Tuesday, November 29, 2011

Millennials Prepare for The Future

As we continue to see world news and statistics pointing to a global slow down it is hard to see any positive event to find hope in.  The economy in the U.S. has spared no one in regards to hardship but probably the worst off have been the Millennials.  More than 30 percent of younger-age households have a net worth of zero or less, due to credit card debt and student loans. Many young adults have resorted to moving in with several roomates to manage to be on their own away from mom and dad.  With all this change and economic uncertainty young adults still need to live, dream and prepare for the future.

With lower salaries and low savings the amount of action that can be taken is limited for now but times will change eventually, hopefully for the better.  In planning for the future young adults must realize that retirement may not resemble what it looks like now for their grandparents and parents.  Although that alone might scare a few there is a high possibility that social security will not be there for the younger generation upon retirement.  This requires a more strategic approach to ensure adequate funds for our golden years. 

Participating in a company's 401(k) or an institution's 403(b) is a good choice because of the tax benefits and free money contributed by the employer.  Being well informed about where the money is allocated is important as funds may need to be strategically moved around.  This is a good choice for those not interested in being overly active in investment choices and day to day fluctuations.  For those preferring to invest and learn on their own, opening a stock market account through a brokerage may be a better choice.  This will require more footwork and will also require knowledge of the stock market.  Utilizing both the 401(k) and a personal investment account is also a good idea.  Brokerages offer IRA's which allow investors the ability to trade stocks and not pay taxes on those gains until retirement or until that money is withdrawn. 

In preparing for the future it is best to remain conservative for a while since returns enjoyed before the Great Recession may not be seen anytime soon in both the real estate and stock market. 

Seeing the stock market as an income investor through dividend paying stocks can also be a good alternative for young adults especially with interest rates near zero, rates may remain low even beyond 2013.  Global worries are real yet the world must go on and good times will come again.  If stock markets slow down or experience extreme volatility young adults have youth on their side and can ride out long storms.  Not putting all their hopes on one form of investment is a healthy view and not investing cannonball style all their money at once and in one company is also wise.

Here are a few top paying dividend stocks from the Dow Jones: AT&T Inc. (T), Verizon (VZ), Merck & Company, Inc (MRK), Pfizer (PFE) and General Electric (GE).  These stocks have the ability to generate income as well as capital gains for investors in the long run.

Tuesday, November 22, 2011

Medicare 2011

Medicare is a national health insurance program for people 65 years and older, a few younger people who qualify can also receive Medicare benefits.  People with kidney failure or long term disabilities are eligible to receive Medicare.  Medicare has four components: hospital insurance - Part A, medical insurance - Part B, Medicare advantage plans - Part C, prescription drug coverage - Part D. 

To receive Medicare you must be a citizen or permanent resident of the U.S. at least for five years.  People getting Social Security when they turn 65 do not have to apply they will automatically be enrolled for both Part A and Part B, the Medicare card will be mailed three months before their 65th birthday.

If you do not receive Social Security or Railroad Retirement benefits when you turn 65 you have seven months in which to enroll.  People should enroll three months before they turn 65 by contacting the SSA.  If you do not enroll within the seven month period starting three months before turning 65 you will have to wait until the next enrollment period which is January 1 to March 31 of each year, Part B will not start until July. 

Medicare Part A covers inpatient hospital benefits, home health care, hospice care and skilled nursing facility care.  Part A does not require the patient to pay a premium for this coverage.  Part A helps pay for meals, semi-private rooms, regular nursing services, rehabilitation services, drugs, medical supplies and x rays.  The 2011 Part A cost sharing deductible is $1,132 ($1216 in 2014) per benefit period and $283 ($304 in 2014) per day for days 61-90 of an inpatient stay.

Medicare Part B covers medical professional services, artificial prosthesis, injectibles, outpatient hospital services, outpatient mental healthcare, ambulance transportation, flu, pneumonia & hepatitis B vaccines.  Medicare recipients are responsible for paying the annual Part B deductible.  After paying the deductible  Medicare pays for 80% of Medicare approved charges.  The patient is responsible for paying the remaining 20% Medicare coinsurance.  The monthly premium for Part B for 2011 is $115.40 per month it will drop to $99.90 in 2012 (most people in 2014 will pay $104.90), higher income individuals may pay more.  Part B deductible will be $147 per year in 2014.  Many patients with Medicare supplement this coverage with a secondary Medigap insurance.

Medicare Part C includes Medicare Advantage Plans.  The plans must be approved by Medicare and are managed by private companies.

Medicare Part D must also be approved by Medicare as well.  It is the prescription drug coverage offered by private insurance companies to aid with the costs of drugs.  Part D is a voluntary benefit but if it is chosen it includes a monthly premium as well as a share of the cost of the prescriptions. 

It is important to keep a record of your doctor visits and the processing of your bills as well as never giving your Medicare number to people you do not know.  A word to the wise be wary of duplicate payments for the same services and of people that claim they can get Medicare to pay for a service that is not covered.

