Market Commentary
For the week of December 8, 2008

The Market
Major indexes advanced Friday despite the Labor Department’s report that the nation lost 533,000 jobs
in November, exceeding the 320,000 economists had expected. That seemed to be the theme for the
week: except for Monday, when the Dow dropped 680 points, equity markets experienced fewer swings
even as economic data and corporate announcements remained bleak. Some analysts believe this may
indicate that the markets have fully built in the impact of a recession, paving the way for investors to start
speculating on the recovery. For the week, the Dow fell 2.11 percent to 8,635.42. The S&P dropped 2.18
percent to 876.07, and the NASDAQ lost 1.71 percent to close the week at 1,509.31.

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.

Mortgage Apps Up – Mortgage applications increased by a record percentage amount the last week of
November after a new Federal Reserve program brought rates down to their lowest level in over three
years. According to the Mortgage Bankers Association, applications for new home and refinancing loans
rose 112.1 percent to a seasonally adjusted 857.7, the highest reading since March 21, 2008. Through
the new plan, the Fed will purchase up to $500 billion of mortgage securities backed by Fannie Mae,
Freddie Mac and Ginnie Mae. The announcement brought the average rate on a 30-year fixed-rate
mortgage, excluding fees, down 0.52 percentage points to an average 5.47 percent, the largest decline
since 1990.

12 Days Budget Version – The annual Christmas Price Index compiled by PNC Wealth Management
places the price of following the 12 Days of Christmas shopping list at $86,609 this year, up 10.9 percent
from last year. In a recent article in USA Today comparing past and present prices, only two items on the
traditional list saw a price cut thanks to declines in food prices: three French hens, down $15 to $30, and
six geese-a-laying, down $120 to $240.

Gas Falls, So Do Mileage Deductions – In mid-2008, the Internal Revenue Service made a special
adjustment on the standard mileage deductions, raising rates in response to sky-rocketing gas prices.
For 2009, the IRS has factored in the recent decline in gas prices, lowering the business and
medical/moving deductions. For 2009, the business standard mileage rate is 55 cents per mile, down
from 58.5 cents for the second half of 2008. The rate for medical or moving purposes drops from 27
cents in the second half to 24 cents for 2009. The rate for miles driven for charitable purposes remains at
14 cents per mile. The deduction calculations factor in not only gas costs but other fixed and variable
costs, such as vehicle depreciation.

WEEKLY FOCUS – B’ah Humbug to Gift Cards?

In the rush of holiday shopping, gift cards can be a
tempting alternative to driving from store to store, braving
the crowds to find the perfect item for each person on
your list. Gift cards, however, have risks that may be
even greater than giving a loved one a dud gift.

Consumer Reports estimates that, although 52.1 percent
of Americans preferred a gift card or cash to an actual
gift last year, the total from unused, lost or expired
gift cards reached $8 billion the year before. Many,
particularly those from the major credit card issuers,
come with additional fees or decline in value as they
age. By comparison, Bankrate’s data on gift cards from
the nation’s top retailers showed that none charge fees
and none have expiration dates. To access the lists and details about the issuer’s cards,
click here.

Retailer cards may require some additional homework on the financial stability of the issuing company.
When Sharper Image declared bankruptcy earlier this year, the company announced it would not honor
gift cards, costing its customers collectively up to $40 million. Unfortunately, with the current economy,
more retailers’ customers have faced the same issue at Bombay Co., Tweeter, Circuit City, Linens ‘n
Things and others that have declared bankruptcy, and in bankruptcy proceedings, gift cards are
considered unsecured debt that the issuer may not be required to honor.

Before purchasing gift cards, read the fine print and ask questions about fees, expiration dates,
devaluing as the card ages, or limitations on using the card online versus in a store. Be sure to include
the receipt with the card, and write the card identification number on the receipt to provide as
documentation to the retailer if the card is lost. Consider giving cash or a gift – and if you don’t know the
person well enough to select a gift, consider whether you need to exchange gifts at all. If you receive a gift
card, read the fine print and use the card as soon as possible.

Economic conditions may require changes in your spending during the holiday season and beyond. We
can help you evaluate how adjusting your expenses short-term can help ensure you continue working
toward your long-term goals. Call our office for an appointment.

* 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# 290898
Copyright © 2010 The Money All rights reserved.
Returns through 12/5/08
1 Week  
Dow Jones Industrials  
NASDAQ Composite
S&P 500  
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