Detroit Bankruptcy (largest in US municipal history) Casts a Shadow on Municipal Bond Market

Barron’s Michael Aneiro spoke this week with Eric Friedland, head of municipal credit research at Schroders, and asked his take on what the Detroit bankruptcy means for the muni market. So far he says it has exacerbated recent market-wide weakness, but it remains a unique case. “There are no other municipalities that we see that are in a similar situation, with population fleeing from the city and demographics that are pretty weak,” Friedland says. “Ahead of this event there was already a big Treasury rate move, and we’ve seen significant [fund] outflows, and since this is a retail-driven market it kind of feeds on itself and can be hard to get out of. This event has added a little more fuel to the fire.” The biggest longer-term impact on the market will likely come from how the bankruptcy court views Detroit emergency manager Kevyn Orr’s attempt to lump general obligation (GO) bondholders in with other unsecured creditors. A general obligation (GO) bond is a municipal bond backed by the credit and “taxing power” of the issuing jurisdiction rather than the revenue from a given Read on! →

The Affordable Care Act – Considerations for the Consumer

It seems that you can’t turn on the news or walk down the street without hearing something about The Affordable Care Act, also known as “Obamacare.” Eric’s blog from July 16th addressed The Affordable Care Act from the standpoint of small business owners. This week, I will break down some of the key issues that you, as a consumer, should know and understand as some of these changes begin to be implemented later this fall. 1.  Where will individuals and families obtain their health insurance coverage? You can still obtain coverage through your employer, individually, or through government programs, such as Medicare and Medicaid. If you are not already covered under a health insurance plan, you can purchase insurance through the Health Insurance Marketplace, also known as the health insurance “exchange,” beginning October 1, 2013. The Health Insurance Marketplace (or Exchange) is administered by either your state or the federal government and provides one location to compare plans and enroll easily. Visit to learn more about the Health Insurance Marketplace and see the details for your state. 2.  Is Read on! →

The Affordable Care Act Considerations for Small Business Owners

As a small business owner I have observed the machinations of the Affordable Care Act from a safe distance.  From its inception, it has served as a divisive focal point for our elected representatives.  As with most comprehensive government policy initiatives, the respective sides have spun the details in a way that works to their advantage.  The Affordable Care Act has not been exempt from this posturing and continues to have its share of supporters and detractors. Over the years I have found that most new initiatives never fully meet the needs of everyone but if looked at more closely, often have appealing features for certain groups or individuals.  While not completely sold on every aspect of the Affordable Care Act, I have decided to assess the various components.  I plan to use this forum to highlight a few basics and expand further in future writings.  In time, my goal will be to make an informed decision on whether the Affordable Care Act is right for my business, my three associates, and for me and my family. The Basics Beginning Read on! →

Retirement Realities – July 2013 Newsletter

We read every day that the average consumer is not adequately preparing for their eventual retirement.  Maybe that comment hits home when you read it or maybe you think they are talking about the guy down the street.  Whatever your reaction, it may be time to consider the realities of retirement and what you can do to protect your future. In the days of Franklin Roosevelt, there was a philosophy called the “community society” where an American worker had a hypothetical three-legged stool to rest upon in retirement.  The three legs consisted of a government Social Security benefit, an employer pension benefit, and an employee’s personal savings.  These three legs were viewed as entirely adequate to fund a retiree’s remaining years, which incidentally lasted only 5-10 years.  As an aside, the third leg, the employee’s personal savings, was really viewed as “gravy” for the extras that might be desired in retirement. Over the last fifty years, times certainly have changed.  Consider the following items which have thrown this philosophy on its ear. Life expectancy has increased dramatically.  The chart below Read on! →

Cheryl Sherrard quoted in Financial Planning Magazine

Cheryl Sherrard quoted in Financial Planning Magazine (July 1, 2013). Group disability is, by far, the way that most people have coverage. It’s often free or available at very low cost, and there’s no medical underwriting involved. But it only goes so far, advisors caution. The benefit can be taxable if an employer pays the premium or if the employees pay it pretax. That could come as a shock to someone who believes they’ll be getting 60% of their salary only to find out that a big chunk of it is taxed. Also, group coverage is based on salary rather than total compensation. Someone whose earnings are based largely on a bonus may find the benefit woefully lacking, says Cheryl Sherrard, director of financial planning with Clearview Wealth Management in Charlotte, N.C. And group disability often places severe restrictions on which type of disability will be covered. The plans usually pay for 18 to 24 months if a person is not able to perform his or her occupation; after that, they typically only continue to pay if that person can’t Read on! →