Stock Market Commentary
For the week of December 1, 2008
Wall Street continued its rally on Friday, with the Dow and S&P marking their largest five-day percentage gains since 1932 and 1933, respectively. The rally, which began Nov. 21, has seen the Dow rise 16.9 percent, the S&P 19.1 percent and the NASDAQ 16.7 percent. The announcement of President-elect Obama’s economic team, the government assistance to Citigroup and the Federal Reserve decision to purchase large amounts of mortgage-backed securities helped boost the market. For the week, the Dow ended up 9.82 percent to 8,829.04, the S&P rose 12.09 percent to close the week at 896.24 and the NASDAQ gained 10.92 percent to finish the week at 1,384.35.
The Range – In the one year following the low point from each of the nine bear markets that have occurred since 1957 (not counting the current 10th bear market), the S&P 500 has experienced a double-digit return. The best of the nine produced a 58.3 percent return. The worst of the nine was up 23.2 percent. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market (Source: BTN Research).
Bond, James Bond – In 1964, a movie ticket to see Goldfinger, starring Sean Connery as James Bond, cost an average of $1. If you see the movie Quantum of Solace today, starring Daniel Craig as 007, the average cost for a movie ticket will be $7.08. This doesn’t include your popcorn, soda and other treats.
Consumer Confidence – The Conference Board Consumer Confidence IndexTM improved moderately in November from an all-time low in October. The Index, which is released on the last Tuesday of each month, showed the Index now stands at 44.9, up from October’s 38.8 reading. The Consumer Confidence SurveyTM is based on a sampling of 5,000 individuals, and gauges the public’s optimism or pessimism with regards to the U.S. economy.
Giving – Legislation added to the $700 billion rescue plan signed by President Bush on Oct. 3, 2008, extended a tax benefit that had originally expired on Dec. 31, 2007. Americans at least age 70½ now have until the end of next year (i.e., Dec. 31, 2009) to make direct gifts from an IRA to a tax-qualified charity. Without this extension, an individual would have to take a withdrawal from his/her IRA, pay taxes on the distribution, and then make a contribution to a charity. This limited-time exception allows for a tax-free IRA distribution of up to $100,000 to be transferred directly to a charity (Source: Kiplinger’s Retirement Report, BTN Research).
WEEKLY FOCUS – The Gift of Financial Preparedness
As the holiday season rapidly approaches, thoughts turn to gifts – and budgets, year-end tax preparations and goals for the coming year. Regardless of upbringing, income, marital or parenthood status, you and your loved ones can always benefit from the gift of financial knowledge and preparedness.
For individuals who have little or no experience in managing money, taking small steps can prevent feeling overwhelmed. Reading websites, magazines and books about financial topics or taking a community college course can provide a great foundation. Professional financial advisors can help as well.
Having a team of advisors – a financial advisor, accountant, attorney and insurance professional – can help during difficult times when emotions may cloud financial judgment and make anyone susceptible to scams that target the newly divorced or widowed. A crisis like divorce or death is not the time to be looking for a credible professional in any field.
A solid understanding of financial issues and the household’s financial picture, along with a team of trusted advisors, can provide the confidence needed to make life’s financial decisions. Make sure the people you care about have the knowledge they need.
To schedule an appointment for yourself or to refer a loved one, please contact our office. You can count on us to always be available to answer your questions or to speak with someone you know that could benefit from our financial experience and knowledge.
* 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# 290610