Medicare Annual Election Period

Last night Parsec celebrated our Parsec Prize recipients. The event served as a means to get members from each recipient organization together to thank them for their important work in the community. One of these organizations is the Council on Aging of Buncombe County. The Council on Aging is dedicated to promoting independence, dignity and wellness for older adults through education, innovative programming, and coordination of resources. 

At the event the Director of the Council on Aging reminded us that the Medicare Annual Election Period is now open. We thought this information was useful enough to pass on. Below is helpful information the Council on Aging provided us about the election period. Please remember that situations vary and you should consult a Medicare expert if you have questions.Untitled

Medicare Annual Election Period

October 15 – December 7

The annual election period for Medicare is October 15th through December 7th.  During this period, Medicare enrollees can make changes to their Medicare coverage.  You may want to contact your Medicare eligible clients and remind them of the annual election period. 

Key points:

Prescription Drug – Part D Coverage.  Many of your clients may be covered by prescription drug plans through Medicare.  These drug plans all have different formularies and premiums.  A formulary means that the plan will only cover certain drugs and if the consumer’s drugs are not on the formulary they will have to pay the full cost of the medication. The important thing to remember is that the formularies and premiums can change from year to year.  It is highly recommended that the Medicare beneficiary review their drug plan coverage every year to make sure that their medications (usually maintenance drugs) continue on their plan’s formulary.  They can do this at webpage under Find Drug and Health Plans or call the Council on Aging for a no cost review of their plan.  If they do not change by December 7th they are locked in for the next year. 

Medicare Advantage Plan – Part C.  Some of your clients may be enrolled in a Medicare Advantage plan.  If they are happy with it, they don’t need to do anything and will be renewed into the same plan.  If they are not happy, they can change Advantage Plans or go back to original Medicare.  If they indicate that they are considering returning to original (traditional) Medicare, caution them that they must also chose a free standing drug plan or they will have not drug coverage for the following year.  This has happened to several consumers with extremely negative financial consequences.

Medicare Supplements (Medigap) Perhaps most of your clients will have Medicare supplement policies that help pay for deductibles and coinsurance.  A supplement policy can be change at any time and is NOT subject to the annual election period.  If a consumer already has a policy and wants to change, they will probably have to submit a health statement (medical underwriting) and if the new carrier does not like what they see, they can deny coverage.  Always caution your clients not to cancel their old policy until they have been accepted IN WRITING by the new carrier.  Sometimes beneficiaries cancel their old policy as soon as they apply to another carrier and if they are turned down they may be left without any supplement as they may not be able to rescind the cancellation.  A trustworthy insurance agent should be able to guide them through that process safely.

Private Insurance Exchanges.  Some retirees have Medicare secondary coverage through former employers.  Many of these employers are moving to private exchanges in which they contract with a large benefits management company to administer the program.  The employer funds a Health Savings Account (HSA) to pay the premiums; however, if the retiree wants to use those funds to purchase a Medicare supplement policy, they must do so through the private exchange and may have a limited choice of companies and policies from which to choose. Failure to do so may result in the retiree not being able to pay for the supplement from the HSA.   Caution clients in this arrangement to follow directions carefully.

Retiree Coverage.  Some clients will have retiree health coverage and will not be able to make many choices.  If this is the case, they need to be sure to respond to information requests from the retirement plan on a timely basis.  If choices are available and they fail to respond, they may be continued with the same coverage or placed in a default plan.

If you have any questions please feel free to call John Wingerter at the Council on Aging.  828-277-8288. Be sure to say you are calling from Parsec Financial.  Navigating the Medicare benefits can be tricky and might result in penalties or loss of coverage if the beneficiary is not careful.

