In the Winch Financial Investment Department it feels like we just completed evaluating first quarter earning’s reports from corporate America. However, it is now time to start digging through second quarter reported results. Approximately 75% of S&P 500 companies will be reporting second quarter results over the next three weeks. While every earning’s season is important, this quarter’s results might be more important than typical. As reported economic data demonstrated firm signs of growth over the past few months, investors bid the stock market up to all-time highs just last week. With most stock market valuation metrics being stretched, it is now incumbent on corporate America to come through with strong earning’s results and guidance for future results. Corporations need to demonstrate that the strong economic data we have been receiving is flowing through to the bottom line. Last night we received results from the first real corporate stalwart in Alcoa. Alcoa delivered strong results that handily beat Wall Street consensus sales and earning’s expectations and offered a favorable fundamental and financial outlook. As I write this short blog, Alcoa’s shares are being rewarded with a 5.7% surge in early trading today and the stock is trading near three-year highs. Alcoa continues to be a core long-term holding of Winch Financial and we are pleased to see the strong corporate results from Alcoa being recognized by investors. While second quarter earning’s season is off to a good start on the heels of Alcoa’s results, it is just the first of many company scorecards the Investment Department will be scrutinizing over the coming month. Given previously mentioned lofty stock market valuations, we are going to need to see more “Alcoa-like” results throughout earnings season to maintain recent stock market strength.
If you are a parent or grandparent you may not even think about your little one’s ability to purchase life insurance. But the fact remains that when they decide to purchase life insurance for themselves at a later date, they may not be eligible. Life insurance is written and priced based on health and age. With our nation’s health as a whole declining rapidly, the next generation’s ability to purchase affordable life insurance may be threatened. A great example of this would be diabetes. If you as a family member want to take the “what if” out of your little one’s ability to purchase life insurance in the future, you do have that right and option because you have insurable interest. When you do this for your loved one, it should be with a form of permanent insurance. Some options would be Whole Life (WL), Universal Life (UL), and Guaranteed Universal Life (GUL). WL is the most expensive up front but it does lock in a level premium for the remainder of the insured’s life. Universal life would be the least expensive of the three permanent options, but if market conditions change drastically after the policy is written, the planned premiums might not be enough to carry the death benefit for the insured’s entire life. The premiums with UL are adjustable and, if needed, more money in the future can be paid in to keep the policy alive. GUL is a very simple permanent option. It has a level premium and level death benefit for the life of the contract. This type of insurance is also guaranteed to stay inforce as long as the planned premiums are paid. Examples of guaranteed lengths are ages 95-126 depending on the company. With any one of these options, a crucial question to ask is, are there guaranteed future purchase options for the insured? This would allow the insured, regardless of health, to purchase… | Read More »