Disability insurance 101- What You Absolutely Need to KnowWritten by Rita roy
Disability insurance is mutual agreement between policy provider and beneficiary in which provider agrees to pay a certain amount of money to beneficiary on certain unexpected event leading to a disability, which incapacitates person in doing his duties of occupation and / or of any other job.Disability insurance is of three broad types depending on clause put forward by insurance provider: a)Own occupation disability insurance b)Income replacement insurance c)Gainful occupation coverage 1) Own occupation disability insurance refers to insurance money claimed by beneficiary on his/her inability to perform regular duties of regular occupation although person may or may not able to do another job. 2)Income replacement insurance means that policy provider is supposed to pay agreed amount in case because of some mishap you are not able to do your duties both in your occupation and any other job. 3)Gainful occupation coverage denotes that beneficiary will get payment if he / she is neither able to perform duties of occupation nor any other work which person is capable of doing because of his/ her education or knowledge.
| | Robert Rodriguez Weathers the Stock Market Written by Dr. Charlie Tian
Robert Rodriguez likes to buy stocks at their lows. When there are not enough stocks hitting new lows, he closes his fund and piles up cash. This is what he has been doing lately. His moves deserve attention for good reasons, his $1.7 billion FPA Capital Fund has averaged an annual total return of more than 17% over last 20 years, net of sales charge, handily beating all benchmarks by wide margins. As Robert Rodriguez finds slim pickings in stock market, his goal has changed to capital preservation. The cash position in his fund has been in steady increase. On March 31, 2005 , it is at 34%. As a reference, between 1984 and 1997, his cash level was rarely above 5% and most of time it was less than 2%. Now he is sitting on this big trunk of cash, awaiting opportunities. "You never know value of liquidity until you need it and don't have it." He said, “This is one of those times when it takes a great deal of patience, discipline, and conviction to maintain such a contrarian position, because of potential business and investment risk that it entails.” Robert Rodriguez’ contrarian position in investment goes beyond adjusting level of cash. He also reduces his fund’s weighting in sectors or industries that he thinks are overpriced. He has done this before. The years of 1979 –1981 was time of second oil crisis, oil and gas prices were soaring. Many "experts" were forecasting oil prices of $100 per barrel within ten years. Energy stocks were being valued as growth stocks and represented nearly 31% of S&P 500's market capitalization. Robert Rodriguez went to contrary; he liquidated all his energy stocks and bought bonds. The oil mania resulted in large-scale capital destruction with virtually every bank in state of Texas going bankrupt by 1987. Robert Rodriguez’s contrarian investment style was tested again during peak of tech bubble. In March 2000, he analyzed operating and stock market performances of Microsoft and Cisco Systems, made growth assumptions for them and U.S. economy. He biased down expected growth and valuation assumptions for each of these companies. The result was that Microsoft's market valuation would increase to 36% of nominal GDP. Cisco's expected market valuation would rise to 48% of nominal GDP. The combination of these two estimates would equal 84% of GDP by 2010. Apparently (now) odds of this happening were not great. In light of these trends, he reduced his Fund's exposure to technology stocks. We all know how that bubble ended.
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