Newsletters - Past Issues

Tariffs and their real costs to American families. More on Fire Insurance update July 15, 2019

Tit for tat.
Do tariffs really accomplish anything besides spawning inflation?

In a recent article from Money and Markets entitled “Fed: Tariffs Will Cost Average Family $831 More in 2019”, the argument was made that after the latest increase from 10% to 25% on $200 billion in tariffs on Chinese goods, the average U.S. family will pay $831 more a year for the same goods they bought last year. What the article didn’t include was the next round of tariffs on Mexican goods. Also not factored in is the rising costs of goods and services as a general result of inflation here in the United States. Indeed no one needs to remind you of the sudden increase is gasoline which pushed close to four dollars or more per gallon in recent months. This also means the approximate 6000 other things made out of petroleum will also likely go up in price.

The average American family is having a hard enough time making ends meet and the challenging effects of increasing prices undoubtedly put more strain on some families.

Tariffs are fees put on incoming goods coming from countries outside the U.S. under the auspices of protecting the American business counterpart of whatever it is you’re applying the tariff to, and/or punishing the other country for some egregious act or violation, as the case may be.

Tariffs are not new and usually there are tariffs on a variety of imports at any one time. To the degree we are seeing them now however is something of a rarity historically.

Because the price of something in the market place is somewhat arrived at by the sum of all prices of the item with slight variances off the average price to account for local demand and conveyance, raise the price of any one major supplier of something and the price of that something will rise. Since tariff money goes to into government coffers and the consumer ends up paying the higher price, tariffs are generally believed to be ultimately paid by the consumer.

I have made the argument in a previous article that should protection of U.S. companies selling into any market where imports are sold competitively, a tax CREDIT to the U.S. company would serve the same purpose. Although tariffs raise the price of a good to the consumer and therefore make a domestic made good that much cheaper in comparison, a tax credit would enable the U.S. company to sell its product cheaper and thus better compete with the import just the same. The difference being the average cost of the good would decrease thereby lowering the cost of the item to the consumer.

I don’t hear the argument for tax credits anywhere in the media and that’s baffling. Both a tariff and a tax credit accomplish the same thing which is to punish the importer and give an advantage to the domestic producer.

As to who pays the tariff and where the money ends up is quite different thing. In the case of the tariff Washington gets the money that the consumer pays in the price increase. In the case of a tax credit, the consumer would pay less for the good and therefore have more money left over to spend on other things. In the latter, the economy would also benefit from higher consumer spending which came from the consumer having more money to spend because of the savings.

This article expresses the opinions of Marc Cuniberti and are opinions only and should not be construed or acted upon as individual investment advice. Mr. Cuniberti is an Investment Advisor Representative through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Marc can be contacted at SMC Wealth Management, 164 Maple St #1, Auburn, CA 95603 (530) 559-1214. SMC and Cambridge are not affiliated. His website is www.moneymanagementradio.com. California Insurance License # OL34249

Do be unprepared and do not panic

Do you need fire insurance, been cancelled or know anyone who has? It can be frustrating. Let me take the worry out of the situation and find you a policy you can live with. Let me answer your questions and guide you through the process.

Join our Facebook Page “Fire Insurance Information and Inquiries” here:

https://www.facebook.com/groups/424062531773299/

This page has updates and posts from other homeowners and people asking the same questions.

Sign our petition on Change.org. Click link below:

https://www.change.org/p/california-governor-fire-insurance-cost-relief-to-homeowners-also-to-the-cal-ins-commissioner-and-congressman-lamalfa

Specifically it asks:

The Organization for Affordable Fire Insurance

The increase in the cost of fire insurance is hitting the working family through no fault of their own. Many can’t afford the massive increases and for many the added costs are crippling budgets and hurting the state economy. We the people of California petition the Governor to allocate emergency funds to reimburse all those that have had premium increases over and above the CPI inflation index. We also request the insurance commissioner to negotiate and regulate insurance companies to resume underwriting in fire prone areas with reasonable and if necessary subsidized rates.

