Question:
What are the pros and cons of buying life insurance through my employer rather than buying my own policy?
Answer:
A group policy may be more expensive, depending on the average age of the group. If you are young and in good health, an individual policy should be more cost effective. Another negative to a group policy is that they are, generally, nontransferable. Therefore, if you were to leave the company, you might be underinsured. Likewise, if something were to happen to you, you may become uninsurable once you leave the company. We suggest that any coverage you get through a group policy at work should be considered extra. For a young family, the coverage is often not enough to support your family should something happen to you. If you are older and have your savings in order, the coverage offered by a group policy may be enough; however, we still prefer individuals to carry their own policy.
Question:
I bought Illinois Tool Works years ago on your recommendation. Do you still like this company? Seems recently I’ve heard you talk more about ETFs for the Industrials and Materials sectors. I also own Danaher.
Answer:
Illinois Tool Works, Inc. (NYSE: ITW) is a multinational manufacturer of a wide range of industrial products. You could almost consider ITW an exchange-traded fund, based on their diversification across the industrial sector. We still like ITW and still hold it in our Recommended Portfolio. All the industrial stocks have done quite well year-to-date.
Danaher Corp. (NYSE: DHR) is a smaller firm that designs, manufactures and markets medical, industrial and commercial products. We currently do not hold shares, but we have held it in our Small- and Mid-Cap portfolio. With 13% expected growth and a price to earnings of 20 versus ITW’s PEG of 1.87, Danaher is currently the better buy. We recommend holding both companies.
Question:
I recently shorted TAL Education Group. I’m looking at Capella Education, DeVry or Strayer. What’s my best buy of these?
Answer:
Overall, we do not suggest shorting stocks. It can be very risky; therefore, it is not a strategy we recommend. Capella Education (NASDAQ: CPLA), DeVry Inc. (NYSE: DV) and Strayer Education Inc. (NASDAQ: STRA) are education services. Capella caters to the doctorial and masters degrees. DeVry focuses on the professional services, while Strayer offers undergraduate and graduate degrees both in the classroom and via the Internet. We do not believe it is a good time to buy education services. Generally, when the economy is going down, education services do well. Those who have lost their jobs or are worried about losing their jobs, return to school to improve their skills. With the economy picking up, the attendance tends to drop. Additionally, these schools have had increase regulations regarding the lending of money for enrollment, which is weighing on them. Of the three, we think DeVry is the best buy with a price-to-earnings-to growth ratio of 1.
Question:
I anticipate a strong holiday season. What consumer cyclical stocks do you like right now?
Answer:
In the past few holiday seasons, sales have been decent. If employment continues to increase, this holiday season should be similar. Right now, specialty brands have been beaten down by the markets and are at attractive prices. You may consider Aeropostale, Inc. (NYSE: ARO), Guess?, Inc. (NYSE: GES) and Tiffany and Co. (NYSE: TIF).
At Henssler Financial we believe you should Live Ready, which includes understanding the stocks you invest in. If you have questions regarding your holdings, the experts at Henssler Financial will be glad to help. You may call us at 770-429-9166 or email at experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
