Stock Market Commentary
For the week of March 9, 2009
The Market
Last week’s market decline failed to attract the bargain hunters needed for a rally, even as several weekly economic reports beat analysts expectations, including retail sales and factory orders. February job layoffs totaled more than 600,000 workers, worse than economists expected but not as bad as some investors had anticipated. The Dow finished the week down 6.13 percent to close Friday at 6,626.94. The S&P dropped 6.97 percent to end the week at 683.38, and the NASDAQ declined 6.1 percent to close the week at 1,293.85.
A Good Year – Exxon Mobil Corp, (XOM), the largest capitalized stock in the S&P 500 at the end of 2008 (worth $406 billion) is also its most profitable, earning a record $45 billion last year, equal to $1 million of profit every 11 ½ minutes (Source: Houston Chronicle, BTN Research).
National Stat – The median net worth of American families that rank in the top 10 percent of wage earners in the country is $1.1 million while the average net worth of that group is $3.3 million (Source: Federal Reserve Board’s Survey of Consumer Finances, BTN Research).
Enough – Nearly two out of every three American business executives surveyed (64 percent) do not support the rescue of any additional U.S. industries beyond the bank and auto bailouts that have already been started by the government (Source: Deloitte, USA Today, BTN Research).
A Very Long Time – The stimulus package signed into law by President Obama on Feb. 17, 2009, has been valued at $787 billion, i.e., the combined value of federal spending and proposed tax cuts over the years 2009-10. It would take an individual spending $1 million a day more than 2,156 years to spend $787 billion (Source: BTN Research).
Worth Many Times The Paper It’s Printed On – The discontinuation of paper certificates for stocks and bonds has created a niche antique market for these documents. According to the dictionary, the collecting by hobbyists of old stock certificates and bonds that have no intrinsic value other than their aesthetic appeal or relative rarity is called scripophily. Some of these papers can fetch a hefty price: a certificate issued by Walt Disney Inc. in 1955 for 2.5 shares for legendary entrepreneur Walt Disney’s first grandson, signed multiple times by Disney himself, originally listed for $99,000 on www.antiquestocks.com.
WEEKLY FOCUS – Reducing Financial Stress
Weeks like the past two have done nothing to relieve the growing financial stress that many Americans are experiencing. We know, that if history is any indication, the economy will rebound as it has numerous times in the past. In the meantime, however, we’re left wondering when the recovery will begin and what form it will take.
Stress can manifest itself physically as headaches, sleep problems and more frequent colds or flu resulting from a depressed immune system. Emotionally and mentally, you may feel your thinking has become “fuzzy” or you find yourself becoming frustrated and irritable. In addition, feelings of stress can cause you to seek unhealthy behaviors that you normally avoid, including increased drinking, smoking and overeating. Efforts to control spending may have you cutting back on healthy choices like fresh vegetables and gym memberships. Financial stress can create problems in your relationships, such as when you and your spouse disagree about saving and spending priorities.
As with other types of stress, financial stress can often be diminished by facing the source of your stress and taking steps to eliminate or at least cope with it. Part of that process requires identifying what you can and cannot avoid, control or alter – you cannot control the markets, but you can control your own financial plans, from spending to saving to investing. It also helps to have a person you can talk to, whether you want advice or just a sympathetic ear.
Health professionals advise plenty of sleep, healthy eating and exercise as ways to reduce your stress. When it comes to financial stress, we know that having a solid understanding of not just your portfolio but your entire financial picture can help reduce anxiety, as can a plan for how you will spend, save and invest your money, both accumulated and income.
If you are already a client with our office, you may benefit from reviewing your plan with us. If you are not already a client, we welcome the opportunity to discuss the benefits of proactive planning. And either way, we are always available when you need to talk. Call our office 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. Written by Securities America. SAI# 295319