For Medicare assistance, clients may be referred to:

Council on Aging of Buncombe County:   828-277-8288

Charlotte Senior Center:  704-522-6222

The Shepherd’s Center of Charlotte:  704-365-1995

Moore County Senior Enrichment Center:  910-215-0900

Medicare:  1-800-Medicare

Seniors’ Health Insurance Information Program of the NC Department of Insurance:  855-408-1212



Share this:

Market Update Through 3Q 2014

as of Sept 30, 2014
                                                     Total Return
Index 12 months YTD QTD Sept
Russell 3000 17.76% 6.95% 0.01% -2.08%
S&P 500 19.73% 8.34% 1.13% -1.40%
DJ Industrial Average 15.29% 4.60% 1.87% -0.23%
Nasdaq Composite 20.61% 8.56% 2.24% -1.82%
Russell 2000 3.93% -4.41% -7.36% -6.05%
MSCI EAFE Index 4.25% -1.38% -5.88% -3.84%
MSCI Emerging Markets 4.30% 2.43% -3.50% -7.41%
Barclays US Aggregate 3.96% 4.10% 0.17% -0.68%
Barclays Intermediate US Gov/Credit 2.20% 2.22% -0.03% -0.51%
Barclays Municipal 7.93% 7.58% 1.49% 0.10%
Current Prior
Commodity/Currency Level Level
Crude Oil  $91.16  $105.37
Natural Gas  $4.12  $4.46
Gold  $1,211.60  $1,322.00
Euro  $1.26  $1.36

Mark A. Lewis

Director of Operations

Employee Education and the Ostrich

    I read many articles about ERISA plan governance, including articles about fiduciary duty, proposed changes to legislation, and the delivery of advice.  One article, in particular, did an excellent job describing the ineffectiveness of employee education.  Admittedly, I was a little off put by the premise, especially considering how hard I work as making these meetings interesting.  But by the time I finished reading, I had to agree with the author.  The author describes education material that includes an overwhelming amount of charts and graphs with a delivery filled with industry jargon and terms that the average person cannot understand.  What does work, however, are personal stories and relating the topic in plain English.

     Story telling also helps to pique interest, especially when the story is memorable.  One such story I tend to share is how people often act like ostriches.  An ostrich is a very fast bird, among its other notable characteristics.  We too are like ostriches, in that we are often distracted by the speed of life.  Our daily routine is predictable and busy.  We wake, we work, we pick the kids up from their extracurricular activities, we go to bed, and then we do this all over again.  Rarely do we take five or ten minutes out of our day to focus on other important matters.  Rather we will put it off for another day. 

     Retirement plan participants are often very driven by their work schedules and things that need tending to after work.  The education meeting, if structured properly, serves as motivation for the participant to take action with a sense of urgency.  After all, if something is not addressed immediately following the message or shortly thereafter, then the attitude of “take care of it tomorrow” will turn into next week and next week will turn into next month, and so on.

     So what can we do?  Start by having meaningful conversations and consider changing the way participant education is delivered.  It’s okay to open up and share personal stories if it helps deliver the message.  Have fun with the presentation because humor helps take the edge off serious matters.  Most importantly, be available to answer questions.  Participants are more likely to seek advice after the education meeting, especially when they know you’ll hang around to answer any questions.

Neal Nolan CFP(R), AIF(R)
Director of ERISA
Senior Financial Advisor

Share this:

Market Update Through 5/15/2014

as of May 15, 2014
                                                                           Total Return
Index 12 months YTD QTD MTD
Russell 3000 15.33% 1.39% -0.57% -0.69%
S&P 500 15.17% 2.02% 0.21% -0.53%
DJ Industrial Average 10.25% 0.15% 0.30% -0.57%
Nasdaq Composite 18.72% -2.09% -2.90% -0.95%
Russell 2000 12.33% -5.40% -6.45% -2.67%
MSCI EAFE Index 7.81% 1.65% 1.83% 0.94%
MSCI Emerging Markets 4.45% 2.11% 2.58% 2.72%
Barclays US Aggregate 1.43% 3.58% 1.71% 0.85%
Barclays Intermediate US Gov/Credit 0.80% 2.12% 1.11% 0.59%
Barclays Municipal 1.94% 5.71% 2.32% 1.10%
  Current Prior
Commodity/Currency Level Level
Crude Oil $101.50 $99.74
Natural Gas $4.47 $4.82
Gold $1,293.60 $1,295.90
Euro $1.37 $1.39

Mark A. Lewis

Share this:

The Challenges of Initial Public Offerings

This is a blog post of ours from 2012 that we thought was worth re-posting.


