Day: October 27, 2024

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With a question about umbrella coverage, your net worth doesn’t much apply. The question is more about what you need in order to protect yourself, your assets and your family. That has more to do with your exposure and risk of loss than with how much you have to lose. As to whether someone would need umbrella insurance in this scenario, the answer is truly a “maybe.” It depends on your current insurance coverage, the costs of extra coverage and the specific risks you’re concerned about.

Do you have questions about financial planning? Speak with a financial advisor today.

Umbrella insurance is a secondary policy that kicks in after your primary insurance policy is exhausted. It covers any losses or payouts beyond the coverage of your primary insurance.

For example, say that you have an auto insurance policy that covers up to $150,000 in liability and damages. You are considered at-fault in an auto accident with a driver who suffers $95,000 worth of damage to their car and $155,000 worth of personal injuries and lost wages.

Your insurance policy could pay for the first $150,000 of this claim. Then, an umbrella insurance policy could pay that remaining $100,000 for which you would otherwise be personally liable.

The main reason to buy umbrella insurance is third-party liability. By and large, you can know in advance the value of your own property and assets, whether personal or real estate. Since this is knowable, you can buy insurance to cover most cases of personal loss.

Liability is another matter. It’s impossible to predict with any certainty the value of a third party’s assets or injuries. You might be in a car accident someday, or accidentally injure a guest at a party. Since accidents are impossible to predict, so are the costs and harms associated with them. This is where umbrella insurance comes in, as it covers you in case of unpredictable liability that exceeds your policy’s coverage.

Most consumers who get umbrella insurance will use it to supplement either auto or homeowner’s policies. Typically you must have an existing primary insurance policy, as this will not act as your main insurance. For homeowners, this can supplement coverage that you get based on your personal needs and mortgage requirements. For drivers, this can supplement coverage that you have based on your personal needs and your state minimum coverage laws. A financial advisor can help you review and coordinate your current coverage.

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Like all insurance, the specific costs of umbrella insurance vary based on your policy and coverage needs. However, in most cases, individual umbrella policies offer liability-focused coverage. This means that your policy will typically cover third-party injury, harms and property losses. For homeowners, this coverage will typically extend to general liability protection, for example if someone sues for defamation.

This is why the need for umbrella insurance is typically unrelated to your personal wealth. The reason for umbrella insurance is risk of accident and loss, not necessarily collectible assets. Someone with $25,000 in cash is as much at risk of losing everything as someone with $1 million. Indeed, arguably the more money you have the less you might need umbrella coverage, since you can more likely afford excess claims, though umbrella coverage can be pricey.

These policies typically do not protect your own assets and personal property, as you are assumed to price out your own assets within your primary insurance policy. They also typically don’t cover intentional or criminal acts, and frequently do not cover cases of contributory recklessness.

Since these are high-coverage policies, you typically will buy umbrella insurance in increments of $1 million. While professionals like doctors and lawyers will typically have liability protection through their workplace, someone with a higher public profile or who frequently invites people onto their property is at more risk of lawsuits, and so might want to consider more protection. You can use this free tool to match with a financial advisor who can help you evaluate the appropriate coverage for your circumstances.

Umbrella insurance is a policy that offers you additional coverage beyond your basic homeowner’s or auto insurance. Most policies are built around liability, protecting you from third party claims that exceed your policy’s caps.

• A financial advisor can help you build a comprehensive financial plan surrounding your life. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

• If you own your own home, the right homeowner’s policy can make a huge difference. It can save you money and offer enormous peace of mind, so shop wisely.

• Keep an emergency fund on hand in case you run into unexpected expenses. An emergency fund should be liquid — in an account that isn’t at risk of significant fluctuation like the stock market. The tradeoff is that the value of liquid cash can be eroded by inflation. But a high-interest account allows you to earn compound interest. Compare savings accounts from these banks.

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Photo credit: ©iStock.com/enigma_images, ©iStock.com/champpixs

The post My Net Worth Is Over $1 Million. Do I Need Umbrella Insurance? appeared first on SmartReads by SmartAsset.

If you are looking at oil and natural gas stocks, there is one thing you should go in expecting — and that’s volatility. Oil prices are known to swing dramatically and, often, quickly. Any investor putting money to work, whether it be $100, $1,000, or $100,000, has to be prepared for periods of weakness because they will, eventually, arrive. Which is why buying an industry leader like Chevron (NYSE: CVX) is probably the best choice for most investors. Here’s what you need to know.

