3 Things 6-22-26

 Thing One

Has Bundling Your Home and Auto Insurance Finally Run Its Course?

For decades, insurance consumers have been told the same thing: bundle your home and auto policies and save money.

The pitch is simple. Put both policies with the same company and receive a "multi-policy discount." The insurance company wins. The agent wins. And supposedly, you win too. But in today's insurance environment, consumers should be asking a different question: Am I actually saving money, or am I just being shown a discount on an inflated price?

Insurance companies proudly advertise bundle discounts ranging from 10% to 15% on average. Some carriers advertise even larger savings. On the surface, that sounds compelling. After all, who wouldn't want a 15% discount? Yet a discount only matters if the starting price is competitive in the first place.

Imagine a retailer marking a product up by 20% and then offering you a 15% sale. You feel like you're getting a bargain, but you're still paying more than you would have elsewhere.

Insurance can work the same way.

A company may be extremely competitive on homeowners insurance but expensive on auto insurance. Another company may be the exact opposite. Yet when both policies are bundled together, the consumer often focuses on the discount percentage instead of the total premium.

The result is that many homeowners never discover that buying their home policy from one carrier and their auto policy from another could actually cost less than the "discounted" bundle. Even insurance professionals acknowledge this reality. In many markets, the cheapest bundled option is not always cheaper than the best combination of separate policies.

There is also an incentive structure at work. Most insurance agents are compensated through commissions paid by the insurance company. More policies often mean more commission revenue and stronger retention. If a client has both home and auto coverage with the same carrier, they are typically less likely to shop around and switch companies.

To be clear, most agents are not acting maliciously. Bundling has historically been a legitimate way to save money and simplify billing. But consumers should recognize that the recommendation is not entirely altruistic. The agent benefits when multiple policies stay under one roof.

The economics of insurance have also changed dramatically.

Vehicle repair costs have exploded over the past several years. What used to be a simple bumper replacement can now involve cameras, radar sensors, lane-keeping systems, adaptive cruise control equipment, and extensive recalibration procedures. A minor collision today can cost thousands more than a similar accident would have cost just a few years ago.

Industry data shows auto insurance rates increased dramatically from 2022 through 2024 as insurers struggled to keep up with rising claim costs. Repair costs, parts prices, labor expenses, litigation costs, and increasingly sophisticated vehicle technology have all contributed to higher premiums. Even windshield replacements often require recalibration of safety systems. The days of inexpensive repairs are largely gone.

Homeowners insurance faces its own challenges. Replacement costs for roofs, labor, building materials, and weather-related claims have pushed premiums higher across much of the country.

As insurers try to recapture profitability, consumers should be skeptical of any marketing message that focuses exclusively on discounts.

The number that matters is not the discount. The number that matters is the check you write.

Suppose Company A quotes:

• Auto Insurance: $2,400

• Homeowners Insurance: $2,000

• Bundle Discount: 15%

Your combined premium becomes $3,740. Sounds great.

But what if Company B offers homeowners insurance for $1,600 and Company C offers auto insurance for $1,700? Now your total cost is $3,300. You just saved $440 by refusing to be distracted by the discount.

The lesson is simple. Bundling is not automatically bad. In many cases it still produces the best result. But consumers should stop assuming that a bundle discount guarantees savings.

The insurance marketplace has become too competitive, too fragmented, and too expensive for assumptions.

Every few years, it makes sense to compare:

1. The bundled option.

2. Separate home and auto policies from different carriers.

3. The actual total premium after all discounts.

The insurance industry wants you focused on the percentage discount. Smart consumers focus on the final number. Those are not always the same thing.

Thing Two  

Nobody Knows Where the S&P 500 Will Be in 10 Years—And That's the Best Reason to Invest Anyway

One of the most common questions investors ask is simple:

"Where will the S&P 500 be ten years from now?" The honest answer is that nobody knows - not even the largest investment firms in the world. Yet some of the brightest minds in investing spend enormous resources trying to answer that question. While their forecasts vary, an interesting pattern emerges: despite their differences, nearly all of them expect stocks to be higher a decade from now than they are today. That may not sound exciting, but it reinforces one of the most important principles in investing: time is often a more powerful ally than prediction.

Consider a few recent long-term forecasts. J.P. Morgan's 2026 Long-Term Capital Market Assumptions project U.S. large-cap stocks to return approximately 6.7% annually over the next decade. BlackRock's capital market assumptions estimate roughly 5.2% annual returns for U.S. equities. Goldman Sachs forecasts approximately 6.5% annualized returns over the next ten years.

Notice that none of these firms are forecasting a stock market apocalypse. They're also not forecasting the kind of double-digit returns investors enjoyed during some of the strongest periods in market history.

Instead, they are projecting something far less exciting but potentially far more useful: steady compounding.

As of this writing, the S&P 500 sits near 7,400. If those forecasts prove reasonably accurate, here's what the index itself could look like ten years from now (see the first table below). Think about that for a moment. Even the most conservative estimate among these major institutions suggests the market could be more than 60% higher than it is today.

Now let's translate those same assumptions into dollars (see the second table below).

Notice something else? The percentage return is identical in every example. The difference is that larger portfolios benefit more from the same compounding because there is simply more money working on your behalf. A million-dollar portfolio doesn't necessarily need spectacular returns. Even modest growth rates can potentially create hundreds of thousands of dollars of additional wealth over a decade.

The key isn't predicting the future perfectly, it's taying invested long enough for compounding to do its work.History provides some perspective. Since its creation in 1957, the S&P 500 has delivered roughly 10% annualized returns before inflation over long periods. Yet those returns have never arrived in a straight line. Investors experienced the crash of 1987, the dot-com collapse, the Financial Crisis of 2008, the COVID panic of 2020, and countless recessions, wars, political battles, inflation scares, debt ceiling fights, and market corrections in between. At the time, each felt enormous.

In hindsight, they appear as temporary interruptions in a long-term upward trend.

But this is where many investors make a mistake. They see a forecast showing the S&P 500 reaching 12,000, 13,000, or even 14,000 over the next decade and assume the journey will be smooth. History suggests the exact opposite. A typical ten-year period is likely to include at least one bear market, several corrections of 10% or more, and numerous periods when investors become convinced the market will never recover.

During the Financial Crisis, the S&P 500 fell approximately 57% from peak to trough. During the COVID panic, it fell roughly 34% in just over a month. During the dot-com collapse, the index lost nearly half its value. Yet long-term investors who remained disciplined were ultimately rewarded. That's why forecasts should be viewed as roadmaps rather than promises. They provide direction, not certainty. In fact, the experts could be completely wrong. Artificial intelligence could trigger a productivity boom that leads to returns far exceeding today's expectations. Alternatively, inflation, government debt, geopolitical conflict, or economic stagnation could result in much lower returns than currently projected.

No forecast can account for every possibility. If you had asked investors in March 2009 where the market would be ten years later, very few would have predicted one of the strongest bull markets in history.

Likewise, if you had asked investors in early 2000 where stocks would be ten years later, many would have been shocked to learn that the S&P 500 would produce virtually no return for the decade.

The future has a habit of surprising everyone. Which brings us back to the original question. Where will the S&P 500 be ten years from now?

Nobody knows. But history suggests that productive businesses will continue creating goods, providing services, developing technology, and generating profits. The S&P 500 represents ownership in many of the most successful companies on Earth. As long as those companies continue to innovate and earn money, investors have reason to believe that patient ownership will be rewarded over time.

Thing Three

Just A Thought  

"No matter how many mistakes you make or how slow you progress, you are still way ahead of everyone who isn’t trying." - Tony Robbins