There have been many headlines recently regarding initial public offerings (IPOs) of technology companies.  These headlines tend to generate media buzz and excitement from investors eager to make a quick profit or get in on the next big thing.

The first issue investors face is access to IPOs. In an IPO, the company sells shares to one or more investment banks.  These firms then market the shares to their clients at a slightly higher price known as the Public Offering Price or “POP.”  These clients are typically large institutions rather than retail investors looking to buy relatively small amounts.

You can look up the prospectus, or S-1 registration statement, for any IPO at  If you do this, you will notice that the price and number of shares are blank until the last minute. These are filled in right before the registration statement is declared effective by the SEC and the shares start trading.  You do not know the price while you are reviewing the information to make an investment decision.

When trading opens, the shares may sell for above or below the POP.  It all depends on the supply and demand for shares.  Recent technology IPOs have tended to significantly underperform the overall market.

Some recent companies have come public at valuations of over 100 times trailing earnings, while the market as a whole currently trades at about 17 times trailing earnings.  What does this mean from an investment standpoint?  Mathematically, these new companies must continue to grow at a much faster rate than the overall market for a long time in order to justify their current stock prices.  If there is an earnings disappointment, these high-projected growth companies will tend to fall in price more than a company trading at a more reasonable valuation.

You may love the product, but that may not make for a good investment.  Let’s take the airline industry as an example.  I love the idea that you can get on a plane and go almost anywhere in the world.  But the industry has been plagued with bankruptcies, with many examples of common stockholders being completely wiped out and losing their entire investment.

How about the auto industry?  I love the product, and everyone has one.  In the early 1900’s in the US, there were thousands of auto manufacturers.  Now there are three.  What are the chances that you as an investor would have picked one of those three?  And two of them went through bankruptcy in the past three years.

In addition, there are many quality companies currently trading at valuations below that of the overall market that have increased their dividends each year for 25, 35 or over 55 years.  While we invest in technology companies, we prefer to focus on established companies with solid balance sheets that have the potential for long-term growth of earnings, dividends or both.


Bill Hansen, CFA

Managing Partner

February 12, 2012

Share this:

Market Update Through 4/30/2014

as of April 30, 2014
Total Return
Index 12 months YTD QTD April
Russell 3000 20.78% 2.10% 0.12% 0.12%
S&P 500 20.44% 2.56% 0.74% 0.74%
DJ Industrial Average 14.44% 0.72% 0.87% 0.87%
Nasdaq Composite 25.20% -1.15% -1.96% -1.96%
Russell 2000 20.50% -2.80% -3.88% -3.88%
EAFE Index 11.80% 0.70% 0.87% 0.87%
Barclays US Aggregate -0.26% 2.70% 0.84% 0.84%
Barclays Intermediate US Gov/Credit -0.24% 1.52% 0.51% 0.51%
Barclays Municipal 0.50% 4.56% 1.20% 1.20%
  Current Prior
Commodity/Currency Level Level
Crude Oil $99.74 $103.75
Natural Gas $4.82 $4.57
Gold $1,295.90 $1,300.30
Euro $1.38 $1.38

Mark A. Lewis

Director of Operations

Share this:

Living Small

Living large has been the mantra for many over the years. However, I don’t know if you’ve noticed, but there is growing interest in living tiny. And by tiny, I mean 84 square feet of living space tiny. There are books and blogs and magazines dedicated to this burgeoning movement. In fact, Charlotte recently hosted the Tiny House Conference geared to help educate and train people interested in building their own Lilliputian domain. The conference sold out in short order.

So what’s so appealing about living in a home smaller than 500 square feet? In her book “The Big Tiny: A Built-it-Myself Memoir,” Dee Williams details her journey from a Craftsman-style bungalow to a 95-square foot home on wheels. Williams had been diagnosed with congestive heart failure in her 30’s and after suffering a heart attack at 40, she realized cleaning gutters and tending to the mundane chores that go with home ownership were no longer important. So she sold the Craftsman, built her tiny house and parked it in the yard of her good friends where she has lived happier and much longer than the doctors predicted.