There are companies that drill for oil and natural gas, which make up the upstream segment of the oil industry. There are companies that transport oil and natural gas, and the products into which they get turned, via energy infrastructure assets like pipelines that comprise the midstream segment of the energy sector. And there are companies that refine and process oil and natural gas and turn them into things like gasoline and chemicals in the downstream segment of the industry.

Then there are companies that do all of that, with assets spread across the entire energy landscape. These are the integrated energy companies, a group that includes Chevron. The reason to do this is that each of the different segments of the energy industry performs differently at different times. The best example is that low oil prices will hurt the upstream business but often benefit the downstream business, which uses oil as an input. For most investors, owning an integrated energy company will be the best option in the energy sector.

Chevron competes with companies like ExxonMobil, BP, Shell, and TotalEnergies. However, if you are looking for an integrated oil company, Chevron stands out in some important ways.

Shell and BP both cut their dividends during the peak of the coronavirus pandemic. Although they have high yields, those dividend cuts will likely bother income investors looking for reliable dividend stocks. TotalEnergies didn’t cut its dividend, but it has been increasingly investing in electricity and renewable power assets. While it is changing with the world around it, as cleaner energy options grow in importance, it really isn’t a pure-play energy company anymore. That leaves Exxon and Chevron, both of which have stuck closer to their oil roots. And both of which have a long history of increasing their dividend year in and year out.

To be fair, Exxon’s 42-year streak of annual dividend increases is better than Chevron’s 37-year streak. But both streaks are impressive when you consider the huge swings in the price of oil and natural gas that have occurred over the past three decades. So, really, Chevron stands toe to toe with Exxon on this front. But it beats Exxon in two other important areas.

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For starters, Chevron’s dividend yield is 4.3%. Exxon’s yield is 3.2%. And the average energy stock’s yield is 3.4%. If you are looking for a high-yield oil stock, Exxon seems to fall a little short while Chevron stands out as attractive.

And then there’s the balance sheet, which is, essentially, the financial foundation from which dividends are paid. Chevron’s debt-to-equity ratio is lower, and thus better, than any of its closest peers. Exxon’s ratio is close, but when you add in Chevron’s higher yield, the clear winner is still Chevron. Note that the ability to take on additional leverage during industry downturns is what has allowed both Chevron and Exxon to support their dividends and businesses through the inevitable energy weak patches.

When you add it all up, dividend investors looking for a reliable high-yield oil stock should probably pick Chevron. There are reasons why you might want to own some other energy company, but if you are simply trying to find the best all-around pick, Chevron stands out from the pack. That’s as true if you have $1,000 as it is if you have $100,000 to invest today.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $20,991!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,618!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $406,922!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of October 21, 2024

Reuben Gregg Brewer has positions in TotalEnergies. The Motley Fool has positions in and recommends BP and Chevron. The Motley Fool has a disclosure policy.

The Best High-Yield Oil Stock to Invest $1,000 in Right Now was originally published by The Motley Fool

Suburban moms, crypto bros, and Swifties aren’t the only voters making their presence felt this election season. Bond investors are voting with their dollars in financial markets, and they don’t like what they see.

The term “bond vigilantes” was famous coined by Wall Street veteran Ed Yardeni in the 1980s, referring to traders who protested massive deficits by selling off bonds to push yields higher.

In a note published Wednesday, Yardeni, who is president of Yardeni Research, and Eric Wallerstein, the firm’s chief markets strategist, wrote that the vigilantes are voting early and pointed to the 10-year Treasury yield soaring by 63 basis points to 4.25% since the Federal Reserve announced a half-point rate cut at its meeting last month.

“In exit polls, the Bond Vigilantes are saying they are voting against Fed Chair Jerome Powell’s dovish monetary policy because the economy is running hot, and the Fed’s premature 50bps rate cut on September 18 raises the risk that it will overheat,” they said.

Treasury yields tumbled ahead of the first rate cut as investors looked for an aggressive easing cycle to match the aggressive tightening cycle. Since the Fed meeting, however, they’ve staged a big reversal.

