Where Should You Invest in Volatile Environments?

What if we see more variants of COVID-19 develop? What if rising energy prices cause a fuel crisis? What if war breaks out in the Middle East? Those are a lot of ifs, but they are possibilities, and if they happen, where are the best places to have your money invested?

You may automatically think of instruments backed by the full faith and credit of the US government, such as US Treasuries, or FDIC-insured savings vehicles, such as fixed-rate CDs and savings accounts.

But these aren’t necessarily the best options, because investors in them are likely to see inflation eat away at their investment returns.

What are some other investment options for volatile times? There are two ways to approach market volatility. You can invest in securities that tend to hold their value regardless of market conditions, or you can try to take advantage of market volatility by investing in securities that are likely to do well because of the risks the world is facing.

If you prefer the first route, you might consider gold or real estate. Historically, gold has been considered a “safe haven” in times of economic, financial and geopolitical instability. And while real estate prices can fluctuate, they’re backed by something tangible: a property that you can live in or rent out if you cannot sell it.

But what if you want to invest offensively? In this case, your options are limited only by your creativity.

For example, if you think tensions in the Middle East might lead to rising energy prices, you could consider investing in energy stocks, such as those in the MSCI World Energy Index.

If you need help determining what kinds of investments meet your needs and risk tolerance in volatile times, we can provide additional input. Please call or email us.

How to Determine if You Need Long-Term Care Insurance

To help cover long-term care costs, many individuals purchase private long-term care insurance. But how do you decide if it meets your needs?

Many of us will require long-term care, such as living in a nursing home or receiving in-home services, and the cost of such services can be overwhelming. According to Statista, nursing home care cost an average of $51,600 per year in 2020, including room and board, drugs and medical supplies. In-home health care can be even more expensive, costing an average of $53,768 per year.

Medicare generally covers only about three months of nursing home care immediately following a hospitalization. Medicaid will cover some long-term care costs, but only after you have exhausted virtually all your personal resources. As a result, many nursing home bills are paid out of pocket by individuals and their families.

Is long-term care insurance right for you? It depends on your income and savings. If you can afford to set aside enough money for about four years of care while still leaving enough to support a spouse or other dependent, you probably don’t need long-term care insurance. Conversely, if your income is $30,000 or less and your savings are not extensive, you are likely to qualify for Medicaid soon after entering a nursing home, so purchasing long-term insurance wouldn’t make sense.

Most people fall somewhere between these two extremes. If that’s the case with you, we can help you decide if you need long-term care insurance, so please call or email us. We’re here for you.