Tiny House enthusiasts have multiple and varied reasons for going small. Some want to live sustainably, others want to be self-sufficient and off the grid, while others are just looking for a way to simplify their lives and focus on the things that matter to them most. That was Dee Williams’ motivation. She realized that it wasn’t stuff that made her happy, but spending time being with friends and doing the stuff she loved that mattered most.

While I don’t think my husband and I and our two cats would be very happy in 95-sqaure feet of living space, I do think we could be quite happy in 1000 square feet. When I look at these tiny houses, I think about how much less there is to clean, and to heat and air-condition. That means more time and money to do the things I like to do, and that equates to more happiness.

But, after living in the same house for more than 20 years, we have accumulated a lot of stuff. Some of that stuff has not seen the light of day in years. In order to move into a 1000 square foot home, I am going to get rid of about 1000 square feet of stuff. And I, like a lot of people, have a hard time doing just that. Never mind that I haven’t used those brown-and-white transfer ware platters in years, or that my Princess Dianna style wedding gown will never fit my much more petite daughter. And what about the drawer of fabric my mother-in-law gave me when she downsized? I don’t even own a sewing machine!

And yet, I know it is time for me to start on this goal. The kids are on the opposite side of the country (and they’re not moving back in!). I love my garden, but I am really beginning to hate maintaining a 50+ year-old house. And someday, making it up those stairs will not be as easy.

I think those platters are heading to the consignment shop this weekend.

Tracy Allen, CFP®
Financial Advisor

Share this:

Market Update Through 4/15/2014

as of April 15, 2014
Total Return
Index 12 months YTD QTD MTD
Russell 3000 22.03% -0.02% -1.96% -1.96%
S&P 500 21.25% 0.29% -1.49% -1.49%
DJ Industrial Average 14.10% -1.27% -1.12% -1.12%
Nasdaq Composite 27.05% -3.10% -3.89% -3.89%
Russell 2000 25.03% -3.46% -4.53% -4.53%
EAFE Index 11.56% -2.21% -2.04% -2.04%
Barclays US Aggregate -0.22% 2.58% 0.73% 0.73%
Barclays Intermediate US Gov/Credit -0.08% 1.51% 0.50% 0.50%
Barclays Municipal 0.65% 4.32% 0.97% 0.97%
Current Prior
Commodity/Currency Level Level
Crude Oil $103.75 $101.58
Natural Gas $4.57 $4.37
Gold $1,300.30 $1,283.80
Euro $1.38 $1.37

Mark A. Lewis

Director of Operations

Share this:

Financial Decisions in an Information-Overload World

info overwhelm

Let’s face it. We live in an age and a culture where information, expert advice, and countless opinions bombard us daily. Within minutes of picking up an iPad or Android we can easily become confused, scattered, and totally overwhelmed on a subject we were feeling pretty confident about just yesterday. This seems to be particularly true when making a financial decision. It starts with the well-intended notion that we ought to first do our research, we should certainly read articles from all the smartest experts, and maybe it’s a good idea to consult with Uncle Jim and Cousin Marge too. And then we’ll have the answer. Only somewhere along our data-finding, information-overload excursion, we lose ourselves and the initial shreds of any real clarity we had to begin with. Now what?

I think there’s a better way and it involves both doing your homework and making decisions from a clear, calm, anxiety-free place. A short case study might help shed some light on the matter. I recently sold my home in Atlanta, relocated to Asheville, and am currently in the market for a new home. But wait, the Wall Street Journal says home prices have jumped significantly in the past year. Should I wait until that cools off? Bond experts say the time to buy is now because mortgage rates are only going higher. Oh no. My dad thinks I should keep renting. What?! You get the idea.

So what’s the solution? How do we use the right information in the right doses all without losing sight of ourselves? After many years of sometimes easy but oftentimes painful lessons, I’ve discovered a few principles that seem to work without fail. Here they are:

Principle #1, stay focused on your “business”. By your “business” I mean things that you can control. Things like doing thorough research (of homes, financial advisors, stocks, etc…), creating and sticking to a budget, improving your knowledge base, etc… It also means staying out of areas that are not your business, i.e. outcomes. In my experience, outcomes are pretty much nobodies’ business and trying to wrestle out a certain result typically leads to stress and anxiety. More on that in Principle #3. Thus, I find it’s best to focus on activities within your control. An important point is to undertake your “business” with gentleness and kindness. If you’re feeling run down or more confused, it’s time to take a break. On the whole, when you stick to your business and enjoy the process, there’s less stress and more clarity – a great place from which to make any decision.

