What is this Brexit that we have heard a lot about during the last couple of weeks?  Britain voted on June 23 to EXIT the European Union.  The immediate result was that stock markets immediately sold off and the US market lost 5.6% in 2 days.  To put this in perspective, the US stock market is up 15.8% since the low of February 11 earlier this year.  I believe the “panic” was overblown for the following reasons:

  • Britain runs a trade deficit with the European Union (the UK imports more from the EU than it exports to the EU). Large EU companies like Mercedes and Siemens are not going to stop selling to the UK!
  • US exports to the UK are about 1.4% of our Gross Domestic Product (about half of what we export to China)
  • US banks are super-capitalized[1] (compared to 2008)
  • The US Treasury is also very liquid – they are sitting on $2.5 trillion ($2,500,000,000,000) of excess reserves.
  • Switzerland and Denmark are not members of the EU, but they are what are called “social members” of the EU, which basically enables these countries to have limited border crossing restrictions, essentially free trade and no tariffs. Once the shock of Brexit wears off, the UK will probably get “social membership” in the EU.


Remember, there is uncertainty in the markets all the time, and Brexit is definitely not going to affect our markets in the long term.  As always, stick to your investment allocation plan and periodically rebalance your portfolio.  If you have any specific questions, please let me know.


Dental Costs

I recently completed almost 2 years of major dental work which included an extraction, root canal, 2 implants and finally crowns for the implants.  After multiple visits to the dentist and oral surgeon, the total out of pocket cost was just under $8,000.  As I have dental insurance, the total cost would have been in excess of $10,000, not taking into account the discounts the insurance company negotiated with the dental providers.


The reason I am telling you about this, is not to drum up sympathy and fund a GoFundMe account, but to highlight the ongoing dental, vision and hearing costs we will be paying when we are in retirement.  Remember, Medicare does not cover any of the above mentioned costs.  Make sure you make a provision in your retirement plan for medical expenses that are almost certain to hit us in our golden years!


The good news is that dental care has made some tremendous advances on the last decade or so, so the discomfort and pain of the procedures are nothing like they were “in the olden days”.


Block Unwanted Robocalls

For the last few months we have been using a free service called Nomorobo that automatically stops unwanted robocalls from telemarketers.  After one ring the automated call is blocked and does not even come up on your caller ID.  It does let through legitimate automated calls from your doctor, school closings or pharmacy.  If a legitimate call is blocked, you can go online to the Nomorobo site to report a valid number that was incorrectly blocked.  Similarly, you can report a robocall that occasionally gets through.  It works on CenturyLink lines as well as VOIP phones through Comcast.  The service is free for only a landline or $4.99/month for landline and 3 additional iPhone or Android cell phones.


Personal Notes

The planned 10K run never materialized (anyway, not yet!).  We did get away to Colorado Springs for a long weekend in April to see my son Michael.  ‘Springs is a fun city with great restaurants and many hiking trails.  May was time for my +40’s tennis sectionals in Tucson, just in time to welcome their first plus 100 degree day.  Had fun and were eventually beaten by the Phoenix team.  Timing was perfect to head to Phoenix for the annual NAPFA conference, after the tennis.  Stayed over in Casa Grande for a couple of days.  Phoenix was surprisingly mild (not that I knew, as I was ensconced in conference sessions most of the time!)  Just got back from Roberta’s family reunion in beautiful northern Georgia.  Fun to meet with family and get some serious hiking in, interspersed with German food in Helen, GA.


Contact me for a review meeting if needed.  Please plan early for setting up an appointment.  Feel free to pass this newsletter on to whoever may be interested.  They can also sign up directly, on the website.


[1] Bank capital is the difference between a bank’s assets and liabilities, and it represents the net worth of the bank or its value to investors. A bank’s capital can be thought of as the margin to which creditors are covered if the bank liquidates its assets.