FICTION: Younger people can require long term care due to severe unexpected accidents, diseases, illnesses or injuries. The need for long term care can happen at any time during a person’s life. A person will officially need long term care when a licensed healthcare provider certifies they need help doing at least two of the ADLs (Activities for Daily Living) for a period expected to last at least 90 days. ADLs include six specific items: bathing, incontinence, dressing, eating, toileting and transferring. Needing help with just two of the ADLs for at least 90 days triggers the need for long-term care. If your family isn’t providing the care, you will end up paying for it – either out of pocket or through your long-term care insurance.
Find out more about what is available to you and how you can be better prepared for yourself and family at our free seminar. Register here!
FICTION: Most people think that long-term care needs are covered under Medicare or Medicaid – this is NOT true. Medicare pays for skilled care in a nursing home only for short periods of time – up to 100 days. This care is for your recuperation following a hospital stay for a related condition. Once your care needs stabilize, and you need personal or custodial care, Medicare will not pay these costs. Medicare will only pay for care at home under very limited circumstances. Medicaid pays for long term care only for people with very low assets and limited income.
Find out more details about what is covered and what isn’t at our Family Caregiving Challenge Seminar on December 1st. Register here!
Learn more about the Federal Open Market Committee’s decision to increase the federal funds target rate.
At their December 14 meeting, the Federal Open Market Committee raised the federal funds target rate to between 0.50% and 0.75%. The 25 basis point increase was widely expected by financial market participants. Senior Federal Reserve officials revised their projections for future rate increases. There’s still a wide range of opinion, but the median forecast for the number of rate hikes in 2017 edged up to three (versus two in September). Raymond James’ Chief Economist Scott Brown cautions investors that the dots in the dot plot are not a plan. They are but an expectation. Actual Fed policy moves will depend on the economic data, with a focus on the job market and the inflation outlook.
After extraordinary monetary stimulus, many view the fact that rates are headed higher, albeit gradually, as a sign of the Fed’s confidence in the job market, the pace of inflation and the “remarkably resilient economy,” which Fed Chair Janet Yellen acknowledged in Wednesday’s press conference. The Federal Reserve’s move appears to be largely factored into the financial markets. And domestic equity markets seem agreeable to the idea. For now, the equity markets are on an upward path with the Dow Jones Industrial Average within reach of an all-new high of 20,000. Speculation has it that scaling back regulation and expansionary fiscal policy could drive earnings growth. Yields on long-term Treasuries moved up and the dollar strengthened. Oil is also showing signs of strength.
The vote on Wednesday was the first time the Fed chose to raise rates this year and only the second since 2006. Brown maintains that investors shouldn’t see a great deal of change after this rate hike either. Deposit rates generally lag behind the Fed’s changes. Of course, longer-term rates, such as mortgages, should move up but Brown expects the rise in bond yields to be checked by low long-term rates abroad. Bond investors should be reminded that while rate increases do have an inverse relationship with bond prices, the reality is much more nuanced. Long-term investors recognize that carefully selected fixed income instruments are a valuable component of a diverse portfolio, providing capital preservation and income in any rate environment.
With the uncertainty about rates and the election cleared, investors may shift their focus to the outlook for 2017, which is likely to include additional fiscal easing. Chief Investment Strategist Jeff Saut remains bullish (his models suggest domestic indices will climb higher into late January or early February).
Raymond James will continue monitoring factors that could influence the markets, particularly paying attention to future fiscal policy, proposed legislation and tax changes, the strength of the U.S. dollar, earnings growth, global economic growth and geopolitical news. In the meantime, please contact your advisor if you have any questions.
Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. Past performance is not an indication of future results and there is no assurance that any of the forecasts mentioned will occur. Companies engaged in business related to a specific sector are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification. Asset allocation and diversification do not guarantee a profit nor protect against a loss. Material prepared by Raymond James.