Sentiment has turned so much that some Wall Street forecasters have warned that the central bank may even pause on further cuts. That’s as Fed officials and economic data have dampened optimism for lots of easing.

In their note, Yardeni and Wallerstein also attributed recent market moves to the outlook for federal deficits, which have ballooned recently and hit $950 billion in the fiscal year that ended Sept. 30, up 35% from the prior year due mostly to higher rates.

“The Bond Vigilantes may also be voting against Washington, figuring that no matter which party wins the White House and the Congress, fiscal policies will bloat the already bloated federal government budget deficit and heat up inflation,” they explained. “The next administration will face net interest outlays of over $1 trillion on the ballooning federal debt.”

Budget watchdogs have warned on the exploding federal deficit. While it will expand under either Donald Trump or Kamala Harris, the Penn Wharton Budget Model and the Committee for a Responsible Federal Budget have said Trump’s policies would produce a much deeper hole.

That’s as the former president has teased a range of tax cuts and even eliminating income taxes altogether. Meanwhile, his vow to hike tariffs across the board is also widely seen as inflationary because companies typically pass along the added costs to consumers in the form of higher prices.

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Ken Griffin is a billionaire hedge fund manager and serves as CEO to Citadel Advisors. According to Citadel’s most recent 13F filing, the firm bought 18,736,591 shares of Kenvue (NYSE: KVUE) stock during the second quarter — increasing its position by 5,848%.

Below, I’m going to break down why now could be a lucrative time to scoop up shares of Kenvue. More importantly, I’ll assess the company’s full picture and make the case for why this consumer health business could be a great long-term buy for the right investor.

Although you may not be familiar with Kenvue by name, I suspect you’re well aware of the company’s leading health brands. Kenvue is the business behind brands such as Aveeno, Listerine, Zyrtec, Tylenol, Motrin, Benadryl, Neosporin, Neutrogena, Nicorette, Band-Aid, and so much more.

As flu season nears, Kenvue may witness some seasonal high demand levels for its over-the-counter allergy and cold treatments.

Kenvue is a spin-off from Johnson & Johnson and has only been trading as a stand-alone entity for a little more than a year. Despite its limited trading activity, I think the table below outlining Citadel’s position in Kenvue over the last year could help shed light on a couple of important themes.

Data source: Hedge Follow.

According to public filings, Citadel bought 6.6 million shares of Kenvue around the time of its initial public offering. But until the second quarter of this year, Griffin and his team had been net sellers of Kenvue stock.

What could possibly inspire such a massive purchase after several consecutive periods of selling?

For starters, Kenvue stock is down roughly 15% since going public and currently trades at a forward price-to-earnings (P/E) multiple below that of the S&P 500. It’s possible that Citadel views Kenvue as a mispriced opportunity and thinks the market is overlooking a potential run-up in the stock following flu season. With that in mind, I would not be surprised if Citadel sees Kenvue as more of a trade and not a position with long-term conviction.

But to be fair, Citadel also bought shares in several other consumer staples or healthcare-adjacent opportunities during the second quarter. For example, the fund increased positions in Pfizer, UnitedHealth Group, Clorox, and Humana.

It’s entirely possible that Citadel bought Kenvue as a hedge against other opportunities in its diverse portfolio.

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In the immortal words of the late, great entertainer Prince, forever “is a mighty long time.” For investors, though 15 to 20 years can practically feel like forever. It can be hard to find stocks you’ll feel comfortable holding onto for that long.

However, three Motley Fool contributors think they’ve identified excellent dividend growth stocks you can buy and hold forever (or at least, the investing version of forever): Abbott Laboratories (NYSE: ABT), AbbVie (NYSE: ABBV), and Johnson & Johnson (NYSE: JNJ).

David Jagielski (Abbott Laboratories): When you’re looking for good dividend growth stocks to hold for years or even decades, start by looking for businesses with diverse revenue streams and excellent track records of increasing their payouts. Healthcare giant Abbott Laboratories checks off both of those boxes for investors.

At the current share price, its dividend yields just 1.8%, which may look unimpressive at first. However, the company has increased its payouts for 52 consecutive years, making it a Dividend King. Moreover, Abbott has been paying dividends steadily for a century, with its first payment taking place back in 1924. Along the way, the company has delivered dividends to its shareholders despite wars, inflation, economic downturns, and a lot of other turbulence.

