On the “house” side
The SP 500 breached the 5300 mark recently. Artificial Intelligence related stocks keep soaring. Inflation moderating. Goldilocks market? Not so fast. There appears to be continued nervousness in regard to inflation. Every piece of price and economic news is parsed for signs of the arc of inflation. This market vulnerability leaves the market subject to volatility. Today, after digesting the blow out earnings of Nvidia, a semiconductor stock benefiting from the artificial intelligence boom, markets received Fed news about higher interest rates for longer and sold off. There is noticeable divergence on some days with growth stock soaring while value stocks languish. Other days result in the opposite. Some days small and mid-sized stocks outperform big cap stocks with other days reversed. We are not in the business of predicting the future, so we allocate our conservative stock allocation across all asset's classes, rebalancing periodically. We love being on the “house” side when it comes to the stock market. This strategy requires patience because you have to experience a market cycle to achieve the benefits
Have you renewed your property and casualty insurance lately? Don’t be surprised with the increase in your premiums. California is in the midst of a property and casualty insurance crisis. Wildfires have thrown the market into turmoil with the carrier of last resort being a state fund with very expensive premiums and skeleton coverage. The best you can do now is do not try to change carriers. Stick with current coverage and pay the premium. If you attempt to switch carriers, you can get initial approval but with further due diligence, the carrier can refuse to cover you leaving you to bear the risk on your own. Auto insurance rates may have peaked at these higher levels. Where is the competitive marketplace when you need it? The bottom line for insurance carriers is profitability. Recent history says the risk is greater than the reward. Warren Buffett loves to own insurance companies like GEICO because he gets to invest the premiums until claims are paid out much later. In the case of CA, the insurance companies do not get to hold onto the premiums for very long because claims are being paid out each year. The CA state commissioner of insurance is trying to change the insurance rules to keep more companies covering Californians but regardless of the rules, bottom line premiums are rising.
This website is informational only and does not constitute investment advice or a solicitation. Investments and investment strategies recommended in this blog may not be suitable for all investors. SAS Financial Advisors, LLC and its members may hold positions in the securities mentioned within this newsletter. SAS Financial Advisors, LLC is not responsible for any third-party content referenced.
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