Need guaranteed income for life? Never outlive your money? How about a minimum guaranteed with also stock market upside participation possible? The Best of Both Worlds. Or monthly income? Retirement planning? College planning? Tax free pass on assets to heirs with no tax?

CONTACT ME.

(530) 559 1214

Update on fire insurance, laddering assets and more. June 29, 2019

Join our Facebook Page “Fire Insurance Information and Inquiries” here:

https://www.facebook.com/groups/424062531773299/

This page has updates and posts from other homeowners and people asking the same questions.

Sign our petition on Change.org. Click link below:

https://www.change.org/p/california-governor-fire-insurance-cost-relief-to-homeowners-also-to-the-cal-ins-commissioner-and-congressman-lamalfa

Specifically it asks:

The Organization for Affordable Fire Insurance

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Need income for life?

Never outlive your money

Plan for kids or grandkids College

Help Pass on assets to heirs tax free

CONTACT ME

(530) 559 1214

Laddering assets for diversification

Laddering is a strategy investors can use in a variety of asset classes. Laddering is structuring a number of similar assets with differing time periods or maturity dates. In my opinion laddering is best explained by using Certificates of Deposits (CD) that you would get from a bank.

To ladder a group of CDs, an investor would buy a group of CDs with differing maturities. Typical lengths of CDs are 21 days, 1 month, 3 months, 6 month, 7 months, 9 months, 1 year, 2 year, 3 year, 5 year, and 10 years. There are 11 CDs above with 11 different maturity dates.

An example would be to buy one CD of each length above. This would mean the investor would have a CD coming due according to the maturity dates above. This accomplishes two things. It means the investor would have cash due him when each CD matures, continually making cash available for up to 10 years with 11 dates in total had the investor bought all the CDs listed. Of course not all 11 have to be bought. An investor could buy as many or as few as he desired. In addition to having an amount available at every maturity date, the investor would get a different amount of interest paid to him with each CD. The longer dated ones would usually pay a higher amount with the shorter duration paying less. This is not always the case such as when the yield curve inverts, an event typified by shorter maturity dated CDs paying more than longer dated ones but that occurrence is rare and is a story for another day.

Although the longer dated CDs pay more interest, they are more susceptible to movement in the economy’s general interest level. Since your interest rate on a CD purchased is locked until the maturity, when rates rise for example, you can buy the higher interest rate CDs when each of your CDs matures. If interest rates fall however, you longer maturity CDs would look more attractive, as the higher rates they pay are locked in.

Laddering can also be used on annuities. In this case, an investor would buy a handful of annuities with different payment conditions, different maturity dates and perhaps even differing “gearing” to an underlying index. In other words the investor buys a handful of different annuities. Since annuities come in a variety of structures and there are literally hundreds available, selecting a few different ones might provide an additional level of performance based on what happens in the markets.

Although how one sets up a ladder on whatever asset class they choose will take some knowledge, your investment advisor or some time spent in researching what is available and how laddering works might go a long way in accomplishing better diversification in your portfolio.

Laddering can also be used on a variety of what is called fixed income investments such as individual bonds, mortgages and other types of debt instruments. In simple terms, buying a variety of time sensitive investments with different maturities and conditions might be preferred over owning a lot of just one thing.

Laddering may not necessarily prevent losses. This is not a recommendation to buy or sell any securities. Investing involves risk depending on the type of investment. Consult with a financial professional before making any investment decisions and do your own research before investing.

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Fire Insurance Information and Petition- Money Management Information. Update June 22, 2019

Policies are available and I can answer questions... (530) 559-1214

Join our Facebook Page “Fire Insurance Information and Inquiries” here:

https://www.facebook.com/groups/424062531773299/

This page has updates and posts from other homeowners and people asking the same questions.

Sign our petition on Change.org. Click link below:

https://www.change.org/p/california-governor-fire-insurance-cost-relief-to-homeowners-also-to-the-cal-ins-commissioner-and-congressman-lamalfa

Specifically it asks:

The Organization for Affordable Fire Insurance

Questions about Money Management, new areas of promise in the stock market, income portfolios, green investments or retirement planning with guarantees? Contact me. There is a whole slew of investments that you may not know about!