Over the past decade, Abbott has increased its quarterly payout by 150%, from $0.22 in 2014 to $0.55 today. The only reason the healthcare stock’s yield isn’t higher now is because its valuation rose by more than 180% over that same period. When including dividend reinvestment, the total return investors would have achieved from owning shares of Abbott for the past 10 years is around 250%.

Abbott has a slow-and-steady growing healthcare business, and has many opportunities it can pursue. Its growth rate isn’t massive, but it is sustainable. And with multiple segments, including pharmaceuticals, diagnostics, medical devices, and nutrition, its operations look solid. Excluding the impact of its COVID-19 testing business, the company is projecting organic sales growth of around 10% this year.

For long-term dividend investors, this could be an ideal stock to buy and forget about.

Keith Speights (AbbVie): If you like Abbott, you might love AbbVie. The big drugmaker spun off from Abbott in 2013. Since then, it has increased its dividend by a whopping 288%. Thanks to the time it was part of Abbott, AbbVie also qualifies as a Dividend King. At the current share price, its forward dividend yield is 3.3%.

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The stock market party is over, Goldman Sachs says

The era of double-digit growth in the stock market may be coming to an end.

Goldman Sachs (GS) strategists led by David Kostin estimate that the S&P 500 index will deliver an annualized return of 3% over the next decade — well below the 13% returns in the last 10 years and the long-term average of 11%.

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The Dow drops 250 points as McDonald’s stock slumps with Tesla earnings up next

The Dow Jones Industrial Average and other major indexes opened lower on Wednesday as the yield on the benchmark 10-year U.S. Treasury note continued its upward climb, reaching 4.23%—a level not seen since July. However, there was some relief for investors as oil prices eased, with West Texas Intermediate (WTI) futures trading around $70.65 per barrel.

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Crypto is getting hammered today and Bitcoin has dropped to $65,000

The cryptocurrency market is experiencing a downturn, closely mirroring the decline in the stock market. On Wednesday, Bitcoin saw a significant drop of over 2.5% in the past 24 hours, with its price hovering around $65,000. This decline has dashed hopes of breaking the $70,000 threshold, which had gained traction just a week prior. The downward trajectory underscores the growing volatility in the crypto market and highlights the interconnectedness between cryptocurrencies and traditional financial markets.

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The Dow drops 200 points but the Nasdaq pops after Tesla’s blockbuster earnings

It was a mixed day for investors, as the Dow dropped over 200 points and the Nasdaq jumped after Tesla’s better-than-expected earnings report. In the afternoon, the Dow dropped 203 points, or 0.4%, to 42,311. Meanwhile, the Nasdaq and S&P 500 popped up 0.6% and 0.1%, respectively.

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The SEC greenlit Bitcoin ETF options trading. Here come the big fish

The Securities and Exchange Commission (SEC) has granted approval for the NYSE American LLC and CBOE to list options on spot Bitcoin exchange-traded funds (ETFs), marking a significant development in cryptocurrency history. This approval paves the way for institutional investors, or “big fish,” to gain greater access to Bitcoin through more traditional financial products.

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The Dow closes 400 points lower, marking its worst performance in more than a month

The Dow Jones Industrial Average and other major indexes suffered a steep decline on Wednesday as the yield on the benchmark 10-year U.S. Treasury note continued its upward climb, reaching 4.23%—a level not seen since July.

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Dogecoin, ApeCoin, Solana, and more: Cryptocurrencies to watch

The crypto market is currently bullish, with growing anticipation around when bitcoin will surpass the $70,000 mark. And coming tech earnings reports could further boost the overall market sentiment.

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Betting on Bitcoin? Microsoft’s shareholders will decide soon

Microsoft (MSFT) will soon determine whether to invest in Bitcoin, although the board has recommended voting against the proposal, citing that the company already considers a wide range of investable assets, including Bitcoin.

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Expect the stock market ‘fear index’ to spike heading into the election, strategist says

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A contested election could cause volatility in the stock market. Peter Repetto, investment strategist at iCapital, breaks down what investors can expect

GM earnings could be a great sign for Tesla and the Magnificent 7, strategist says

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Peter Repetto, investment strategist at iCapital, breaks down what GM’s big earnings beat means

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