Latest Newsletter:

Update post election- Read November 20, 2016

 

 

Money Matters airs December 1st, 2016 at noon PST.

 

Thank you to all supporters to our matching funds program Turkey Matters. Participants helped feed many during the upcoming holiday!

 

Marc’s Notes:
Well it has been a while since I posted a newsletter. I didn’t realize it had been so long until I got a few emails from folks thinking they got kicked off the list serve! No you did not, I just got busier (as in very) and lost track of time.

My apologies. It has been busy with the election and all the new stuff I have been doing to improve our services. Also another new station in New Mexico picked up the news and show. That makes about 40 stations so far. Money Matters is also now being carried in some newpapers around the Roseville/Rocklin area. I am not sure exactly how many as one company handles many papers. If you see a Money Matters article down the hill, email me where and in what paper. That is all for now. Stay tuned for yet another surprise announcement in the weeks to come. Now on to business. 

 

On the markets:

What a wild ride. First looking to open down 900 points on the Dow the day of the election to actually ending up when markets opened. The Dow screamed up about 850 points in the days that followed and gold fell. Other anomalies took place such as technology issues falling hard. Also falling hard was fixed income which are the majority of holdings for the proverbial widows and orphans. We also hold a good amount of fixed income so balances fell uncharacteristically. When fixed income falls their yields go up. The higher yield tends to entice buyers so it can be self-correcting and I was not too concerned.  Now that it has been a few days, hopefully markets will stabilize. We took somewhat of a more positive outlook and stance but will not go too far until the Fed meeting in December. Asset rotation (buying of one thing while selling another) was at a very fast clip. This caused balances to bounce all over for many investors. Never sell into a panic it is said. I agree. We will watch the markets and look for clues. I have high hopes for 2017! One number one concern as always is minimize any losses while looking to participate in rallies. 

 

Interest in talking about investing? Email me. We have multiple strategies from principal protection to all growth potential. The combinations are endless and no matter what kind of investor you are, we can help.

 

New services:
I spent the last 6 weeks obtaining a new California Insurance License (#OL34249) with certifications in:

Life Insurance

Accident and Health

Long Term Care

Annuities  

(See the synopsis below for our new services)

 

It was a whirlwind month with lots of study and lots of tests. One particular California state test was only given in Sacramento the day after Thanksgiving. What the hell?

So the Dept. of Insurance directed me to a Reno test center on November 8th. I had to go the Midwest to look into investments so I detoured to Reno and passed that particular test then moved onward. I previewed two investments for us, one there and one in San Francisco earlier in the month. Nothing like boots on the ground for the best view.

While in open meadow country I got to eat Midwestern BBQ overlooking incredible mountain ranges. It was a brief respite on the deck with new friends then back to California to keep working. Both investments look promising but I am still doing research to see if it might be something we can offer you.

I will be contacting clients in the next few weeks to update on new products and answer any questions. Tune into the show, read the articles and enjoy your Turkey.

Jambo!

Marc

 

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With the presidential elections now over and at least a partial ending to the circus of the absurd that it was, the economic question now on everyone’s mind is what will happen to the stock market in the coming days, weeks and months ahead.

 

The markets illustrated their continuing volatility with a wild pre-market indicator on election night showing a drastic start to the next day’s markets as Trump moved ahead during the vote counting only to turn back positive once it was confirmed he had actually won. What a wild ride it was for aftermarket traders!

 

Markets rocketed higher the next day and continued to do so at least for the first few days and at the time of this writing. Assets that benefitted initially were gold, stocks in general, healthcare, Russian markets and others. Interest rate sensitive issues such as bonds and utilities languished.

 

The thinking, at least during the first two days, apparently was that interest rates will rise faster under Trump than was initially expected with a Clinton victory and that more money will be spend on infrastructure and rebuilding certain areas of the economy, boosting company profits.

 

Trump’s talk of an amnesty period for repatriation of corporate overseas assets boosted a few asset classes but technology assets strangely did not exhibit the strength other areas saw.

 

The markets are likely to do some more digesting of what this all means for at least a few more weeks as upcoming statements from Trump will gradually give investors a window into just exactly what his plans are as far as the economy is concerned.

 

Tightly tethered to monetary policy as the market has been in the last decade or so since the start of the housing blow up and banking crisis, what the Fed does under a Trump administration will likely cause continuing volatility in the markets as the Trump show continues to unfold.

 

Since markets never do what anyone expects them to do, trading this market is likely to be next to impossible to accomplish with any sort of certainty at least for a while.

 

It is probably prudent for the average investor to sit tight and let the markets settle down a bit before committing large sums of money in any one direction or in any one area.

