Clients & Friends,
As we've witnessed over the past several weeks, there have been major headline stories that have rippled through the evening news and social media. With the recent debacle of Silicon Valley Bank and Signature bank, it's caused the FDIC to take over these banks to protect the depositors of the banks. As we witness the daily volatility in the markets, the recent announcement of another .25% interest rate hike by the fed (marking 9 consecutive months), and inflation still hovering at 6%, we feel it's important currently to consider some changes to our customized investment strategies.
Recently, we adjusted our portfolios based on shifts in the overall economic landscape. These changes include:
- Adding duration exposure to fixed income.
- Continuing to index S&P and Nasdaq with
downside buffer opportunities.
- Diversifying international exposure with focus on
dividend yield and value.
- Focusing on non-correlated investments.
Many clients have also asked about the stability of FDIC Insurance and key questions that you may want to be asking to your bank. Here are some important ones that you may want to act on over the next week.A: To determine if a bank is FDIC-insured, you can ask a bank representative, look for the FDIC sign at your bank, or you can use the FDIC's BankFind tool. BankFind allows you to access detailed information about all FDIC-insured institutions, including branch locations, the bank's official website, the current operating status of your bank, and the regulator to contact for additional information and assistance. You can also submit a request using the FDIC Information and Support Center or call 1-877-275-3342.
Q: How much deposit insurance coverage do I qualify for?
A: The standard deposit insurance amount is $250,000 per depositor, per FDIC-insured bank, per ownership category.
See "Are My Accounts Insured by the FDIC?" for
more information about the types of insurable deposit products that are covered
by FDIC insurance and the amount of deposit insurance coverage that may be
available under FDIC's different ownership categories. Your Insured Deposits includes even
more comprehensive information about deposit insurance coverage and provides
examples of deposit insurance coverage for various ownership categories.
To calculate your specific deposit
insurance coverage, you can use the FDIC's Electronic Deposit Insurance
Estimator (EDIE).
Q: How do I maximize my FDIC insurance at the bank?
A: The answer isn't always "move all my money to another bank."
Remember, that FDIC insurance is
$250,000 per depositor. This means an individual account for one spouse,
an individual account for the other spouse, and a joint account would get you
to $1,000,000 of FDIC Insurance coverage. If you had two children and
added them as beneficiaries to that joint account, your FDIC protection would
move to $1,500,000. The moral of the story here is ask your bank or
banker about the optimal way to maximize FDIC insurance at your current bank.
Additionally, our team
is keeping a close eye on the banking sector as a whole and do not currently
have large scale concerns at this time given the commentary made by Janet
Yellen. There are important differences between the recent failures and those
in 2008. In addition, the failures have been met with even swifter action from
regulators.. Signature Bank and Silicon Valley Bank and both banks had very
large portions of their deposits uninsured, which made depositors more likely
to withdraw their funds at the first sign of the banks wobbling. Both banks had
exposure to cryptocurrencies and related businesses. The regulators guaranteed
all deposits of the affected banks and provided lending to banks, valuing their
bonds at par, which likely would have stemmed the bank runs.
We are continuing to closely monitor the situation.
Just remember, when your bank balance says you have $100,000, there is NEVER $100,000 at the bank. Most banks keep somewhere between 5% to 10% of your deposits on hand at the bank at any given time. You may want to ask your current bank how much it has on deposit now, where they lend their money, and how they invest the deposit money you keep with them. It's always good to be an informed consumer and as always, we stay on top of this as your Private CFO®.
Feel free to reach out to us if you
have any questions at contactus@oxygenfinancial.net
.
