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Dorion-Gray Capital Management® Weekly Commentary September 28, 2015

| September 28, 2015
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The market started Friday higher following the Federal Reserve Chair’s predictions that the Fed would raise interest rates later this year. Oil prices rose for the second straight day, but the number of issues that declined on the NYSE outnumbered those that advanced. For the week, the Dow fell 0.43 percent to close at 16,314.67. The S&P lost 1.35 percent to finish at 1,931.34, and the NASDAQ dropped 2.92 percent to end the week at 4,686.50. 

Rising Prices – 

Over the five years from 1977 to 1981, inflation (as measured by the Consumer Price Index) advanced by 61.5 percent, an increase of 10.1 percent per year. Since then, only one calendar year (1990) has produced annual inflation of at least 5 percent. Over the 12 months ending Aug. 31, 2015, inflation advanced 0.2 percent (source: Department of Labor, BTN Research). 

Tax Data – 

The 5.56 million tax returns from 2013 that reported at least $200,000 of adjusted gross income (AGI) represent 3.8 percent of all returns filed, received 31.4 percent of all AGI nationwide and paid 55.2 percent of all the federal income tax that was paid in 2013 (source: Internal Revenue Service, BTN Research). 

Still Made Money -

The S&P 500 index peaked on Oct. 9, 2007, before beginning a 17-month bear market that saw the raw index fall 57 percent before bottoming on March 9, 2009. An investment in the S&P 500 on Oct. 9, 2007, (i.e., at the market’s top) was up 48.8 percent (total return) as of the close of trading on Friday, Sept. 18, 2015 (i.e., nearly eight years later), an annualized return of 5.1 percent per year (source: BTN Research). 

WEEKLY FOCUS – Medicare Open Enrollment Approaching 

When it comes to Medicare and supplemental policies, timing is important. For example, in most cases, people receiving Medicare benefits are only allowed to join a new Medicare Advantage (Part C) or stand-alone prescription drug plan (Part D) during the fall open enrollment, from Oct. 15–Dec. 7. 

Shortly before open enrollment begins, individuals with these plans should receive an Annual Notice of Change and/or an Evidence of Coverage from their provider. It’s important policy holders review the document(s) provided for changes that could affect them and often worth their while to look at other possibilities. 

Currently, the average Medicare recipient can choose from 30 stand-alone prescription drug plans with a wide range of costs and benefits. The Medicare Plan Finder at allows individuals to find policies available to them and compare their premiums, deductibles, out-of-pocket expenses, preferred pharmacies and the medications they cover. One thing beneficiaries should watch out for is “step therapy” restrictions that could require them to substitute another drug for a preferred medication on a trial basis. Once a new plan is chosen, the easiest way to enroll is by calling 800-MEDICARE. It’s wise to record the date of the conversation, the things discussed and the name of the person who handled the call. 

Anyone dissatisfied with their Medicare Advantage plan can dis-enroll and join original Medicare during the fall open enrollment or during the Medicare Advantage Disenrollment period from Jan.1–Feb.14. 

Those not currently enrolled in Medicare should sign up for Parts A and B three months before reaching their 65th birthday and also for the supplemental Parts C, D and/or Medigap during their initial enrollment period. Anyone who doesn’t enroll for Part B at that time could pay more the rest of their life. An individual who fails to apply for supplemental coverage during that window could be rejected or, if accepted, pay higher premiums as long as they have the plan. Exceptions, such as having coverage through an employer, can apply. 

If you have questions or need additional help in determining how health care costs may impact your retirement, please call our office. We’re here to help! 

The Dorion-Gray Team 

Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. a Registered Investment Advisory Firm. Dorion-Gray Retirement Planning is a trade name of Dorion-Gray Financial Services, Inc. located at 2602 IL Route 176, Crystal Lake, IL 60014. Dorion-Gray and the Securities America companies are separate, unaffiliated entities. 

Diversification seeks to reduce the volatility of a portfolio by investing in a variety of asset classes. Neither asset allocation nor diversification guarantee against market loss or greater or more consistent returns. 

© 2013. Dorion-Gray Financial Services, Inc.

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