 

The old adage of keeping a certain amount of one’s portfolio in a cash position to smooth out volatility and retain purchasing power for the possibility of better prices down the road may be the best advice for the average mom and pop investor. 

 

Our customer portfolios as mentioned in our last musing have been neutral to market negative since about June and although we are now moving toward a more positive stance in recent days, we are still cautious about what might be ahead and therefore are not committing too much new money too quickly.

 

My advice to readers continues to be to consult a qualified financial professional for your investing needs and remember, no one can predict market movements anytime, anywhere. This article is not a recommendation to buy, sell or hold any securities and should not be construed as investment advice.

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Public and large corporate pension plans are widespread, vast in numbers and hold trillions of dollars in the aggregate. They also are the lifeblood of many Americans.

 

Public plans include coverage for federal employees, state and city employees, public teacher’s pensions, large university systems and many more.  Private company plans cover vast numbers of workers. The list is endless and varied and it is estimated over 20 million people depend on or will depend on them for providing income through their golden years.

 

But a disturbing report out from Moody’s’ Credit reporting agency gives us some eye-popping estimates as to what is promised versus what these plans actually have on their balance sheets. In other words, like so many other balance sheets these days, the shortfalls are becoming ominous.

 

The problem lies in the zero to near zero interest rate environment that exists in our monetary world today. The Federal Reserve has pegged their target rate close to zilch (that’s zero in laymen terms) for about 7 years now.

 

That means fixed income investments like bonds and other debt instruments don’t pay not nearly as much as they used to since they have to compete with the Fed rate. Due to their perceived relative safety, pension managers lean toward fixed income products to stack their portfolios so when interest rates drop so does the yield on their portfolios.

 

The problem is further enhanced by the way pensions figure what they will earn versus the amount of money they have to keep on hand and how they balance their books.

 

Based on historical interest rates being much higher, their models have gotten ahead of themselves.

 

Assuming the Feds rates of near zero were going to be temporary emergency measures to address the banking and real estate crisis (the key word here being temporary) many pensions failed to revise their assumed income rates. They failed to do so assuming low rates would give way to higher rates rather quickly.

 

How did this incorrect assumption hurt balances?

 

Incredibly, many plans still assume a return rate north of 7%. This is the crux of the problem.

 

For example, let’s say our local township knows X amount of employees will retire in X amount of years needing X amount of money. Assuming a 7% return compounded, the money the city puts aside will double in about 10 years. Now assume actual rates are at 1%. The money our township set aside now will take 72 years to double. Wham. In ten years’ time, the city’s pension is massively underfunded by about 45%. If more time passes the losses grow exponentially.  It adds up quick under the law of compounding.

 

Now that rates have remained at near zero for so long, if pension managers lower their assumed interest income this late in the game, the amount of cash they will have to commit to meet reserve guidelines would stress their balance sheets to no end not to mention the severe shortage of funds they have to pay off retirees now and in the future.

 

Put simply, near zero interest rates have decimated assumed returns and therefore liabilities have skyrocketed for many pensions plans.

 

Business Insider reports Federal pensions are unfunded to the tune of 3.5 trillion (note the T in trillion). Larry Edelson of Money and Markets says state pension plans are looking at another four trillion in unfunded liabilities.

 

Couple the two together and it equals about 40% of U.S. GDP, a staggering figure to say the least.  Zerohedge reports the top 25 U.S. corporation pension plans are also underfunded by at least 225 billion. This figure doesn’t include hundreds of other large corporations that also use the same models and probably have similar shortfalls.

 

With the stock market reaching new highs and many pension plans also holding equities, the problem may have improved somewhat.  But with the majority of pension holdings in conservative fixed income instruments which are not as subject to market movements, the shortfalls will likely remain at ominous levels before they problem is resolved, with many doubting it can be resolved at all, the damage is that bad.

 

Can you say the mother of all bailouts?


 

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Marc is an Investment Advisor Representative. Full service financial services, retirement planning, portfolio management and more are now available with the portfolio management overseen by Marc himself.

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Marc Cuniberti, award winning host of Money Matters and Money Management Radio, welcomes you to his updated website. Money Matters articles grace the pages of many newspapers and financial media. On this website, you can download any of his radio shows by subscribing on any website page. Sign up for his newsletter or learn about his opinions about the economic world around you by clicking around the site. Of course, the radio shows are the main reason the site is here, so look through the SHOW TITLES page to hear a variety of topics,one or more are certain to peek your interest and perhaps find a show(s) that apply to your particular interest or question. 

