Weekly Stock Market Commentary 3 16 2009

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Weekly Stock Market Commentary
For the week of March 16, 2009

The Market
Boosted by Citigroup’s announcement that it does not require any additional financial support from the government, the major markets rallied to their best week since November. Merck’s acquisition of Schering Plough gave the Dow an additional boost. The S&P enjoyed its third best week since World War II, according to Reuters. The Dow gained 9.14 percent to close the week at 7,170.06. The S&P rose 10.79 percent to end the week at 750.74, and the NASDAQ added 10.64 percent to finish the week at 1,426.10.

Weekly Stock Market Commentary 3 16 2009
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” returns, is a reflection of return to an investor, by reinvesting dividends after the deduction of withholding tax.

Deficit Drop – The nation’s trade deficit dropped in January to its lowest level since October 2002, falling 9.7 percent to $36 billion. If that trend continues for the rest of 2009, the U.S. would enter 2010 with a deficit of $432 billion, a drop of 36.5 percent from 2008 (Source: Commerce Department).

Out vs. In – In spite of the fact that the U.S. had a $677 billion trade deficit in 2008 (imports in excess of exports), we were able to offset much (but not all) of that outflow of dollars by attracting $515 billion of foreign capital into our stocks and bonds. Thus, for every $4 that left the U.S. to buy foreign imports, $3 came into the U.S. as foreigners bought American financial assets (Source: Commerce and Treasury Departments, BTN Research).

Consumers Gaining Confidence – The March reading of 56.6 on the Reuters/University of Michigan Surveys of Consumers exceeded both the February index reading of 56.3 and economists expectations of 55. The number of Americans giving President Obama a positive job rating rose to 23 percent, compared to 14 percent in February. The report concluded that the one-month confidence gain from February to March was the largest ever recorded. The Michigan index dates back to 1952.

Not Enough – Of more than 10,000 Americans surveyed early last summer, only 27 percent were confident that they had or were saving sufficient money for their retirement. Another 23 percent were not sure (Source: Retirement Made Simpler, BTN Research).

The Target Group –
The top 1 percent of wage earners took home 22.1 percent of all national income in 2006, up from 8.5 percent in 1980. This same group paid 39.9 percent of all federal income tax in 2006, up from 19.1 percent in 1980 (Source: Tax Foundation, BTN Research).

WEEKLY FOCUS – Planning for Aging Parents

Watching a parent becoming increasingly dependent on others for the normal activities of daily life can be difficult. It can be even harder for the parent to admit needing help. Creating a plan for how you, your parent, you family and your parent’s medical professionals will handle that possible scenario can alleviate misunderstanding and confusion when a crisis arises.

Here are six tips to prepare for your parent’s aging:

1. Pick a point of contact. One sibling or other close relative should be in charge of communicating with doctors. This person should have a health care power of attorney for the parent.

2. Find a family-friendly primary doctor. An elderly parent may receive care from multiple specialists. With your parent, decide on one doctor to be the primary medical resource. Make sure reports from specialists are sent to the primary doctor. If you are caring for your parent from a distance, consider asking your doctor if he or she is willing to communicate via email.

3. Create a central storage place for vital documents, including medical records, Social Security number and health insurance policy information. In an emergency, you don’t want to be digging through decades of files to find what you need. Hard copies should be duplicated and stored in at least two fire- and water-proof locations. Digital imaging and storage services offer a convenient place to access files remotely.

4. Talk to your parent about long term care insurance. Nursing home costs continue to rise faster than inflation and can quickly deplete your parent’s savings.

5. Create a care circle. Particularly if you live more than an hour or two away from your parent, a network of neighbors, church members and friends can give you some reassurance that others will keep in touch with your parent regularly and contact you in an emergency.

6. Discuss finances. The point-of-contact relative, or another relative equipped to deal with financial matters, should have a financial power of attorney. This person should know the location of key accounts and policies, and the names and phone numbers for key advisors.

A final word of advice: Don’t make promises you can’t keep. A parent who resists help can use emotional leverage to extract promises you’ll later find difficult to keep – like withholding information from other family members or vowing not to place the parent in a nursing facility. Discussing such issues ahead of time can help you and your family avoid these situations. If you would like help in creating a plan for caring for an aging parent, contact our office.

* 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# 295531