Market Commentary
For the week of August 10, 2009

The Market
A better-than-expected unemployment report on Friday took the Dow to its highest level since early
November. The Labor Department announced that the
unemployment rate dropped from 9.5 percent in
June to 9.4 percent in July, beating economists’ predictions of 9.6 percent. In July, employers cut the
fewest jobs since August 2008. With the news, the S&P now stands at a 49.4 percent increase from its
12-year low at the beginning of March. The major indexes have been relatively stable for the past several
weeks, with the Dow’s drop of just 39 points on Wednesday ranking as its largest in a month. For the
week, the Dow gained 2.27 percent to close at 9,370.07, the S&P rose 2.38 percent to end at 1,010.48,
and the NASDAQ climbed 1.10 percent to finish the week at 2,000.25.

Source: * Past performance is no guarantee of future results. Indexes are unmanaged and
cannot be invested into directly. Three and five-year returns are annualized. The S&P, excluding “1 Week”
returns, is a reflection of return to an investor, by reinvesting dividends after the deduction of withholding tax.

Bringing Up Baby According to a recent report from the Center for Nutrition Policy and Promotion,
part of the U.S. Department of Agriculture, a baby born to a middle-income family in 2008 will cost its
parents about $221,000 by the age of 17. When adjusted for
inflation, the total expense rises to about
$292,000. The average cost per child varies depending on income level, with higher income families
spending more on child-related expenses.  

Clunker Refill On Friday, President Obama signed legislation to refill the Cash for Clunkers tank with
another $2 billion. Under the plan, which received initial funding of $1 billion, trade-in vehicles with
combined city/highway fuel economy ratings of 18 miles per gallon or less may be eligible for a refund
voucher of $3,500 to $4,500 toward the purchase of a new vehicle. According to the Department of
Transportation, 83 percent of the “clunkers” have been trucks and SUVs, while 60 percent of the new
vehicles purchased were passenger cars. As of Aug. 6, the Toyota Corolla topped the list of new
vehicles purchased using vouchers, edging out the Ford Focus according to the National Highway Traffic
Safety Administration, which reports processing 184,304 clunkers so far.

Coming Back? Ben Bernanke has less than six months remaining in his four-year term as Fed
Chairman. Bernanke’s term, unless extended by President Obama and the Senate, will expire on Jan.
31, 2010 (Source: Federal Reserve, BTN Research).

WEEKLY FOCUS – Health Savings Accounts

Employer health insurance premiums increased by 5
percent in 2008 – twice the rate of inflation, according
to the National Coalition on Health Care. Yet six years
after Congress created
Health Savings Accounts (HSA),
these vehicles for accumulating tax-free dollars for
health expenses are infrequently utilized. Only 14
percent of the population owns an HSA, according to a
recent survey by Guardian Life Insurance, which also
found that only 59 percent have heard of HSAs, and of
that group, only half understand them.

Anyone younger than 65 can open an HSA after
purchasing a qualified high-deductible
health insurance
plan. To be considered “qualified” for 2009, the
insurance plan must have a deductible of at least $1,150 for individuals or $2,300 for families, and have
an out-of-pocket expense limit of $5,800 for individuals and $11,600 for families. Contribution caps for
HSAs are the lesser of the insurance plan deductible or the IRS maximum, which for 2009 is $3,000 for
individuals and $5,950 for families, with those over age 55 allowed a $1,000 catch-up contribution. For
2010, the annual
contribution limits for HSAs are $3,050 for individuals and $6,150 for families. The
minimum deductible for 2010 insurance plans is $1,200 for individuals and $2,400 for families, and the
out-of-pocket expense limit for the health insurance plan is $5,950 for individuals and $11,900 for

Unlike the flexible spending accounts offered by many employers, HSA contributions and gains can be
rolled from year to year – there’s no “use it or lose it” requirement – and you retain ownership of the funds
even if you terminate employment. Because you establish an HSA independent of your employer, these
accounts may provide a health care expense “safety net” should you terminate employment (voluntarily or
involuntarily). They also provide retirees with another vehicle that offers tax deductions for contributions,
tax-free growth and tax-free withdrawals for medical expenses. Withdrawals for non-medical expenses
are subject to income tax, and an additional 10 percent penalty applies for non-medical withdrawals
before age 65.

According to a Towers Perrin Study,
health care costs historically have risen faster than inflation and
wages, an HSA may be one way to lessen the blow and prepare for the future. The accounts are self-
directed, allowing you to use other investment options. We can work with your insurance and tax
professionals to help you determine if an HSA is right for you and which investment vehicles best meet
your needs. Call us to learn more.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of
the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-
chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common
stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan
Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized
benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies
representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all
dividends. Written by Securities America. SAI# 299542
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Returns through 8/7/09
1 Week  
Dow Jones Industrials  
NASDAQ Composite
S&P 500