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Services

There are many financial products in the market, and so choosing the ones that best meet an individual client’s needs can be complicated.  Informed decisions about the products in any portfolio are best made after an assessment of individual needs. After speaking with Marc, you are better informed when the time comes to choose from a comprehensive lineup of products and services and with Marc's help select those that address your unique situation.

 

Products and services include:

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  • 401(k)
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Insurance is essential to any comprehensive financial security plan. If tragic events like death, disability or critical illness strike, insurance can protect you and your family from undue hardship. Some life insurance policies also provide tax-advantaged savings that you can draw on to achieve goals like buying a house or retiring comfortably.

I have access to a variety of insurance products that can help meet your financial security planning needs. No matter your personal situation—if you’re single or in a family; a professional or a seasonal employee; an executive or small business owner—we will work together to design a customized plan.

  • Life
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Life insurance

In the event of death, life insurance offers surviving family members increased financial security. As a tax-free lump sum payment, it can pay for final expenses and debts, as well as provide income for the deceased’s dependents.

The advantages of life insurance include:

  • An instant estate for your loved ones at a time when funds are most needed
  • Death benefits that are almost always non-taxable for named beneficiaries
  • Avoid probate costs if you name a beneficiary other than your estate
  • Potentially offer your loved ones creditor protection through some life insurance plans
  • Build tax-advantaged capital for retirement purposes or provide liquid savings through some permanent life insurance plans

I can help you select coverage from a variety of life insurance options to meet the needs identified in your financial security plan.

Life insurance can play a vital role in your financial security plan - contact us today to find out how.

 

Long-term Care, Disability and Critical Illness insurance

Help protect one of your most valuable assets – your income – from unexpected events through long-term care, disability and critical illness insurance.

 

Long-term care and disability insurance

Income is important for both current financial obligations (e.g. grocery bills and mortgage payments) and for future financial security (e.g. planning for your children’s education or for retirement). Just think what might happen if you suddenly lost your income stream through a long-term illness or disability.

Long-term care and disability insurance products help protect your ability to earn an income, which can be affected if you are afflicted by a disability or other condition.

I can help you choose the long-term care and disability insurance products that provide advantages like:

  • Helping maintain your financial independence, lifestyle and long-term financial security plan in the event your income is impacted by disability
  • Assist with paying fixed expenses for your business if you become disabled
  • Support the buy-out of a disabled partner’s share of a business

I can help you tailor your financial security plan so it protects your income through long-term care and disability insurance. Contact me today to find out how.

 

Critical illness insurance

Suffering a critical illness is distressing for both you and your family. Help ease the burden through insurance that will reduce financial stresses and can complement disability and life insurance protection needs. By helping pay for the additional expenses often associated with a critical illness or condition, insurance offers you, your family, and if applicable, your business, added financial security—so you can focus on recovery.

The advantages of critical illness insurance can include:

  • Coverage for up to 22 critical illnesses or conditions
  • An initial lump-sum benefit you can use however you wish—from making mortgage payments to seeking medical treatment outside Canada
  • Home-care costs during illness and recovery periods
  • Even if you’re not disabled from working, you may receive payment
  • The ability to provide a return of premium benefit (optional)
  • Individuals who cannot obtain disability insurance in some cases still qualify for critical illness coverage (e.g. a non-income earning spouse)

Contact me today to determine whether critical illness insurance fits into your financial security plan.

 

There are also new “hybrid” plans available that combine the benefits of life insurance or annuities with long term care coverage and at a cost that may be more affordable than you think. Contact me today so we can assess your needs and develop the best strategies for your specific situation to give you the peace of mind you require and protect your family and loved ones.

 

Mark Cuniberti- California Department of Insurance License # OL34249

 

Take a minute to click here and contact Marc directly to schedule a no obligation phone call or meeting:

 

Email: mcuniberti@cambridgesecure.com.  Phone (530) 823-2792 (Please use only this email for all communications to Mr. Cuniberti. Do not use any email addresses given on any shows or other material except mcuniberti@cambridgesecure.com).

 

This website expresses the opinions of Marc Cuniberti. Past performance does not guarantee results. Mr. Cuniberti is an Investment Advisor Representative through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Marc can be contacted at MKB Financial Services 164 Maple St #1, Auburn, CA 95603 (530) 823-2792. 

Discussions on any radio show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions.

Material discussed is meant for general illustration and/or informational purposes only, and it is not to be construed as investment, tax, or legal advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice.

Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor.  MKB Financial Services, Inc. and the Cambridge Investment Group companies are not affiliated.  CA Insurance License #OL34249