First Quarter 2009 update

Thanks to the March mid month rally, or the first quarter of 2009 could have been much worse. Here are some market statistics:

The Monthly Index Report for April 2009

Index	Mar-09	QTD	YTD	Description
S&P 500 Index*	8.5%	-11.7%	-11.7%	Large-cap stocks
DJIA*	7.7%	-13.3%	-13.3%	Large-cap stocks
Nasdaq Comp.*	10.9%	-3.1%	-3.1%	Large-cap tech stocks
Russell 1000 Growth	8.9%	-4.1%	-4.1%	Large-cap growth stocks
Russell 1000 Value	8.6%	-16.8%	-16.8%	Large-cap value stocks
Russell 2000 Growth	9.0%	-9.7%	-9.7%	Small-cap growth stocks
Russell 2000 Value	8.9%	-19.6%	-19.6%	Small-cap value stocks
EAFE	6.4%	-13.9%	-13.9%	Europe, Australasia & Far East Index
Lehman Aggregate	1.4%	0.1%	0.1%	U.S. Government Bonds
Lehman High Yield	3.2%	6.0%	6.0%	High Yield Corporate Bonds
Calyon Financial Barclay Index**	-2.5%	-2.2%	-2.2%	Managed Futures
3-mo. Treasury Bill***	0.0%	0.1%	0.1%

The Growth style of investing continues to outpace the value style, which is a little odd for a bear market but has very much to do with technology companies doing very well with NASDAQ only down 3.1% for the year.
There are so many different opinions out there, even from the so called experts, of what investors should be doing. Here is a link to a great article in the Washington Post a few weeks ago that summarizes three of the world's greatest investing pros' current ideas. http://www.washingtonpost.com/wp-dyn/content/article/2009/03/14/AR2009031400057.html?referrer=emailarticle

I can give you an idea of what other people are doing: some, only a handful, have thrown in the towel on the stock market. I suspect these investors may never invest in the market again . A viable alternative exists, as many recent research reports have confirmed, bonds have beaten stocks for the past 10, 20 maybe 30 or 40 years--so an all bond portfolio isn't the silliest thing one could invest in. Especially now that interest rate differentials on corporate, high yield and municipal bonds are so large compared to the past 15 years, bonds look very attractive. A hefty percentage of investors continue to wait patiently for a market rebound, maintaining diversified portfolios with plenty of cash to meet liquidity needs. And lastly, a small handful have decided today's market offers ample opportunity to increase investment and have methodically been adding with every market decline, believing that one day, markets will rise again.

One thing that everyone is doing is really taking a close look at spending and finding ways to cut back. The key to starting is to know where all your money is going. Maintaining a spreadsheet or using something like Quicken or Microsoft money is the first hurdle. Once you know what your money is being spent on, you can begin to set limits. This is one way I, as a financial planner, can be very helpful because I analyze a lot of budgets and so I know what people spend on various things, on average. This isn't about living a life of deprivation but rather making reasonable choices about how you want to spend your money and taking control over spending.