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The Weekly Wealth Report

December 20, 2021

The Week on Wall Street

Stock prices retreated last week as global central banks joined the Federal Reserve in taking steps to tighten monetary policy.

The Dow Jones Industrial Average fell 1.68%, while the S&P 500 dropped 1.94%. The Nasdaq Composite index tumbled 2.95% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, managed a gain of 0.47%.

FACT OF THE WEEK

On December 25, 1971, Garo Yepremian boots a 37-yard field goal in the second overtime of an AFC playoff game to give the Miami Dolphins a 27-24 win over the Kansas City Chiefs in the longest game in NFL history. Game time elapsed for the Christmas contest: 82 minutes and 40 seconds.

The loss was devastating for the Chiefs, who got a remarkable performance from Ed Podalak, a largely unheralded running back. He finished with 350 all-purpose yards, an NFL record for a playoff game.

Kansas City might have won were it not for a poor performance by Pro Bowl kicker Jan Stenerud. Following a long, fourth-quarter kickoff return by Podolak, the future Hall of Famer missed a 31-yard field goal attempt with 35 seconds left. In the first overtime, his 42-yard field goal attempt was blocked.

Said Chiefs coach Hank Stram: "It's a shame to fight that hard, play that well with them and not win."

Yepremian was confident he would make the winning kick. "I thought when we were driving I could make anything under 50 yards," he said. "On the sideline I was dying to get a chance to kick [the winning field goal]."

With the win, the Dolphins advanced to the AFC Championship Game, which they won against the Baltimore Colts, 21-0. Two weeks later, however, Miami lost in the Super Bowl, 24-3, against the Dallas Cowboys.

Miami bounced back the next season, finishing 17-0—the only perfect record in NFL history. In the Super Bowl, the Dolphins beat Washington, 14-7.

 

MARKET MINUTE

From Uncertain to Unsettled

Stocks weakened ahead of Wednesday’s Federal Open Market Committee (FOMC) meeting as investors weighed how aggressive the Fed might be in reversing its easy-money policies. Investor sentiment was further dented by disappointing economic data. Retail sales fell short of expectations and a year-over-year jump of 9.6% in producer prices reflected price pressures that may translate into higher future consumer prices. It was the highest percentage increase since records started in 2010.

The market initially responded well to the FOMC announcement on Wednesday afternoon, but became unsettled into Thursday and Friday over a tighter monetary policy and Omicron concerns.

A New Fed Narrative

After the FOMC meeting, the Fed announced a plan to quicken the tapering of its monthly bond purchases. It plans to double the rate from $15 billion a month (announced in November) to $30 billion a month, effectively putting an end to asset purchases by March 2022. The Fed also signaled that as many as three rate hikes may be coming in 2022.

The Fed cited elevated inflation and an improved labor market as justification for the pivot from its pandemic-related, easy-money policies. Reflecting the persistence of higher-than-anticipated inflation, the Fed raised its previous inflation estimates for this year and 2022.

FINANCIAL STRATEGY OF THE WEEK

Medicare can be complicated to sort through, there are many options and choices available to suit different needs. To make it simpler, the program has been broken down into four basic parts. As you think about how Medicare will cover your health care needs, one of the major decisions will be whether to enroll in federally run Original Medicare or select a Medicare Advantage plan, the private insurance alternative.

For most individuals, knowing which parts to enroll in can be difficult to determine so here is an overview of each plan:

Part A – Hospital Coverage: This covers inpatient hospital stays, hospice care, and qualified nursing care that individuals may need after suffering a serious health issue or injury that requires rehabilitation or short-term nursing care.

Part B – Doctor and Outpatient Services: Includes routine doctor visits, lab tests, preventive medicine, medical equipment, ambulance transportation, x-rays, and some outpatient prescription drugs.

Part C – Medicare Advantage: Medical Health Plans for purchase through private insurers that contracts with Medicare to provide at least all of the services provided in Part A and B with additional offerings such as dental, vision, hearing, or prescription drug coverage. The coverage and cost vary from plan to plan.

Part D – Prescription Drug Plan: Drug insurance plans purchased through private insurers designed to help cover the cost of prescription medications. What types of medications are covered are determined by a formulary published by the federal government that is subject to change every year. Part D plans cover both generic and name-brand medications, with limitations. Some medications aren’t covered, in that event, an exception can be filed but there is no guarantee it will be granted.

The key to Medicare is to determine the Medicare coverage choices that work for your health care needs and budget. If you have questions on planning for your retirement health care costs, please don’t hesitate to reach out. We’re always here to answer your questions or address your concerns.

Have a great week!