Which leads me to Principle #2: avoid making decisions from a place of anxiety, fear, or urgency. This can be difficult because sometimes we face important and potentially life-changing decisions that seem to go hand-in-hand with stress and anxiety. Although we may believe big decisions are inherently stressful, I’ve found that it’s usually the expectations we put on ourselves to produce a perfect outcome that kicks up all the anxiety. We hold onto the misguided belief that we have to make the best or perfect decision. That we’re not allowed to change our minds if something doesn’t work out, or that we can’t adjust our course as we go. That fact is no one can know how things will turnout, even with the best research and intentions. In that case, big decisions don’t have to be so scary. When we take this perspective it’s much easier to make a decision from a clear, calm place. A place that paradoxically is much more likely to lead to a good outcome.

Finally, principle #3, let go of the outcome. This is hard. Probably the hardest part of the whole darn decision-making process. We want what we want. We are certain that we know that this or that particular result would seriously be the best possible outcome. As much as we genuinely believe our vision of the way things ought to go is the best possible way things could go, attaching to a specific outcome only kicks-up anxiety, fear, and usually a whole lot of stress. I’ve found that in the few instances when I’ve actually let go of the outcome (typically against my will), things turned out better than I could have imagined.

So there you have it, three easy principles to help you make better financial decisions. Use them (or not) as they make sense for your circumstances. But above all, experiment, have fun, and enjoy the process.

Share this:

Consumers Ride to the Rescue Again

Despite recurring unpleasant experiences with ice, sleet, snow, exceptionally low temperatures, wind and rain so far in 2014, consumers have kept on spending. On March 13, the Census Bureau gave us our first look at retail and food services sales for February.

The chart shows this story. After a 0.6 percent decline in January from December, total retail and food services sales posted a 0.3 percent increase in February from January. The total of $427.2 billion is the best February ever and 1.5 percent above February 2013.


It is the fourth-best month ever, behind only October, November and December (in descending order) of 2013. In what is undoubtedly at least partially due to the unusually bad weather endured by so many parts of the nation, by far the best increase (6.3 percent) above February 2013 was racked up by nonstore retailers. So long as people had electricity they could order over the Internet or by telephone.

The second biggest increase was posted by “Health and personal care stores,” where sales rose by 5.5 percent above a year before. “Building materials and garden equipment supplies dealers” were next with a 3.2 percent year-over-year rise.

Gasoline stations had sales 4.6 percent lower than a year earlier. That was the result of slightly lower crude oil prices and less demand.

No matter the weather, people kept eating. Sales at “Food and beverage stores” were up 2.8 percent from a year earlier with the grocery stores part up 2.4 percent. “Food services and drinking places” (aka bars and restaurants) saw sales rise by 2.6 percent.

Consumers remain reasonably optimistic about the economic future for good reasons. The demand for labor is rising, which means that jobs are easier to find while wages and salaries are also growing.

With rising incomes, consumers have more money to spend on goods and services. This causes increases in retail sales and new orders from retailers to restock shelves keep industrial production growing. That in turn leads to more employment and more income. Economists call this lovely situation a virtuous cycle.

While the period since the end of the recession in June 2009 is still the weakest expansion in over 100 years in the US, we are finally entering a virtuous cycle. This year should be the first year with real GDP growth above 3.0 percent since 2005. That would be very good news indeed. The weather will improve and most of the output lost in the first quarter will be made up in April, May and June.

There will be some impact on the monthly profile of retail sales in 2014 because Easter is several weeks later this year than last. This year it will be on April 20 and last year it fell on March 31. Thus, we may have to wait for May to get a clear picture of exactly how robust retail sales are.

The Census Bureau will release revised data on retail and food services sales for the period from January 2012-March 2014 on April 30. Those data may change our understanding of consumer spending patterns somewhat. They will undoubtedly reaffirm the vital contribution of consumer spending to US economic growth.

Dr. James F. Smith
Chief Economist


Share this: