Good Bye 2009

Markets Alert
from The Wall Street Journal
----------------------------
Sponsored by NASDAQ OMX
----------------------------


The Dow industrials fell 120.46 points, or 1.1%, to 10428.05 on Friday, capping what was otherwise a banner year that saw the average notch its biggest annual percentage gain in six years. For 2009, the blue-chip measure ended with an 18.8% gain. Still, it is down 26.4% from its all-time high set in October 2007.

The Nasdaq Composite Index wrapped up 2009 with a 43.9% gain, while the Russell 2000 index gained 25.2% and the Standard & Poor's 500-stock index added 23.5%.

Enjoy The Spirit Of Christmas

A reprint from www.newseum.org....enjoy

Eight-year-old Virginia O'Hanlon wrote a letter to the editor of New York's Sun, and the quick response was printed as an unsigned editorial Sept. 21, 1897. The work of veteran newsman Francis Pharcellus Church has since become history's most reprinted newspaper editorial, appearing in part or whole in dozens of languages in books, movies, and other editorials, and on posters and stamps.

"DEAR EDITOR: I am 8 years old. "Some of my little friends say there is no Santa Claus. "Papa says, 'If you see it in THE SUN it's so.' "Please tell me the truth; is there a Santa Claus? "VIRGINIA O'HANLON. "115 WEST NINETY-FIFTH STREET." VIRGINIA, your little friends are wrong. They have been affected by the skepticism of a skeptical age. They do not believe except [what] they see. They think that nothing can be which is not comprehensible by their little minds. All minds, Virginia, whether they be men's or children's, are little. In this great universe of ours man is a mere insect, an ant, in his intellect, as compared with the boundless world about him, as measured by the intelligence capable of grasping the whole of truth and knowledge. Yes, VIRGINIA, there is a Santa Claus. He exists as certainly as love and generosity and devotion exist, and you know that they abound and give to your life its highest beauty and joy. Alas! how dreary would be the world if there were no Santa Claus. It would be as dreary as if there were no VIRGINIAS. There would be no childlike faith then, no poetry, no romance to make tolerable this existence. We should have no enjoyment, except in sense and sight. The eternal light with which childhood fills the world would be extinguished. Not believe in Santa Claus! You might as well not believe in fairies! You might get your papa to hire men to watch in all the chimneys on Christmas Eve to catch Santa Claus, but even if they did not see Santa Claus coming down, what would that prove? Nobody sees Santa Claus, but that is no sign that there is no Santa Claus. The most real things in the world are those that neither children nor men can see. Did you ever see fairies dancing on the lawn? Of course not, but that's no proof that they are not there. Nobody can conceive or imagine all the wonders there are unseen and unseeable in the world. You may tear apart the baby's rattle and see what makes the noise inside, but there is a veil covering the unseen world which not the strongest man, nor even the united strength of all the strongest men that ever lived, could tear apart. Only faith, fancy, poetry, love, romance, can push aside that curtain and view and picture the supernal beauty and glory beyond. Is it all real? Ah, VIRGINIA, in all this world there is nothing else real and abiding. No Santa Claus! Thank God! he lives, and he lives forever. A thousand years from now, Virginia, nay, ten times ten thousand years from now, he will continue to make glad the heart of childhood.

Reminder from the IRS!!

RS Reminds Car Shoppers about 2009 Tax Break  

WASHINGTON — The Internal Revenue Service today reminds individual taxpayers who are considering buying a new car that they have until Dec. 31 to take advantage of a tax break that may not be around in 2010.
Taxpayers who buy a qualifying new motor vehicle this year after Feb. 16 can deduct the state or local sales or excise taxes they paid on the first $49,500 of the purchase price. Qualifying motor vehicles include new passenger automobiles, light trucks, motorcycles, and motor homes.
Individuals who itemize and those who take the standard deduction can benefit from this tax break. In states without a sales tax, other taxes or fees can qualify if they are assessed on the purchase of the vehicle and are based on the vehicle’s sales price or as a per unit fee.
The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000. Taxpayers with higher incomes do not qualify.
Taxpayers who take the standard deduction need to complete Schedule L and attach it to Form 1040 or Form 1040A to increase the standard deduction by the allowable amount of state or local sales or excise taxes paid on the purchase of the new vehicle. Also, check the box on line 40b on Form 1040 or line 24b on Form 1040A. Individuals who itemize should include the allowable amount of state or local sales or excise taxes from the purchase of the vehicle on Form 1040, Schedule A

November Returns

With only one month left to go, the year is looking like a pretty remarkable comeback after the dark days of 2008.  Today's Unemployment numbers and rate certainly showed that at least the trend for the economy has turned.  Payroll number was down only 11,000 with an unemployment rate of 10% vs. last month's 10.2%.
Here are the returns:

The Monthly Index Report for November 2009

Index	Nov-09	QTD	YTD	Description
S&P 500 Index*	5.7%	3.6%	21.3%	Large-cap stocks
DJIA*	6.5%	6.5%	17.9%	Large-cap stocks
Nasdaq Comp.*	4.9%	1.0%	36.0%	Large-cap tech stocks
Russell 1000 Growth	6.1%	4.7%	33.1%	Large-cap growth stocks
Russell 1000 Value	5.6%	2.4%	17.6%	Large-cap value stocks
Russell 2000 Growth	3.1%	-4.1%	23.9%	Small-cap growth stocks
Russell 2000 Value	3.2%	-3.7%	12.1%	Small-cap value stocks
EAFE	2.0%	0.8%	30.6%	Europe, Australasia & Far East Index
Lehman Aggregate	1.3%	1.8%	7.6%	U.S. Government Bonds
Lehman High Yield	1.0%	2.8%	53.2%	High Yield Corporate Bonds
Calyon Financial Barclay Index**	2.4%	1.3%	-1.4%	Managed Futures
3-mo. Treasury Bill***	0.0%	0.0%	0.3%
All returns are estimates as of November 30, 2009. *Return numbers do not include dividends. ** Returns are estimates as of November 27, 2009.

Homebuyer's Tax Credit...Update

From the IRS, regarding the tax credit.  It has been improved to include current homeowners and the income limits have been raised.  Here straight from the IRS:

First-Time Homebuyer Credit Extended to April 30, 2010; Some Current Homeowners Now Also Qualify 

WASHINGTON — A new law that went into effect Nov. 6 extends the first-time homebuyer credit five months and expands the eligibility requirements for purchasers.
The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase.
The maximum credit amount remains at $8,000 for a first-time homebuyer –– that is, a buyer who has not owned a primary residence during the three years up to the date of purchase.
But the new law also provides a “long-time resident” credit of up to $6,500 to others who do not qualify as “first-time homebuyers.” To qualify this way, a buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence.
For all qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 tax returns.
A new version of Form 5405, First-Time Homebuyer Credit, will be available in the next few weeks. A taxpayer who purchases a home after Nov. 6 must use this new version of the form to claim the credit. Likewise, taxpayers claiming the credit on their 2009 returns, no matter when the house was purchased, must also use the new version of Form 5405. Taxpayers who claim the credit on their 2009 tax return will not be able to file electronically but instead will need to file a paper return.
A taxpayer who purchased a home on or before Nov. 6 and chooses to claim the credit on an original or amended 2008 return may continue to use the current version of Form 5405.
Income Limits Rise
The new law raises the income limits for people who purchase homes after Nov. 6. The full credit will be available to taxpayers with modified adjusted gross incomes (MAGI) up to $125,000, or $225,000 for joint filers. Those with MAGI between $125,000 and $145,000, or $225,000 and $245,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify.
For homes purchased prior to Nov. 7, 2009, existing MAGI limits remain in place. The full credit is available to taxpayers with MAGI up to $75,000, or $150,000 for joint filers. Those with MAGI between $75,000 and $95,000, or $150,000 and $170,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify.
New Requirements
Several new restrictions on purchases that occur after Nov. 6 go into effect with the new law:

• Dependents are not eligible to claim the credit.
• No credit is available if the purchase price of a home is more than $800,000.
• A purchaser must be at least 18 years of age on the date of purchase.

Retirement Plan for Self Employed Individuals

Many self employed individuals use a KEOUGH or SEP IRA as their retirement plan.  If you have the cashflow to make even greater contributions than these two plans allow, you should consider a solo 401k.  It is fairly easy to set up.  The great part is you can contribute as both employer and employee.  An individual can contribute a total of up to $49,000 per year or $54,500 if over age 50.  However, you have until December 31, 2009 to make your 2009 contributions.  If anyone is fortunate enough to have had a good year and can afford to make a larger contribution to your retirement plan, you should think about the solo 401k.

Financial Literacy

NYPL has a campaign for financial literacy program with lots of great free programs at the Library in NYC.  Pass this information along to anyone who really needs to get started on financial literacy.  Here is the link for the website:
http://www.nypl.org/financialliteracynow/index.html

Anytime I can get involved in the process of education the masses on financial issues, I love to do it.  Much of the volunteer work I do is here in Westchester as we are trying to get more programs started here.  Within the city, there are already some fantastic programs and this is indeed one of them.  If there is a group or an event you would like a financial planner to speak at, please go to www.fpaghv.org.  That is the Financial Planning Association in Westchester County where I am currently Chairperson.  We can find a good speaker for you depending on the topic you are looking for.

October Return Numbers

October was a down month for most segments of the stock market, the first probably since February of this year.  Hefty positive returns for the year abound--especially in growth stocks (like technology stocks) and small company stocks.  Here you go:

The Monthly Index Report for October 2009

Index	Oct-09	QTD	YTD	Description
S&P 500 Index*	-2.0%	-2.0%	14.7%	Large-cap stocks
DJIA*	0.0%	0.0%	10.7%	Large-cap stocks
Nasdaq Comp.*	-3.6%	-3.6%	29.7%	Large-cap tech stocks
Russell 1000 Growth	-1.4%	-1.4%	25.4%	Large-cap growth stocks
Russell 1000 Value	-3.1%	-3.1%	11.3%	Large-cap value stocks
Russell 2000 Growth	-7.0%	-7.0%	20.2%	Small-cap growth stocks
Russell 2000 Value	-6.6%	-6.6%	8.6%	Small-cap value stocks
EAFE	-1.2%	-1.2%	28.0%	Europe, Australasia & Far East Index
Lehman Aggregate	0.5%	0.5%	6.2%	U.S. Government Bonds
Lehman High Yield	1.8%	1.8%	51.7%	High Yield Corporate Bonds
Calyon Financial Barclay Index**	-1.1%	-1.1%	-3.0%	Managed Futures
3-mo. Treasury Bill***	0.0%	0.0%	0.3%
All returns are estimates as of October 30, 2009. *Return numbers do not include dividends. ** Returns are estimates as of October 29, 2009.

Home Buyer's Tax Credit

It looks like the tax credit is going to be extended, though it has not passed yet, according to the WSJ in an article on Oct 29,2009.  From the article:

"The Obama administration blessed the proposed extension of the $8,000 tax credit for first-time home buyers on Thursday as the Senate neared a compromise that would extend the credit to more potential buyers.... 
First-time home buyers are eligible for up to $8,000 on the tax credit, which is the same as the current credit. The Senate version of the bill creates a new credit of up to $6,500 for homeowners who have lived in their homes for five years. That provision would start on Dec. 1....
The tax credit phases out for home buyers with incomes above $125,000 for single filers and $225,000 for married couples. Also, homes that cost more than $800,000 aren’t eligible for the credit."

Important information that may be helpful to you.  

No COLA increase for social security recipients

There will be no cost-of-living-increases for recipients of social security.  If you remember, last year there was an almost 5% increase.  That's bad news number one.
The second piece of bad news is there are no COLA increases for contributions to 401k/403b plans.  Contribution limits will remain at $16,500 per year and $5,500 catch up contribution for those 50 or older.  This means for anyone older than 50, you can put away a total of $22,000 a year. 

My session with author Nick Murray today

I spent a good part of my morning listening to a presentation by author Nick Murray.  I don't expect you would recognize the name as he is really considered an advisor to advisors.  His whole message in a nutshell is that no one can predict what the markets are going to do and when.  The only thing we really know is that over long periods of time (30 years), we need to be owners of companies that make this country great (stock owners).  Any attempt to prognosticate, predict or in any way try to think we can be smart enough to know what is going to happen next--is a complete waste of time, an effort in futility.

I agree wholeheartedly.  So what am I to do?  How am I to function in a world where most people I know including other advisors think that my job IS to predict, IS to know what is going to happen next, IS to pick the next hot sector or stock.  I asked Mr. Murray this question (at which time he became very impatient with me and the length of my question..he is a cranky guy).  He said I should tell the truth to as many people who will hear it.  This is what I try to do every time I post on this blog.

So what can you expect from me as your financial advisor--or for that matter, from any financial advisor? Here is my definiton (I am going to send it to Webster): a financial advisor's job is to advise you how to reallocate your resources in a way that will allow you to meet all of your goals.  Let's make it simpler; I am going to tell you if you are saving enough, I'm going to make sure your investments are properly diversified, I am going to be a source of information for all things financial.  But most of all, I am going to make sure you won't be seduced by the latest investment fad or be seduced by fear. I will help you solve problems and  I will help you make sensible, realistic decisions.

So don't be confused when I post about market returns.  This is just for information purposes--to show you that markets go up and markets go down and that there are very different segments of "the market".  But all that I do cannot be contained in market returns--it is really about everything other aspect of your financial life.

Nick Murray does have one book that is perfect for non advisors.  It is called Simple Wealth, Inevitable Wealth which can be purchased at his website :     http://www.nickmurray.com/books.html

Thanks for reading.

One Year Later

If you had invested in small or mid cap stocks on October 23, 2008---when it seemed like the end of the world was near, you would be up over 30%.  Those who did buy on the dips (rather than sell), are now reaping the benefits.  Large company stocks are only up about 10%.   This data was reported by Morningstar in their weekly market report to financial advisors.

Free annual credit report

The commercial on TV advertising freecreditreport.com is not actually the place to get the free reports as mandated by law.  The actual website that will allow you to get your three free reports, one from each of the major credit companies is www.annualcreditreport.com.  You should check your credit reports occassionally but especially if you expect to be applying for a loan or mortgage in the near future.  Your credit score and history will play a big part in the interest rate offered to you.

Its only a number

The media is making a huge deal about the DOW crossing 10,000 yesterday.  What most have failed to mention is we are still well below the 14,000 high mark reached in mid 2007.  More importantly, the DOW has crossed 10,000 before, the first time was in March of 1999.  At that time, oil was $20 a barrel and gold was $200 an ounce.  Today oil is about $75 a barrel and gold is over $1,000 an ounce--the world has changed dramatically yet the media is still hung up on the DOW at 10,000.  As usual, the media needs something to get fired up about--even though it just isn't that big a deal.  Granted, I am happy the market is up--we all are.  But for many, threats of lay offs still prevail and the ranks of the unemployed continue to grow.  From an economic perspective, things have turned only marginally--but we're partying like its 1999!

I think, and I hate to think out loud in public, but anyway: I think the next big dilemma the market is going to have to deal with is the dollar.  I do not believe it can continue to be devalued--not when we are dependent on foreigners to buy our debt to fund our deficit.  Eventually, they will get annoyed in holding paper that is worth less every day. If the dollar starts to go up, what does that mean for commodities? international investments? and domestic investments?   Something to think about.

Vanguard Issues Mild Warning

The title is "Strong 2009 Performance Warrants Yellow Flag" on Vanguard's website referring to being careful before chasing the returns of recently hot funds.  The funds they cite are:

• Vanguard Capital Value Fund: +68.5%
• Vanguard Emerging Markets Stock Index Fund: +62.6%
• Vanguard Precious Metals and Mining Fund: +59.9%
• Vanguard High-Yield Corporate Fund: +32.4%

I think Vanguard's advice makes a lot of sense in that we investors should not be looking to bet large sums of money on the latest hot fad because we think the investments will continue to maintain their stellar performance.  The truth is, the market dislocations that existed at the end of last year and early this year, which created fantastic buying opportunities, are now mostly gone.  The market does that--it will become irrational for a short time, create great opportunities, then comes to its senses and those opportunities evaporate.  Which is why it is so important to be level headed while the markets are crazy so you can take advantage of these opportunities.  Now we sit and wait.  In the meantime, dollar cost averaging is appropriate for any idle cash and adjusting asset allocations that may have gotten out of balance makes good sense.

A year later

Here is data from www.wsj.com taken from Lipper that shows returns for different mutual fund sectors.  These are not indices, these are returns for actual mutual funds that you and I are invested in.  Pretty amazing how we all thought the end of the world was coming last year at this time.  And now it looks like we are having a truly great year in all markets--bonds, stocks, and international.  Just another cycle of greed, to panic and possible to greed again.  A cycle we have seen many times before and I'm sure we'll see many times again.  Here are the numbers--check out the year-to date especially:

Lipper Indexes

Find Historical Data | WHAT'S THIS?

Tuesday, October 06, 2009

Lipper indexes are based on the 30 largest funds by asset size within the Lipper objective and do not include multiple share classes of similar funds.

		% CHG FROM
Equity Fund Indexes	Last	1-day	1-wk	YTD
Large-Cap Growth	3125.72	1.50	-0.38	28.70
Large-Cap Core	2303.40	1.42	-0.49	21.19
Large-Cap Value	10145.71	1.40	-0.52	18.84
Multi-Cap Growth	2872.12	1.74	-0.44	30.70
Multi-Cap Core	7674.91	1.44	-0.55	27.42
Multi-Cap Value	4282.24	1.36	-0.63	20.91
Mid-Cap Growth	786.29	1.52	-0.58	34.39
Mid-Cap Core	767.09	1.38	-0.97	31.36
Mid-Cap Value	1153.38	1.32	-0.79	31.89
Small-Cap Growth	551.80	1.87	-0.81	30.62
Small-Cap Core	455.24	1.73	-0.94	28.32
Small-Cap Value	739.29	1.83	-1.24	27.30
Equity Income Fd	4469.77	1.34	-0.52	17.06
Science and Tech Fd	706.80	1.72	-0.48	45.51
International Fund	1107.56	2.03	-0.11	31.22
Balanced Fund	5874.01	0.91	-0.21	18.92
		% CHG FROM
Bond Fund Indexes	Last	1-day	1-wk	YTD
Short Inv Grade	298.04	0.11	0.28	9.10
Intmdt Inv Grade	380.03	0.05	0.37	13.10
US Government	510.48	-0.12	0.26	4.30
GNMA	575.38	0.03	0.32	7.96
Corp A-Rated Debt	1348.79	-0.01	0.24	13.84

Source: Lipper

September Update

Here we go: a timely exhibit of various market index returns through September 2009:  I'll have more about this past year and my reflections on what we have been through in my next post.

The Monthly Index Report for September 2009

Index	Sep-09	QTD	YTD	Description
S&P 500 Index*	3.6%	15.0%	17.0%	Large-cap stocks
DJIA*	2.3%	14.9%	10.7%	Large-cap stocks
Nasdaq Comp.*	5.6%	15.6%	34.6%	Large-cap tech stocks
Russell 1000 Growth	4.3%	14.0%	27.1%	Large-cap growth stocks
Russell 1000 Value	3.9%	18.2%	14.9%	Large-cap value stocks
Russell 2000 Growth	6.6%	16.0%	29.1%	Small-cap growth stocks
Russell 2000 Value	5.0%	22.7%	16.4%	Small-cap value stocks
EAFE	3.9%	19.5%	29.6%	Europe, Australasia & Far East Index
Lehman Aggregate	1.1%	3.7%	5.7%	U.S. Government Bonds
Lehman High Yield	5.7%	14.2%	49.0%	High Yield Corporate Bonds
Calyon Financial Barclay Index**	2.0%	1.4%	-2.2%	Managed Futures
3-mo. Treasury Bill***	0.0%	0.0%	0.3%
All returns are estimates as of September 30, 2009. *Return numbers do not include dividends. ** Returns are estimates as of September 29, 2009.

FINRA Alert:Leveraged and Inverse ETFs: Specialized Products with Extra Risks for Buy-and-Hold Investors

FINRA (Financial Industry Regulatory Authority) has issued an investor alert regarding leveraged ETFs.  The alert can be found at :http://www.finra.org/Investors/ProtectYourself/InvestorAlerts/MutualFunds/P119778
For those of you who have your money managed by someone other than yourself or me, you may want to check your statements to see if you own any of this type of investment.  They are really meant to be used for short term trading strategies (never recommended for the average investor) and are not meant for the long term, buy-and-hold investor.

August Returns

I realized I never posted the August returns, so here they are. The market continues to rally, with much scepticism. It is really remarkable that a scant year ago, we seemed to be at the end of the world and now, the market is almost 50% higher than it's March lows. Technically, the market seems a little tired, maybe we get a near term correction of some kind (I have been thinking this for over a month and have been wrong!) The long term trend still points to higher prices, regardless of logic. The great deals in the bond market, particularly high yield have all but evaporated. The best place in the bond market now is with relatively higher quality credits. Mortgage rates are higher than their Spring lows--kudos to all who locked in at a rate starting with a 4%!!!!! HELOC owners, though it shouldn't happen any time soon, beware as your very low rates will be higher by next year. Start to make some extra payments if you can to pay that debt down. I'll be checking in soon with this month's numbers:

The Monthly Index Report for August 2009

S&P 500 Index*	3.4%	11.1%	13.0%	Large-cap stocks
DJIA*	3.5%	12.4%	8.2%	Large-cap stocks
Nasdaq Comp.*	1.5%	9.4%	27.4%	Large-cap tech stocks
Russell 1000 Growth	2.1%	9.3%	21.9%	Large-cap growth stocks
Russell 1000 Value	5.2%	13.8%	10.6%	Large-cap value stocks
Russell 2000 Growth	1.0%	8.8%	21.2%	Small-cap growth stocks
Russell 2000 Value	4.7%	16.8%	10.8%	Small-cap value stocks
EAFE	5.5%	15.1%	24.8%	Europe, Australasia & Far East Index
Lehman Aggregate	1.0%	2.7%	4.6%	U.S. Government Bonds
Lehman High Yield	1.9%	8.1%	41.0%	High Yield Corporate Bonds
Calyon Financial Barclay Index**	0.7%	-0.5%	-4.2%	Managed Futures
3-mo. Treasury Bill***	0.0%	0.0%	0.2%
All returns are estimates as of August 31, 2009. *Return numbers do not include dividends. ** Returns are estimates as of August 28, 2009.

New to this Blog

For anyone who is stumbling upon this blog, perhaps looking for help with financial planning or with investments, here is a great piece about how to "Cut Through the Confusion": http://www.cfainstitute.org/aboutus/investors/pdf/cuttingthroughtheconfusion.pdf

For anyone else, pass this along to someone you know who is looking for help. There are so many different people out there, doing different things, charging different prices...it's hard to know who you are dealing with. Get the facts and know.

