Friday Financial Five—May 31st,  2013

Friday, May 31, 2013

Dan Forbes, GoLocalProv Financial Expert

 

View Larger +

Quantitative easing will end at some point

Signs of strength in the economy have the bells ringing for the possible winding down of fiscal stimulus. The 30 year mortgage rate recently hit its highest point in a year, with bond values getting hit and refinance activity being negatively affected. If this truly marks a seismic shift in federal buying of mortgages and treasuries, bondholders will have to get more defensive minded. Mortgage lenders should have already prepared to shift focus from refinancers to home buyers.

The health care exchange is almost upon us

October 1st is less than five months away. On numerous fronts, there will be a high pressure push to prepare for the revolution in how people in the state obtain health coverage. On one side is the state group tasked with getting the website up and running by the deadline. On another side are individuals and business owners educating themselves about private coverage versus the product offered by the state. Once the exchange is underway, the state will have until the end of 2014 to operate free of the federal funding training wheels.

Homeowners insurance costs are on the rise

A trend sure to be unpopular with owners of homes is the rising cost of home insurance. Storm losses are causing many insurers in the area to dramatically raise rates or forgo insuring homes in certain areas altogether. It’s more imperative than ever to do the proper homework (pun intended) to ensure proper coverage at a reasonable price.

GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST

Commercial real estate

While the latest residential housing numbers show continued improvement, the same pattern can’t necessarily be identified for commercial real estate. Recent pricing measures show a slightly negative trend for the first quarter, according to CoStar. It may be seasonal and prices have indeed risen from a year ago, but the “office index” and the “retail index” both increased by less than 3%. It’s reasonable to ascertain that commercial buyers shouldn’t expect the same recovery trajectory as the residential sector.

“Crowd funding” as part of portfolios

A relatively new form of alternative investment is the concept of “crowd funding”. Individuals are able to contribute money to a variety of projects or companies online. The ability to participate in an equity position is currently reserved for projects with investors who are accredited, but there is a push to change this. For example, Kickstarter allows contributions to movie and video gaming projects, but contributors can’t participate in the ventures’ success. In hindsight, it’s also the venue that probably would have best suited Curt Schilling’s 38 Studios.

 

Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected].

 

Related Articles

 

Enjoy this post? Share it with others.

 
 

Sign Up for the Daily Eblast

I want to follow on Twitter

I want to Like on Facebook