With a new year comes new predictions of how the stock market will perform. Unfortunately, there is not always a strong correlation between predictions and results. As you will see, the prognostications of the experts and the average investor are equally unreliable.
"One-third of young adults would rather deep-clean their bathroom than check their savings account. One quarter say they would prefer to spend an hour with their ex than draft a budget."
The Covid pandemic has definitely altered our lives. We are just not sure in which way and for how long. Early on, for instance, handshakes were thought to be a thing of the past. But handshakes appear to be a custom as resilient as the virus.
Matters arise in life that are best understood when you have the right perspective. This is particularly true when it comes to investing.
We can easily see the effects of inflation at the grocery store and gas pump. But inflation impacts so many other aspects of our lives as well, including homeowners insurance.
Most houses are insured with replacement coverage, which means that the policy pays for how much it would cost you to replace your house and personal property. Homeowner's policies typically have a coverage limit -- the maximum amount the insurance company will pay.
The recent spike in housing costs, such as building materials and labor, may mean that your policy is inadequate because the coverage limit is lower than the replacement cost. You could be stuck with the difference in cost if damage to your house occurs.
While you are reviewing your homeowner's insurance, don't forget the "80% Rule." As Investopedia puts it: "The 80% rule means that an insurer will only cover the cost of damage to a house if the owner has purchased insurance coverage equal to at least 80% of the house's total replacement value."
So give your insurance agent a call and make sure you are sufficiently covered.
Musical Treat
The obvious choice -- Talking Heads and "Burning Down the House."
