Commentary

Our Preamble

The purpose of our blog is to provide ethical and endlessly curious views into the world of money and investing. Hopefully, as you read our blog posts, you will increase your knowledge about the use of money, improve your investment results, and reduce the risks and costs associated with the use of money. Our commentary is not crafted to support any political agenda, but will comment on the potential consequences of both current and projected actions of our Government (and others) on the economy, investments, and the efficient use of money.

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The New Healthcare Act

by Art Zaske on March 29, 2010

Our New Healthcare Act: Winners and Losers

Winner: The Insurance Companies: There will be more of us who will be forced to buy coverage because the central provision of the new healthcare law mandates that ALL individuals be insured. The health insurers have already beaten the Obama administration’s feeble attempts to hold back rate increases by already raising rates. Insurance premiums will continue to increase. Watch insurance profits and large company prices rise dramatically in the face of the legislation! Larger companies will command slightly greater premiums than previously experienced, and demand lower prices from providers. The inability to underwrite will drive the smaller out of business because they cannot negotiate the same lower prices from the Providers.

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Are Municipal Bond Defaults Likely?

by Art Zaske on March 2, 2010

Last week, I met a CPA who works for a client of ours. During the meeting, she expounded over and over again on what a great investment municipal bonds represent. She repeatedly asserted, “as long as you hold them to maturity, you will never lose money, and you would have been far better off in the last ten years to make 5% tax free than risking your money in the stock market.” I have also heard this same type of “analysis” from numerous wealthy investors … has it worked? Up until now, it has … but it may be time to sell your municipals and look for safer investments. Yes, safer … it may seem like blasphemy, but many, if not most, municipal bonds are very speculative at this point. Losses may exceed 40% in the coming years… regardless of the economic expansion.

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