The Summer Rally

At the bottom of the television screen while watching CNBC yesterday, I noticed a picture of a sun and the words "summer rally". I thought I was watching the Today show for a minute. The media is now in the entertainment business apparently and are surely fanning the fire of this market rally. The point is, don't be swayed by what the media is saying--their only goal is to increase viewership.
The market continues to do well. The S&P 500 is up 34% from it's March low. Most indices are posting positive returns year-to-date. The market is probably somewhat cheap to fair vs. a very cheap March valuation. Remember how you felt on March 8th? when the market had hit bottom again? Most people wanted to sell everything--which was absolutely the wrong thing to do. All we can do is learn from the past and remember that nothing bad lasts forever. Here are the return numbers through July 31, 2009.

The Monthly Index Report for July 2009

Index	Jul-09	QTD	YTD	Description
S&P 500 Index*	7.4%	7.4%	9.3%	Large-cap stocks
DJIA*	8.6%	8.6%	4.5%	Large-cap stocks
Nasdaq Comp.*	7.8%	7.8%	25.5%	Large-cap tech stocks
Russell 1000 Growth	7.1%	7.1%	19.5%	Large-cap growth stocks
Russell 1000 Value	8.2%	8.2%	5.1%	Large-cap value stocks
Russell 2000 Growth	7.8%	7.8%	20.0%	Small-cap growth stocks
Russell 2000 Value	11.6%	11.6%	5.8%	Small-cap value stocks
EAFE	9.1%	9.1%	18.3%	Europe, Australasia & Far East Index
Lehman Aggregate	1.6%	1.6%	3.5%	U.S. Government Bonds
Lehman High Yield	6.1%	6.1%	38.4%	High Yield Corporate Bonds
Calyon Financial Barclay Index**	-1.2%	-1.2%	-5.7%	Managed Futures
3-mo. Treasury Bill***	0.0%	0.0%	0.2%
All returns are estimates as of July 31, 2009. *Return numbers do not include dividends. ** Returns are estimates as of July 30, 2009.

Cost of Care survey by Genworth

The cost of long term health care is probably one of the greatest sources of anxiety for most retired or wanting to retire individuals. The following is a link to the Genworth website where you can get an idea of current prices (by state) for in home health care, assisted living care and nursing home care. There are a few choices: 1. self insure, 2. partially insure by buying Long Term Care Insurance or 3. plan to spend whatever assets you have then go on Medicaid. Please know that Medicare which is the healthcare benefit that covers Americans 65 and older does not cover in home health care. So if your goal is to stay in your home for as long as possible, you should consider LTC Insurance. The optimal time to buy is in your 50's to early 60's. At a certain point, the cost of insurance becomes prohibitive. Check out this link:
http://www.genworth.com/content/products/long_term_care/long_term_care/state_maps.html

Higher Savings Rate

From a recent research article published by Vanguard:
The U.S. personal savings rate has taken an
about-turn, rising to 6.9% in May 2009, a level
not seen since 1993. Prior to last year, many
households had come to rely on asset growth
as a partial substitute for saving, based on
continued gains in the worth of their homes
and investment portfolios. But as the values of
both these assets dropped significantly during
the recent economic downturn, consumers
changed course, decreasing their spending
and boosting their savings.
The article goes on to describe how this about face in the savings rate has a negative affect on GDP growth in the short term.

Mid Year Results Part 2

Some parts of the market seem to be having a good year specifically tech stocks as indicated by NASDAQ and Corporate High Yield bonds. Does this mean we can expect the market to extend the recent rally? Maybe, maybe not...but at least I can say, the overwhelming fear that paralyzed the market last Fall and in March has subsided. Perhaps markets are slowly returning to business as usual.

