For the week of February 18, 2008

The markets took economic news more in stride this week, ending the week with slight gains after suffering losses the week prior. Investors remained cautious ahead of the three-day weekend, with markets closed Monday, Feb. 18, in observance of Presidents’ Day. The Fed noted a modest increase in industrial output in January, due primarily to utilities. The Dow gained 1.43 percent ending the week at 12,348.21. The S&P added 1.46 percent to finish the week at 1,349.99, and the NASDAQ rose 0.74 percent to close the week at 2,321.80.

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.

Retail Sales Surprise – Retail sales rose 0.3 percent in January, surprising analysts who had expected a 0.3 percent decline. In December, retail sales dropped 0.4 percent. The Commerce Department said the increase came from sales of new cars and higher priced gasoline.

Change In The Lineup – Starting this week, the Dow Jones industrial average will welcome two new companies and say goodbye to two others. The index of 30 blue-chip stocks has replaced Honeywell International Inc. and Altria Group Inc. with Bank of America Corp. and Chevron Corp. to better reflect the industries with the greatest influence over the economy and stock market. The last time the Dow changed its makeup was almost four years ago.

Deficit Decline – The overall U.S. trade deficit, which has set record highs for the past five years, dropped 6.2 percent in 2007 to $711.6 billion. Despite product safety recalls, imports from China continued to rise, growing 10.2 percent in 2007 to $256.3 billion, the largest gap the U.S. has ever recorded with a single country.

Social Security Trendsetter –
Kathleen Casey-Kirschling made history this month as the first baby boomer to receive a Social Security payment. The Social Security heralded Casey-Kirschling, 62, as a “trendsetter” for applying for benefits online and receiving her payments via direct deposit. Over the next 20 years, about 10,000 people a day will become eligible for Social Security.

The Check’s In The Mail – President Bush last week signed an economic stimulus package that will provide tax rebate checks to 130 million tax filers beginning in May. The amount of the payment decreases for individuals with over $75,000 in income ($150,000 for married couples). According to the IRS website, dividends, interest and capital gains income will not be included in determining eligibility for the rebates. Supplemental Social Security Income (SSI) and non-veteran or non-Social Security pension income (such as from an IRA) will also be excluded.

WEEKLY FOCUS – Check Your Charity Each year, more than 800,000 different nonprofit agencies register with the Internal Revenue Service, double the number that existed in 1990. With so many organizations vying for your donations, how do you determine the most worthy?

The Bill and Melinda Gates Foundation currently reports a $33 billion endowment, and investor Warren Buffett and hotelier Conrad Hilton, in addition to current donations, have each promised about 80 percent of their estate to charity when they die. Led by these prominent figures, today’s philanthropists are adopting a more informed model for making donations. Givers
want a clear understanding of the organization’s goals and finances and want the nonprofit’s leadership held accountable. Perhaps most importantly, donors have taken a more focused approach, channeling their funds into those issues about which they feel passionate, rather than liberally spreading the wealth around.

You don’t have to have Bill Gates’ billions to want your charitable contributions aligned with issues and organizations you find most compelling. You can get more information on organizations you’re considering from these resources:

BBB Wise Giving Alliance at www.give.org
American Institute of Philanthropy at www.charitywatch.org
GuideStar at www.guidestar.org

To be deductible, charitable contributions must be made to qualified organizations. If your contribution entitles you to merchandise, goods or services, including admission to a charity ball, banquet, theatrical performance or sporting event, you can deduct only the amount that exceeds the fair market value of the benefit received. For a contribution of cash, check or monetary gift (regardless of amount), you must maintain as a record of the contribution either a bank record or a written communication from the qualified organization. Check with your tax advisor on the deductibility of your donations.

For more information on targeting your charitable efforts, give our office a call. We can help you identify, from those thousands of noble causes, which spark your passion and how you may best lend them your financial support.

* 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# 269051