Stock Market Commentary
For the week of July 20, 2009
The Dow and the S&P broke four consecutive weeks of losses to join the NASDAQ in their best week in four months. Positive earnings reports from Intel Corp., Goldman Sachs Group and IBM helped counter disappointments from GE and Bank of America. The Commerce Department’s new housing report showed construction increased in June to its highest level in seven months, supported by demand from first-time home buyers taking advantage of a special tax break for homes completed by the end of November. For the week, the Dow rose 7.37 percent to close at 8,743.94, the S&P gained 6.98 percent to finish the week at 940.38, and the NASDAQ was up 7.44 percent to end the week at 1,886.61.
Cost Conscious – Women are more cost conscious about health care costs than men, according to a new study commissioned by health insurance company CIGNA. Of 1,000 working adults surveyed, 20 percent of women said they compare costs of doctors and medical procedures, compared to 15 percent of men, and 79 percent of the women report purchasing generic prescription drugs rather than brand-name medications vs. 69 percent of men.
Where Did The Nine Extra Hours Go? – The productivity of the average American worker over the 10 years ending Dec. 31, 2008, is up 28.7 percent, or 2.6 percent per year. That means the workload that would have taken an average employee 40 hours to complete in 1998 in a single week can now be done in 31 hours (Source: Department of Labor, BTN Research).
After A Down Year – In the past 50 years (1959-2008), the S&P 500 has averaged 8.2 percent per year (total return) in the year following a down year for the stock index. That performance is similar to the index’s entire 50-year history, which has produced an average annual return of 9.2 percent. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market (Source: BTN Research).
A Little High – Seventy money managers surveyed in late October 2008 predicted that the price of a barrel of oil would be $92.51 as of June 30, 2009. The actual price of oil was $69.89 a barrel as of June 30, 2009. The price of oil was $67.81 a barrel on Oct. 31, 2008 (Source: Barron’s, BTN Research).
WEEKLY FOCUS – Countdown to College: Insurance
This article is the second in a series on preparing financially for your child or grandchild to start college.
While college students may think of themselves as indestructible, the fact is they face many of the same health, property and liability risks as adults. Before your child or grandchild heads for college, do a quick insurance check.
Health: Most students who have been covered by their parents’ policy can continue that coverage, usually until age 25, as long as they remain a full-time student. A parent’s coverage through an employer usually provides the most benefits for the lowest cost. If this isn’t an option, look into coverage from the college itself, the student’s employer or a short-term policy to cover the gap between full-time student and full-time employee.
Renters: A university or landlord has insurance on its buildings. The coverage for those buildings does not extend to the occupants’ personal property, which today can include higher ticket items like computers, stereos, televisions and other electronics. Renters insurance, which typically costs $15 to $30 a month, replaces lost, stolen or damaged items with the same type and value, so keeping receipts off-site (like at Mom and Dad’s house) can help the claims process. Coverage goes with the policy holder, making it perfect for college students, who tend to change housing frequently. The liability portion of a renters policy also covers damages a student unintentionally causes to the property.
Auto: Again, riding on Mom and Dad’s policy usually presents the cheapest option. If going it alone, students may qualify for discounts by maintaining good driving records, getting good grades and having their renters and auto policies with the same company. Consider insurance costs before buying a car for college – sporty models tend to require higher premiums. Going without coverage isn’t an option. Most states require at least liability auto insurance, and having an uninsured accident can ruin the driver’s credit rating.
Insurance should be part of the pre-college checklist for your child or grandchild. If you have financial questions about a student’s upcoming move to college, please feel free to call 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# 299089