BLOGThe Bird's Eye View
Timely Perspectives, Unconventional Thinking
We’re excited to share timely market insights, thoughtful perspectives and expert commentary as part of our commitment to providing modern investment solutions to modern challenges.
BLOGThe Bird's Eye View
Timely Perspectives, Unconventional Thinking
We’re excited to share timely market insights, thoughtful perspectives and expert commentary as part of our commitment to providing modern investment solutions to modern challenges.
Medicare is a vital federal health insurance program available to individuals aged 65 and older, as well as certain younger individuals with specific health conditions or disabilities. Taking the time to understand Medicare’s structure and making informed choices can help secure reliable healthcare coverage well into retirement. The basics of Medicare can seem overwhelming, as it is divided into four parts—Part A (hospital insurance), Part B (medical/doctor services), Part C (Medicare Advantage, offered via private insurers), and Part D (prescription drug coverage). Original Medicare consists of Parts A and B, while Medicare Advantage (Part C) often bundles in additional benefits and may include drug coverage as well.
When choosing Medicare coverage, it’s important to compare the unique costs, services, and restrictions of each part. Part A is typically free for those with sufficient work history, while Part B and Part D require monthly premiums and can carry additional costs based on income. Some services, such as routine dental or vision care, are not covered under Original Medicare but may be available through Medicare Advantage plans. The decision between Original Medicare and Medicare Advantage should reflect personal health needs, travel habits, and budget, as each option has its benefits and limitations.
Timely enrollment is essential to avoid penalties and gaps in coverage. To help financial professionals and their clients navigate the intricacies of Medicare, First Eagle Academy partnered with the Medicare Rights Center, to create the Understanding Medicare from A to D program. Please contact your First Eagle representative to learn how we can help.
The outperformance of US small cap stocks in the third quarter served as a good reminder that the small cap premium—though it has fallen out of favor from time to time over the past 100 years or so—has persevered over the long term.
Down more than 20% for the year to date through early April, the Russell 2000 Index has since rallied around 40%, including a 12.4% gain in the third quarter, outpacing the S&P 500 Index in both instances. This dynamic is worth noting given the chronic underperformance of smaller stocks since the financial crisis.1 But does it represent a durable shift in relative performance toward the historical norm in which small cap stock have offered investors the potential for enhanced returns in exchange for higher perceived risk?
The rally’s persistence will likely depend on improved corporate fundamentals. Fortunately, we have begun to see just that. Amid a backdrop of 3.8% GDP growth and manageable inflation, Russell 2000 second quarter earnings growth came in at nearly 72% year over year, and estimates call for another 40%-plus expansion in the third quarter when reports start trickling out in the coming weeks. S&P 500 earnings growth, in contrast, was a relatively pedestrian 13.8% in the second quarter and is expected to slow into single digits in the third.2 Earnings for small cap companies—who are far more reliant on floating-rate debt than their large cap counterparts—could get an additional boost from easing interest rates.
Earnings for small cap companies could get an additional boost from easing interest rates.
Given the size of the small cap market, recoveries can be sharp; it doesn’t take a massive amount of renewed buying interest to significantly move a market whose aggregate capitalization is less than that of several individual US stocks. Of course, there are a host of risks too numerous to mention in this forum that could disrupt this comeback.