Question:
I’ve been researching Seagate Technologies. What do you think of this stock, and what would be a good price to buy it?
Answer:
Seagate Technologies, PLC (NASDAQ: STX) is an Ireland-based technology company with principal products that include hard disk drives designed for enterprise servers, mainframes and work stations. With so many technology companies moving to the cloud for storage, there is not as much demand for Seagate’s products. The stock has returned more than 61% year-to-date. With a long-term growth expectation of about 8% and a price-to-earnings-to-growth of 1.15, we think the stock is slightly expensive right now. We do not recommend buying Seagate at this time. Between the slight overvaluation and the risk of a narrowing market space, we suggest avoiding an investment in Seagate. We do not advocate shorting the stock either. A full transition to the cloud will not happen over night
Question:
Should I buy life insurance on my child? After my son was born, I’ve been inundated with offers as a way to “save for his college” or “start his inheritance.”
Answer:
No. You should almost never buy life insurance on a child. The harsh reality is that if a child dies, it will save the family money. Life insurance is designed to replace an economic loss. If the breadwinner of the family were to die, the family would have lost income. If a homemaker were to die, the family would have to hire a housekeeper and babysitter. There is no economic cost of a child’s death. From a financial planning standpoint, we recommend spending the money on extra life insurance for the breadwinner(s), health insurance and disability insurance.
Another option we recommend is putting the money into a 529 Plan for the child’s education. While a cash value life insurance policy may provide a lump sum amount when the child turns 18, you may be better off investing in a 529 Plan. You may be eligible for state tax deductions for your savings to a 529 Plan, and the growth is also tax free when used for qualified higher education expenses.
At Henssler Financial we believe you should Live Ready, which includes understanding how to use insurance to benefit your family. If you have questions regarding your insurance strategy, 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.
