WEEKLY STOCK MARKET COMMENTARY 12 17 2007

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WEEKLY STOCK MARKET COMMENTARY
For the Week of December 17, 2007

THE MARKETS

WEEKLY STOCK MARKET COMMENTARY 12 17 2007
Source: Morningstar.com. * 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” is a reflection of return to an investor, by reinvesting dividends after the deduction of withholding tax.

Spending More – Retail sales grew 1.2 percent in November, with half of that gain coming from gasoline prices. That compared to a 0.2 percent increase in October, according to the Commerce Department. Economists had expected a 0.6 percent gain in retail sales. The November increase is the largest since May 2007.

Real Estate, Gross and Net – Although the gross value of the average American’s primary residence makes up 29 percent of a household’s total assets, the value of an average American’s home equity is equal to only 19 percent of the household’s total net worth. Home mortgage debt nationwide has almost doubled (up 91 percent) since the end of 2001 (Source: Federal Reserve, BTN Research).

Pretty Conservative – The Pension Benefit Guaranty Corporation (PBGC) insures the pension benefits of 44 million American workers and retirees in 30,460 defined benefit pension plans. As of the end of the 2007 fiscal year, the PBGC was investing its $67 billion of assets in a 28 percent stock, 72 percent bond asset allocation (Source: PBGC, BTN Research).

Bulls During a Bear Market – Even during the two and a half year bear market (2000-02) in which the S&P 500 fell 49 percent, the stock index still experienced three separate bull runs while in the throes of the longer-running bear market. Each of the 3 “up-periods” produced gains of at least 19 percent. The bull runs were short-lived, as two of the three lasted less than a month and a half month each (Source: BTN Research).

Rate Freeze – The Bush administration released plans on Dec. 6 of a mortgage interest-rate freeze that would benefit some portion of the 1.2 million adjustable rate subprime mortgages ARMS that are due to reset to higher levels between Jan. 1, 2008, and July 31, 2010. The rate-freeze would cause the lower introductory rates offered by the mortgages to continue for an additional five years (Source: Treasury Department, BTN Research).

WEEKLY FOCUS – Who Needs Your Social Security Number?

Because Social Security numbers (SSN) are unique to each individual, many businesses have made them the method of choice for establishing identity on customer accounts. That’s why having your SSN makes it so easy for an identity thief to set up bogus accounts in your name – and why you should push back on businesses who demand it from you.

Who really needs your SSN? Your employer and your bank or financial service company may require it to comply with federal law, and if you use Medicare or
Medcaid, your doctor’s office will need your SSN to file claims for those charges. Beyond that, few others actually need your SSN. What they do need is some form of
identification. A driver’s license, state-issued identification or passport is usually preferred, and some companies will ask for a second piece of ID to confirm your license. This can often take the form of a birth certificate, credit card bill, bank statement, pay stub or company security badge. Just make sure none of those documents contains your SSN.

Be prepared to offer these forms of identification when you decline to give your SSN. You may be told that you cannot conduct business with the company without divulging your SSN. Ask for a supervisor – and keep asking, on up the chain of command until you find someone who understands the importance of guarding your SSN and agrees to accept other forms of identification. If that doesn’t work, consider paying cash rather than establishing credit or billing account – or find another company to do business with.

On average, victims trying to prevent identity theft spend 60 hours and $1,180 cleaning up the damage, according to the Federal Trade Commission. Take the first step in protecting yourself by giving your SSN only to those who truly – by law – need that information. If you have questions about how we use and protect your SSN or when a requirement to provide your SSN is legitimate, please feel free to contact our office at any time.

* 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. WMCSAI# 263919