Bank chairman Ben Bernanke, to declare the recession is over.

Governments around the world have provided funding to help stabilize failing or potentially failing financial institutions and large corporations and as a result we are seeing the improved positions of these financial institutions and corporations. At the same time experts state the U.S. government is operating at a 10% deficit. Added to mix is the devaluation of the U.S. dollar – since the early 1970’s the value of the U.S. dollar has decreased 25%. But is the upswing in the market that we are seeing real and long term? What Wall Street is considering profit may in fact just be the bail out funds. Unfortunately, fixes are generally temporary and the failure of certain industries – the airline industry for example as well as small businesses – could be next.

And yet, despite the concerns of Main Street, we do see Wall Street performing well and we see small investors, not just the large institutional investors, with the opportunity to take advantage of these optimistic market conditions.

I welcome the opportunity to discuss Wall Street versus Main Street with you in greater detail. Please feel free to call me at 845/371-0101 or email me at kmahoney@auroracapital.com

And don’t forget to visit my blog for additional articles and comments - http://kenmahoney.blogspot.com/

Everything you wanted to know about Health Care, but were afraid to ask, by Ken Mahoney

Mahoney Asset Management

Your health will drive your retirement decisions and options. The older you get, the more likely it becomes that health care will be a major and recurring concern. You need to be very careful when choosing and using health care providers--as well as other people who can make life and death decisions for you, when you can’t. You’ll want to consider long-term care insurance, Medicare Part B, Medicare Supplemental and Medicare Part D. You may also profit from understanding the various Medicaid tricks, traps, and troubles which have bankrupted many a family when one member needed nursing home care.

What you need to know about health insurance

With the health care costs continuing to rise, it is important to understand that health insurance is not really an option for most individuals—more like a necessity. While you are working, most employees obtain a health plan from their employer, but once you hit retirement the employer paid premiums, low co-payments, and cheap out-of-pocket expenses for you may get thrown out their window. Unless your retirement with your employers covers your health insurance after retirement (which most do not) then you need to consider what options of health care coverage are available to you. And choosing the best health insurance policy and coverage takes time to research before you can make a decision on which is the right plan for you and your needs.

Health plan coverage

There are many health plans to choose from and these plans also have many features and exclusions. The older you get, the harder it can be to get health insurance coverage. So keep in mind that the sooner you can establish one after retirement and the healthier you are when you get one, the better off you will be where the costs, terms, and conditions of the policy are concerned.

Types of coverage
There are five main areas of coverage you need to be concerned with when shopping for a health insurance plan--major medical coverage, choice of health care providers, lifetime maximum benefits, deductibles and co-payments, and guaranteed renewals.

Major medical coverage is your primary concern because it is the most expensive part of health care that can drain your wallet if you have a major accident or are diagnosed with a major illness. This type of coverage includes hospital stays, visits to the doctor, X-rays, and laboratory work.

The next type of coverage you need to be concerned with is your ability to choose the doctors and specialists you want. While being able to choose any doctor you want should not be the deciding factor for you to choose a health plan, you should be aware of what your patient rights are with the policy. A plan that allows you to choose any doctor may be very expensive—making it cost prohibitive for you to have. a contestant. mafia and townspeople are chosen at random.

The most common and least expensive of health plans are Health Maintenance Organizations (HMO) plans and Preferred Provider Organizations (PPO) plans. Both HMOs and PPOs help to keep the cost of health insurance, co-payments, and out-of-pocket expenses down.

While there are differences between HMO and PPO plans, these plans have more similarities than differences. The main difference between the two plans occurs when the doctor you wan to see is not on the preferred provider list. If you have an HMO, it may not cover the cost of services from the doctor. A PPO may still pay the majority of the expenses, and then you are responsible for paying the rest.

The third item you want to be ware of when shopping for a health plan is the lifetime maximum benefits. This is the total amount the insurance will pay over the life of the policy. Ideally, you may want to choose a plan that has a maximum lifetime benefit of $5 million or does not have a maximum limit at all—just in case you have a scenario where you come down with a major disease or have a horrible accident.

Fourth, you need to consider the deductibles and co-payments involved with the policy. These two items have a direct affect on the premium of the policy, so the higher the amount of the deductible and the higher the amount of the co-payments, the lower the monthly premium payments. The best way to keep your health insurance premiums affordable for you is to choose a plan with the highest deductible and co-payments you can afford.

Finally, you may want to seek a plan that has a guaranteed renewal feature—especially as you get older. This feature allows your policy to continue to renew, unless you cancel it, regardless of your health condition and without having to administer to a physical exam. Again, as we age, our bodies are more susceptible to illness, disease, and complications. We need a policy that sticks by us no matter how healthy we are as we age. The guaranteed renewal feature extends our protection at a time when we probably need it the most.

Visit us at www.thesmartinvestors.com

Now What? book sold on Amazon

How to maximize your retirement savings if you are a late starter by ken Mahoney
www.thesmartinvestors.com

Are you closer to retirement than you would like to be without a retirement account in place? Have you been freaking out while reading this book, trying to figure out how in the world to get started saving for retirement at this late date? No worries--getting a late start on retirement savings is better than never getting started at all. Even though time is not on your side, there are a few things you can start doing now to maximize your savings for retirement.

Start now
You have delayed enough, so whatever you do, do not procrastinate any longer. Even if you only a have a few years left until retirement, take for granted the time you have and use it to your advantage. So whether you have 2 years or 20 years left, it is important to start planning and saving for retirement as soon as you can. Don’t worry about how much you can save either. Whether you can afford to save $25 per month or $250 per month, saving it now is better in the long-run than waiting until later to do something about your retirement.

Be conservative
If you are a late starter, it doesn’t mean you should go into saving and investing like gangbusters. Being aggressive and taking a lot of risk can do your retirement savings and investments more harm than good. Be wise and approach investing your money conservatively. It is important to grow and increase the value of your retirement account, but it is just as important to protect the principal you invest in the first place.

Get help
Try not to play the hero either. Do-it-yourself retirement savings hasn’t been your forte up until now if you waited to the last minute to start, so you should consider getting some professional help and advice. Everybody needs a little help sometime and your time may be now. Consider working with a Certified Financial Planner or Financial Advisor, who will help you put your goals on paper and create a realistic plan to help you carry it out through your retirement years. Financial planners can help you to turn your plans into actions—actions that help you achieve your retirement goals.

Take time into consideration
With your retirement savings plan in place, you should invest for the highest possible return for the time you have left until retirement. Obviously, the more time you have until retirement, the more risk you can take with your investments. The less time you have until retirement, the less risk you can take with your investments. Many high return investments seem like a good idea but these investments are usually volatile. If you take too much risk, you put your principal in danger.

So while a late start is better than no start at all, it is important to take the steps necessary to preserve your principal. Take the time to consider your investment opportunities before launching into any type of retirement savings plan and try to get some professional help to increase your odds of achieving your goal. Do not wait any longer than now to start some kind of a retirement plan and fund. Leverage what you have today to create your future.