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%