Time To Buy?

Should I buy? Should I sell? Right now, many people are wondering if they should buy stocks since the S&P 500 is up 57% since the lows in March.

The stock market is a barometer for future economic activity. Expectations by economists and financial analysts are 3.5% growth in the 3rd quarter and 4% over the next year. One has to ask, what has changed? and where will this growth come from?

Think of: cash for clunkers, first time home buyer credit, $1 trillion added to the national debt, etc. This is government steroids that can not go on forever.

The personal savings rate is at levels not seen since the 1950's. Unemployment is going up. Businesses are cutting prices and keeping inventories lean. People are fearful and that is why gold is over $1,000.

Fundamentally, economic data is not good. The U.S. dollar is losing value, bonds prices are rising and yields are falling, unemployment is going up, and wages are falling. History tells us that returns like we are experiencing today happen when the economy has been growing for a number of quarters and jobs are being added.

In the 2000 to 2002 recession, we had a 21% up move from September 2001 to January 2002 because investors felt we were out of the recession. Over the next 10 months, the S&P 500 fell 31.7%.

Their is a lot of hope and not much data to support the current stock market rally.

College Student Insurance Options and Savings

Many children have headed off to college over the last couple of weeks. If you are parent who has a child in college be sure to review your various insurance policies to protect your child and possibly save you money.

Auto Insurance: If the campus your child attends is at least 100 miles away and their car stays at home you should qualify for a discount on your premium. How much will depend on how much your premiums increased when you added your child to your policy.

Student Housing: A student's dorm room qualifies as an additional room on your home owner's insurance. Coverage is usually limited to 10% of the amount of your total insured possessions. As an example, if your home is worth $500,000 and you have 50% coverage for the contents of your house, the insurer will pay up to $250,000 for the contents of your home. Anything in your child's dorm room would be covered up to $25,000. If the student lives off campus you will need to purchase a separate renter's policy to cover the child's personal items.

Health Coverage: Full time students are covered under a parents policy until age 23 or possibly older. Some states have extended the age limit so check your state's rules. Individual policies for 18 to 24 year old students cost an average of $1,284 according to eHealthInsurance.com