If a car loses value after a collision; Can foreign stocks help a retirement portfolio? When a full house is a winning hand; Watch your step when buying Native Americana
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Q: My insurance company is footing the bill for repairing my car after a collision, but I'm concerned that the accident will reduce the car's resale or trade-in value. Can I get the insurer to pay for that?
A: Probably not. Policies issued in most states exclude "any diminution in value after any damage has been repaired."
Even if your policy doesn't, you'll still have to show what the loss might come to. According to ClaimCoach, a firm specializing in this field, the decline in value could approach 50 percent if the body shop doesn't replace damaged equipment with factory parts and the repairs are visible. The firm (accessible at www.claimcoach.com) offers to provide a diminished-value estimate for $59.
Q: I expect to rely mainly on stocks to support my retirement, but I worry about the disruptive effect of US economic ups and downs. Would some foreign investments make the road smoother?
A: Possibly. An extensive study conducted recently by researchers at Trinity University in San Antonio found that diversifying abroad could help improve the odds of maintaining a steady portfolio payout over withdrawal periods shorter than 25 years, particularly if the withdrawal rate is relatively moderatenot more than 7 percent, adjusted for inflation. While you shouldn't count on foreign issues to fully insulate your portfolio against bear markets, including shares of internationally oriented mutual funds in it can boost average returns and reduce risks.
Q: My wife and I had no children when we bought a two-bedroom condo last year, but now she's expecting in December. We intend to sell the unit as soon as we can and buy a house instead. Since her pregnancy was unplanned, will part of our profit on the condo sale be tax-free, even though we won't have lived there two years?
A: Probably not, since you won't have owned and occupied your present home for at least 24 months. And, despite the fact that recently issued IRS regulations allow a partial exclusion of tax on a home sale gain when a premature move is due to "unforeseen circumstances," a single newborn doesn't meet that test. So unless your wife has twins, you'll have to convince the IRS that the move is necessary for health reasons.
Q: We'll be vacationing in the Southwest and hope to acquire some authentic examples of Native American arts and crafts. How can we protect ourselves from fakes?
A: The law says that an item marketed as "Indian" or "Native American" must be produced by a member of a state or federally recognized tribe or by a certified Indian artisan. It's more likely to be genuine if it carries a certification tag from the Department of the Interior. Be mindful that such items can be legitimately labeled as Indian even though they're made by machine rather than by hand. So if the salesperson claims a piece is hand-worked, get him to put it in writing.
Sources of details useful to buyers include: the Indian Arts and Crafts Association ( www.iaca.com); Indian Trader, a newspaper published in Gallup, NM (505-722-6694); Native Peoples magazine, Phoenix, AZ (602-265-4855); and American Indian Art Magazine, Scottsdale, AZ (480-994-5445).
Do you have a money management question that may be stumping other doctors, too? Write: MMQA Editor, Medical Economics, 5 Paragon Drive, Montvale, NJ 07645-1742, or send an e-mail to email@example.com (please include your regular postal address). Sorry, but we're not able to answer readers individually.
Lawrence Farber. Money Management Q&As. Medical Economics Oct. 24, 2003;80:70.