Mid Year Results

	Jun-09	QTD	YTD	Description
	0.0%	15.2%	1.8%	Large-cap stocks
	-0.6%	11.0%	-3.8%	Large-cap stocks
	3.4%	20.0%	16.4%	Large-cap tech stocks
	1.1%	16.3%	11.5%	Large-cap growth stocks
	-0.7%	16.7%	-2.9%	Large-cap value stocks
	3.2%	23.4%	11.4%	Small-cap growth stocks
	-0.3%	18.0%	-5.2%	Small-cap value stocks
	-0.5%	25.8%	8.4%	Europe, Australasia & Far East Index
	0.6%	2.2%	1.9%	U.S. Government Bonds
	2.9%	23.1%	30.4%	High Yield Corporate Bonds
	-1.8%	-2.9%	-4.5%	Managed Futures
	0.0%	0.0%	0.2%

Results for May 2009

The Monthly Index Report for June 2009

Index	May-09	QTD	YTD	Description
S&P 500 Index*	5.3%	15.2%	1.8%	Large-cap stocks
DJIA*	4.1%	11.7%	-3.1%	Large-cap stocks
Nasdaq Comp.*	3.3%	16.1%	12.5%	Large-cap tech stocks
Russell 1000 Growth	5.0%	15.0%	10.3%	Large-cap growth stocks
Russell 1000 Value	6.2%	17.6%	-2.2%	Large-cap value stocks
Russell 2000 Growth	3.9%	19.5%	7.9%	Small-cap growth stocks
Russell 2000 Value	2.1%	18.3%	-4.9%	Small-cap value stocks
EAFE	12.0%	26.5%	9.0%	Europe, Australasia & Far East Index
Lehman Aggregate	1.1%	1.6%	2.6%	U.S. Government Bonds
Lehman High Yield	6.7%	19.6%	26.8%	High Yield Corporate Bonds
Calyon Financial Barclay Index**	0.6%	-1.2%	-3.5%	Managed Futures
3-mo. Treasury Bill***	0.0%	0.0%	0.1%
All returns are estimates as of May 29, 2009. *Return numbers do not include dividends. ** Returns are estimates as of May 28, 2009.

Ben Warwick is CIO of Memphis-based Sovereign Wealth Management. He can be reached atben@searchingforalpha.com.

Tips for saving

Here is a link to an article I contributed to. Really good tips for saving money (if I must say so myself). http://www.fpaforfinancialplanning.org/ToolsResources/Articles/SavingMoneyinaRecession/

Losses pared

As the market continues to move higher, most indices are moving into the black for the year. Here are the results as of April 30, 2009.

The Monthly Index Report for May 2009

Index	Apr-09	QTD	YTD	Description
S&P 500 Index*	9.4%	9.4%	-3.4%	Large-cap stocks
DJIA*	7.4%	7.4%	-6.9%	Large-cap stocks
Nasdaq Comp.*	12.4%	12.4%	8.9%	Large-cap tech stocks
Russell 1000 Growth	9.6%	9.6%	5.1%	Large-cap growth stocks
Russell 1000 Value	10.7%	10.7%	-7.9%	Large-cap value stocks
Russell 2000 Growth	15.1%	15.1%	3.8%	Small-cap growth stocks
Russell 2000 Value	15.9%	15.9%	-6.9%	Small-cap value stocks
EAFE	13.0%	13.0%	-2.7%	Europe, Australasia & Far East Index
Lehman Aggregate	0.5%	0.5%	0.6%	U.S. Government Bonds
Lehman High Yield	12.1%	12.1%	18.8%	High Yield Corporate Bonds
Calyon Financial Barclay Index**	-1.8%	-1.8%	-3.9%	Managed Futures
3-mo. Treasury Bill***	0.0%	0.0%	0.1%
All returns are estimates as of April 30, 2009. *Return numbers do not include dividends. ** Returns are estimates as of April 28, 2009.