The Financial Storm On The Horizon:
4 Ways A Recession Might Play Out
Americans are becoming more pessimistic about what the coming year could hold for them financially, with a Gallup poll1 reporting that 48 percent say the economy is worsening, up from 45 percent in December and 36 percent in October.
But if bad news is what 2019 has in store for us, no one should be caught off guard completely, says Craig Kirsner, MBA (www.StuartPlanning.com)2, a retirement planner and author of Retire with Confidence: Preserve and Protect Your Wealth and Leave a Legacy.3
“Frankly, I find it surprising that people are shocked that the stock market went down substantially two times in 2018,” Kirsner says. “Do markets go up forever? No. Are 13.2 percent average annual S&P 5004 returns since 2009 normal? No.
“Hopefully, anyone who is in or near retirement is taking this opportunity to reduce the risk in their retirement portfolio to a level that they’re comfortable with.”
Unfortunately, Kirsner says he suspects not everyone is doing that.
“Our brains are designed to remember the good times and forget the bad times5,” he says. “This is why people believe that markets that are going up will keep going up, and may forget the impact of losing a portion of their portfolio like they might have was back in 2008-2009.”
Kirsner has predictions for how he thinks things eventually could play out, if not in 2019 then perhaps soon after that:
The next recession. The markets will go down drastically in the next recession and like with any other recession we do not know how far the markets will drop, Kirsner says. “Consumer spending generally slows down considerably as people tighten their finances.”
Deflation. Recessions can bring deflation, which is when prices go down year after year, Kirsner says. “Deflation may come as this credit-fueled bubble bursts and people spend less and borrow less,” he says.
Lower interest rates. The Fed likely will use its tools to try to fight the recession just like they did in previous recessions, meaning they will probably lower interest rates again, Kirsner says. “I believe that we may even see negative interest rates in the United States,” 6 he says. “Negative interest rates mean that, were you to put your money in a 10-year government bond, you might earn -0.5 percent interest per year. Indeed, 10 years later you would get slightly less than what you put in. Why would people buy negative interest rate bonds? Because they think that interest rates will go even lower, perhaps to -1 percent in the future – or even lower.”
More borrowing. The Fed’s goal for using negative interest rates would be to encourage people to spend money instead of keeping it in banks. “They want people to borrow more money – more mortgages, more corporate debt, more auto loans, etc. – and lower interest rates should encourage people to spend using debt,” Kirsner says. “That’s good for a debt-fueled bubble and our consumer-spending based economy.”
Despite the concerns, Kirsner says he’s still hopeful that 2019 will bring a good year in the market.
“But that does not mean that I would recommend a retiree throw caution to the wind and invest everything in higher-risk stocks,” he says. “If we do have a recession in 2019, you don’t want to lose half your portfolio.”
About Craig Kirsner, MBA
Craig Kirsner, MBA, (www.StuartPlanning.com) is a nationally-recognized author, speaker and retirement planner whom you may have seen on Kiplinger, Forbes, Fidelity.com, Nasdaq.com, U.S. News & World Report, AT&T, Yahoo Finance, MSN Money, Bankrate.com, CBS, ABC, NBC, FOX, Newsmax, Valuewalk and many others. Craig is the author of Retire With Confidence: Preserve and Protect Your Wealth And Leave A Legacy and creator of the Preserve and Protect Retirement System. He has an MBA in finance from Florida International University. He is an Investment Adviser Representative who has passed the Series 63 and 65 securities exams and has been a licensed insurance agent for 26 years.
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Is A Nose Job A No-No For Your Kid?
Parental Tips On Teen Plastic Surgery
Plastic surgery in the past was an option most often associated with adults, especially older adults, who desired to improve their appearance. But the number of teenagers undergoing plastic surgery is trending upward.
Nearly 230,000 cosmetic procedures were performed on patients from the ages of 13 to 19 in 2017, according to the American Society of Plastic Surgeons. Doctors say part of the reason is due to the social media explosion, but they add that it’s also to fix a feature that makes teens a target of bullying, or to address a health need.
Parents can be faced with a quandary: Is the type of plastic surgery their teen wants appropriate or safe for their age?
