Weekly Stock Market Commentary 7 14 2008

0
147

Stock Market Commentary
For the week of July 14, 2008

The Market
It was a roller coaster week for Wall Street as stocks fell, then soared, and then tumbled again as investors tried to evaluate the dangers facing the country’s largest mortgage financiers, Fannie Mae and Freddie Mac. The Dow dropped 1.59 percent to finish the week at 11,100.54. The S&P fell 1.80 percent to end the week at 1,239.49, and the NASDAQ lost 0.28 percent to close the week at 2,239.08.

Weekly Stock Market Commentary 7 14 2008
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.

The Birth of a Baby – The national average hospital cost of having a baby has increased 121 percent in the past 10 years (to $9,873), more than four times the 30 percent increase in the consumer price index over the same period. The consumer price index is a measure of inflation compiled by the U.S. Bureau of Labor Studies (Source: Wall Street Journal, Department of Labor, BTN Research).

Oil Production in the U.S. – The last oil refinery to be built in the U.S. was in Garyville, La., in 1976, or 32 years ago. There are 148 operating refineries in the country today, less than half the nation’s total in 1985. The reduction in the number of operating refineries is the result of 1) older, less efficient plants being shut down, 2) the concentration of oil production in newer, larger, more efficient plants, and 3) pressure from environmentalists and the guidelines mandated in the federal Clean Air Act (Source: C-Span, BTN Research).

We Consume, Not Save – Gross national savings (i.e., the sum of savings by both the public and the private sectors) as a percentage of the size of our economy is 14 percent, less than half the 29 percent ratio of savings to the size of the economy in Japan. The global average ratio of savings relative to the size of the worldwide economy is 24 percent (Source: BusinessWeek, BTN Research).

Planning Ahead –
In a survey of “early baby boomers” (i.e., individuals turning ages 53-62 this year) with at least $250,000 of investable assets, only 42 percent have completed a detailed retirement income plan (Source: Cogent Research, planadviser.com, BTN Research).

WEEKLY FOCUS – Lessons from Bill Gates’ Retirement – Part 3

Last week we looked at Bill Gates’ retirement from Microsoft on June 27 and its lesson on the psychological impact of leaving behind a career that possibly defined you more than other aspects of your life. This week, we look at the opportunity for retirees to parlay their career experience into philanthropic work.

Gates reportedly will spend about 40 hours a week working for the Bill and Melinda Gates Foundation, the organization he and his wife founded in 2000. The Gates Foundation is the world’s richest charitable organization, with a current endowment of $37.3 billion. His job description at the foundation remains vague, but Gates has been clear that he will leave day-to-day operations to Jeff Raikes, a Nebraska native and 27-year Microsoft executive who recently took the CEO position with the foundation.

Of course, you don’t have to spend 40 hours a week or have $37.3 billion to make philanthropy a priority in your retirement. More and more retirees are finding philanthropy and volunteerism increase their enjoyment of retirement years.

According to a study by the Corporation for National & Community Service, adult volunteering rose almost 30 percent between 1974 and 2005. Another study that used data from the Health and Retirement Study found 45 percent of retirees participated in formal volunteer activities at a religious, educational, health-related or other charitable organization. And Urban Institute economist Barbara Butrica found that retirees who worked and volunteered were 13 percent more likely to consider themselves very satisfied than those who did not. That boost in satisfaction trailed off for retirees who worked or volunteered more than 200 hours a year, and disappeared entirely at 500 hours.2

While your time in retirement may be unlimited, your financial resources most likely are not. Careful planning before and during retirement can help ensure you have the money to support the causes most important to you, and thoughtful estate planning can make that legacy last beyond your lifetime. Call our office for help in planning your finances to fund your favorite causes.

* 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# 282860
____________________

Health and Retirement Study conducted by the University of Michigan’s Survey Research Center for the National Institute on Aging. Quoted in Will Boomer Retirees Form a New Army of Volunteers, Sheila Zedlewski, published by The Urban Institute, December 13, 2007. 2 Walter Updegrave, Three Rules for a Happy Retirement, CNNMoney.com, Jan. 13, 2006.

LEAVE A REPLY

Please enter your comment!
Please enter your name here