Stock Market Commentary
For the week of September 1, 2008
After mixed results on Tuesday and sizable gains on Wednesday and Thursday, the major markets dropped Friday on light trading in advance of the holiday weekend. The Commerce Department reported that personal incomes fell 0.7 percent in July, higher than the 0.1 percent economists expected. The Dow ended the week down 0.70 percent to 11,543.55. The S&P dropped 0.69 percent to close the week at 2,367.52, and the NASDAQ lost 1.95 percent to finish the week at 1,282.83.
Greater GDP – The Commerce Department last week revised the U.S. gross domestic product (GDP) for second quarter 2008 upward to 3.3 percent from a previously reported 1.9 percent. The GDP measures growth of the nation’s economy. Export figures were also revised from a 9.2 percent annual growth rate, as previously reported, to 13.2 percent.
High Jump – July orders for durable goods, which include big ticket items like factory equipment and automobiles, rose to an unexpectedly high of 1.3 percent, far outpacing the 0.1 percent analysts had predicted. Demand for commercial aircraft rose 28 percent in July, overcoming a 21.3 percent decline in June.
By The Decade – The cost of living (as measured by the consumer price index) in the U.S. increased 24 percent in the decade of the ’50s, 28 percent in the ’60s, 103 percent in the ’70s, 64 percent in the ’80s and 33 percent in the ’90s. For the first 8 years of the current decade (2000-07), the cost of living nationwide has increased 25 percent. The consumer price index is a measure of inflation compiled by the U.S. Bureau of Labor Studies (Source: Department of Labor, BTN Research).
One Way To Solve The Problem – The age at which an American can receive full Social Security income retirement benefits is a function of an individual’s date of birth and can be no higher than 67 years old under current law. In response to the program’s long-term projected financial problems, the American Academy of Actuaries has proposed increasing the maximum age to receive full retirement benefits to 70, an age that would be phased in over an 18-year period (Source: American Academy of Actuaries, BTN Research).
A Quiet Period – The next Fed meeting is scheduled for Sept. 16, 2008, or just seven weeks prior to the Nov. 04, 2008, presidential election. The nation’s central bank has raised or lowered interest rates during the period from mid-September through election day only one time in the last 20 years (Source: Federal Reserve, BTN Research).
WEEKLY FOCUS – Financial Planning for Nontraditional Families
Television in the 1950s and ’60s gave us plenty of images of the “traditional” family – a married man and woman with biological children. Even back then, real life wasn’t quite that clean cut, but U.S. laws typically assumed that model of a nuclear family.
Whether more prevalent or simply more public, nontraditional families have come further into the mainstream and may often find that the rules – from tax treatment to employee benefits to estate issues – do not exactly fit their needs. Even traditional families may find that subsequent generations create situations – through marriage, divorce, co-habitation or having children – that call for special estate planning considerations.
While a family may have a nontraditional structure, its financial needs will most likely be similar to those of traditional families – saving for college, planning for retirement, managing risk and transferring assets at death. The path to attaining those goals, however, may require creative thinking and a deeper level of knowledge about available tools.
For example, for a married couple, a spouse typically has health care and financial powers if the other spouse becomes ill. That’s not the case for a non-married couple, which can create problems when hospitals or banks must follow privacy regulations and withhold information from the partner. An advanced health care directive and a financial power of attorney must be in place to ensure the competent spouse can continue to make decisions.
Our office can work with other professionals in accounting, legal and insurance to create financial plans and other important documents that fulfill the needs of nontraditional families. Call our office to schedule an appointment for you or your loved one.
* 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# 286421