“It’s very important that a parent know their child’s motive for plastic surgery and that they consult with the surgeon to ensure they are age-appropriate for the particular procedure,” says Dr. Dennis Schimpf, a plastic surgeon, author of Finding Beauty: Think, See And Feel Beautiful, and founder of Sweetgrass Plastic Surgery (www.sweetgrassplasticsurgery.com). “The family needs to be aware of the risks involved and be honest about why they are seeking the surgery. Is it because their child wants to look like a movie or TV star, compete with their appearance on social media, or because they’re getting teased at school?”
“Parents and the surgeon must determine the psychological and social impact the teen is feeling and factor that into the equation. There are procedures that are very helpful to teens from that perspective, but there are others that don’t have enough research to be proven age-appropriate.”
Some plastic surgeries or appearance procedures teens should stay away from, Dr. Schimpf says, include breast enlargements, liposuction and injectables (such as Botox or fillers for lip or cheek enhancement). Dr. Schimpf reviews some other procedures for teens that may be acceptable and helpful depending on the situation.
Rhinoplasty. This is nose reshaping, which is the most common plastic surgery for teens. It’s often performed due to a child being teased at school for having a big nose. Most doctors recommend waiting on surgery until the teenager’s nasal growth is complete, which is usually between the ages of 16-18 in males and 15-16 in females. “This surgery may provide a major improvement for teens, helping them psychologically as well as with confidence in their appearance,” Dr. Schimpf says.
Breast reduction. Performed on teen girls to take away back and neck pain. Doctors emphasize the importance of waiting to do the surgery until the patient has finished breast development, which can be as late as 19 years old.
Otoplasty. This is performed for those with ear deformities or large ears, another subject of school mocking. The problem can be corrected by surgery early, sometimes at age 5, because the ear is almost fully grown at that point.
Noninvasive procedures. Common procedures requested by teens include skin procedures such as microdermabrasion, laser skin resurfacing and chemical peels. “These improve the overall appearance of the skin, like diminishing acne scars,” Dr. Schimpf says.
“A lot of parents are scared of plastic surgery and the messages it sends to young people,” Dr. Schimpf says. “Being open and honest with a board- certified, credible surgeon is always beneficial. And, any conscious surgeon will listen to parents' concerns regarding the well-being of their child."
About Dennis Schimpf, MD, MBA, FACS
Dennis Schimpf (www.sweetgrassplasticsurgery.com) is the author of Finding Beauty: Think, See and Feel Beautiful, and the founder of Sweetgrass Plastic Surgery, a multi-faceted practice focusing almost exclusively on cosmetic plastic surgery of the face and body. He is a fellow of the American College of Surgeons (FACS), as well as a member of the American Society of Aesthetic Plastic Surgery (ASAPS) and the American Society of Plastic Surgery (ASPS).
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J.D. Power has just issued the release for the 2019 U.S. Independent Insurance Agent Satisfaction Study.
The second annual study, developed in alliance with the Independent Insurance Agents & Brokers of America (IIABA), evaluates the independent P&C insurance agent’s business outlook, management strategy, and overall satisfaction with personal lines and commercial lines insurers in the United States.
It confirms that the more satisfied independent insurance agents are with a carrier, the more business they will conduct with that carrier. But unforuntately, it also finds that firms aren't in a position to take advantage of this, because overall agent satisfaction with the service they receive from insurers is among the lowest of business relationships measured by J.D. Power.
Following are key findings of the 2019 study:
--Independent agent satisfaction with carriers linked to placement rate: There is a strong relationship between higher levels of independent agent satisfaction and a greater number of business relationships with insurers. Likewise, independent agents that are more satisfied with the service they receive from insurers are more likely to recommend that carrier and place a greater number of products with that insurer
--Independent agents cite low satisfaction with carriers: Overall independent agent satisfaction with personal lines insurers is 733 (on a 1,000-point scale). For commercial lines, that score falls to 720. These are among the lowest overall satisfaction scores in any business study currently conducted by J.D. Power, lagging even financial advisors (737)
--Support/communication and quoting are keys to agent satisfaction: As the most important factors in determining agent satisfaction, the support/communication factor in personal lines and the quoting factor in commercial lines are key areas for insurers to focus to increase satisfaction
Auto-Owners Insurance ranks highest among personal lines for the second straight year, with an overall satisfaction score of 800. Progressive (762) ranks second while Safeco and Travelers rank third in a tie with 737.
Liberty Mutual performs highest among commercial lines for the second straight year, with an overall satisfaction score of 749. Chubb and The Hartford rank second in a tie with 720.
Full rankings and quotes can be found at the link above.
