Keeping Track: auto insurance
For low premiums, head west young man.
Members of the National Association of Insurance Commissioners released their annual report on personal automotive insurance last week. The study shows that in 2000, the nationwide average expenditure per insured vehicle was $687 a less than 1 percent increase from the previous year.
Areas with the highest population density and therefore the busiest roads tended to have the highest rates.
The Financial Planning Association reports that a number of professional scholars expect the stock market to produce annual returns ranging from 2.9 to 5.2 percent over the next decade or two far below historical averages.
If their predictions are true, investors can take certain steps to handle a long-term low-return stock market, according to an article in the Association's Journal of Financial Planning:
Be more realistic in your expectations. The annual real return of the S&P index from 1950 to 1999 was a very robust 10.3 percent; investors should not simply use those numbers as "the norm."
Save more. An investor who is 40 years old with no savings would have to save 43 percent more each year if the real rate of return is 3.5 percent instead of 5 percent.
Lower stock allocations by 10 to 15 percent and minimize investment expenses as much as possible.
Don't concentrate your portfolio on a stock or market sector in a gamble to make up for losses. Instead, diversify beyond stocks and corporate bonds to include such assets as real estate stocks and inflation-adjusted Treasury bonds. (See story)
Despite the market selloff and fears of a double-dip recession, companies are poised to finally step up hiring again.
A survey conducted by Management Recruiters International shows that managers, executives, professionals, salespeople and technical workers are in demand. Of nearly 1,400 executives polled, 42.4 percent indicated plans to hire workers during the second half of 2002, up four percentage points from the first half of the year. And only 8.5 percent of those polled planned to cut jobs, down by 3.8 percentage points.
But who do executives plan to hire? It may be older workers. According to outplacement firm Challenger, Gray & Christmas, the loss of 401(k) wealth stemming from Wall Street's collapse may force many older Americans to make a difficult choice: work longer or spend less in retirement.
If they decide to postpone retirement, it will "wreak havoc" on the economy, warns company CEO, John Challenger. More older employees at work, he says, will lead companies to hire fewer young recruits. It will also become more difficult for them to move up the corporate ladder.
In addition, Challenger says retirees the fastest growing segment of the population will have fewer opportunities to spend their already-dwindling assets.
Cable rates have shot up far more than inflation despite the federal government's effort to deregulate the telecommunications industry and foster competition.
Consumers Union, which publishes Consumer Reports magazine, claims that rates have risen 45 percent since 1996, when the Telecommunications Act passed, ordering the deregulation of the cable industry.
Industry officials dispute those numbers because deregulation didn't actually begin until 1999. The National Cable & Telecommunications Association says cable rates increased about 17 percent during the three-year period of deregulation.
Competitive pricing leading to lower cable rates was a key goal of the hard-fought legislation. But Consumers Union says that hasn't happened, in part because cable companies have tried to dominate the market and edge out competitors like satellite television.
The union is calling on Congress to shift oversight of cable companies to local regulators, much like the telephone companies, because the cable industry is vulnerable to abuse.
The industry claims that infrastructure, programming, and other new costs have forced up prices.