Saturday, November 12, 2011

Rough Times for Young Adults

Being a young adult in this present U.S. economy is quite the challenge.  With unemployment rate at 9% and quite higher for young adults, last year youth age 24 and younger had an 18.4% unemployment rate. High debt from schooling has not guaranteed a job or higher pay.  Those college undergraduates that decided to go back to school and receive a graduate degree to evade the recession find themselves in just about the same position but now with much more debt.

Education should always be a positive investment, but in this economy it seems that going back to school has to be strategized and can end up being a set back.  College costs have grown faster than inflation and lending practices have certainly changed.  These factors have contributed to a lower amount of people going for advanced degrees.  There were more men that earned doctorate degrees in 1975 than in 2005.  The only reason the amount of PhDs grew during that period was because the number of women receiving doctorates tripled.

According to an annual report from the Council of Graduate Schools in Washington the doctorate degrees given in 2008-09 where 28,469 for men and 28,962 for women.  The class of 2008-09 is believed to be the class to be performing the worst, employers prefer to hire recent graduates than to hire someone who has been out of work for such a long time.

Starting in the summer of 2012 the subsidized loan offered by the government will disappear for graduate students meaning they will start accruing interest on their loans the minute the money disburses.  In the past low income graduate students could enjoy going to school interest free on their subsidized loan until 6 months (grace period) after graduation or their last date of attendance.  Low income undergraduates will still have subsidized loans available to them.  Those considering advancing their learning have to think it twice since degrees that take longer to finish will prove to be more expensive.  The added costs will place a burden on the education of college students in a rather slow economy.

Education is what leads to economic growth if the present environment favors the small percentage that is wealthy, then that gives the 1% of the population more of a lead to dwarf all others.  Occupy Wall Street is a sign of what young adults are going through, men and women that want to work and not feel bad because they took out a loan to pay for their education.  Young men and women who want to start families in this decade and have the ability to buy a home.  With little or no credit and student loans that look like mortgages it is difficult for this new generation not to feel upset.  The American dream should not be impossible and young adults should not have to live with their parents until they are well into their 30's in order to be able to survive.

Our economy and society has to enhance our education and promote higher learning to all.  We have to enable our society to compete at a global level to expand our growth.  In a world where technology and innovation are rapidly accelerating we should encourage learning and invest in creating jobs that will enhance the quality of life of our society.

Tuesday, November 1, 2011

Human Genome Sciences Inc. Overview

Benlysta is the first new lupus drug to be FDA approved in over 50 years and one of the first drugs to derive from the human genome.  The human genome project in the 1990's didn't lead to much until now with Human Genome Sciences, Inc. (HGSI) and their lupus compound Benlysta.

Being first doesn't always equal success or fast growth.  During the summer two biotechs were severely punished one of them was HGSI the other Dendreon (DNDN).  Human Genome Sciences' stock price was steadily in the 20's for most of 2010-2011 until the summertime blues came and brought the stock down to trade at about half its value.  Dendreon with its first FDA-approved autologous cellular immunotherapy for the treatment of prostate cancer Provenge also took a slide during the first days of August from which it has not recovered.

The European debt crisis and the worry of a U.S. double dip recession made investors flee for their lives.  The scare made many rethink their strategies as they returned.  New technology is seen as risky and in a slowing economy and volatile market traders want out on these high risk securities.  Investors are not rushing to return to biotech companies in an environment where traditionally safe stocks have been trading violently.

Human Genome Sciences reported a net loss for the third quarter of 2011 of $88.4 million compared with a net loss of $40.9 million for the third quarter of 2010.  In February 2011 HGSI expected cash and investments at the end of 2011 to total about $650 million but has recently stated that they expect that number to drop to about $470 million.

HGSI is co-marketing Benlysta with GlaxoSmithKline (GSK) but the worries that the drug may not be as profitable in the next few years has brought down the stock's price.  The Glaxo buyout has been rumored since the drug was still in the clinical trial stages yet it has only been a rumor that has given the stock some brief upward movement. The stock is likely to stay highly volatile for the upcoming months. It is hard to justify a high price for a pharmaceutical like Benlysta when the value is based on future events that are set to happen years from now.  Some analysts have predicted that in 2019 HGSI is expected to reach sales worldwide of well over a billion.

The stock's low price makes the buyout not likely to happen any time soon.  The fact that the two companies are working on other projects to treat other diseases makes another buyer aside from GSK not likely.  If GSK does buy in the near term then that would give HGSI a nice rally and a good chance for traders to exit with a profit.

The number of accounts ordering Benlysta have increased, purchases of the lupus intravenous infusion has been steadily penetrating hospitals with very large lupus cohorts.  Benlysta has also received marketing authorization in Europe making it available in several European countries it is also available in Canada.  It also received approval for public fund reimbursement in Spain.

Pharmaceutical companies operating in the negative zone is common with the R&D and expenses to bring drugs to the market.  Yet once the blockbuster emerges sales are to make up for the weak income statements.  With HGSI Benlysta is the home run the only concern is that the sales may not be as strong and it will take longer to reach the break even point.  The longer the wait the more room for unexpected events to come about either good or bad.  HGSI is a day traders' stock with high volatility and fairly low volume.  For the long term trader the price may seem attractive but this may result in a very long and bumpy ride.