For the week of January 14, 2008

Federal Reserve Chairman Ben Bernanke said the central bank stands poised to take action at its next
meeting to cut interest rates to help stabilize the nation’s economy. Bernanke said the Fed does not
believe a recession is forthcoming in 2008. A half-percentage-point cut at the two-day meeting ending
Jan. 30 would take the federal funds rate down to 3.75 percent. In other news, the
Labor Department
reported that import prices were unchanged in December, good news for those worried about
For the week, the Dow lost 1.46 percent to end at 12,606.30. The S&P dropped 0.70 percent to close at
1,401.02 and the NASDAQ fell 2.58 percent to finish at 2,439.94.

Source: * Past performance is no guarantee of future results. Indexes are unmanaged and
cannot be invested into directly. Three and five-year returns are annualized. The S&P, excluding “1 Week”
returns, is a reflection of return to an investor, by reinvesting dividends after the deduction of withholding tax.

Mid-Cap PerformanceMid-cap stocks (as measured by the S&P 400 Mid-cap index) reached 33 all-
time closing highs in 2007 but finished up only 8 percent (total return) for the year. The index peaked on
July 13, 2007. The S&P 400 Mid-cap is an unmanaged index consisting of 400 domestic stocks chosen
for market size, liquidity and industry group representation. Investing in
mid-cap stocks involves riskier
investments based upon price volatility, less liquidity and the threat of competition (Source: S&P, BTN

Retirement Savings in 2008 The maximum elective employee deferral into an employer-sponsored
401(k) plan in 2008 is $15,500, the same amount as in 2007. This is the first year since 2001 that the
amount has not been adjusted upward from the previous year. The $15,500 amount does not include the
$5,000 in “catch-up” deferrals that an individual age 50 or greater can contribute (Source: IRS, BTN

New Jersey Beats Hawaii After ranking second to Hawaii for the past two years, New Jersey has
surpassed the island state to claim the largest percent of millionaires to total households. According to
the Phoenix Affluent Marketing Service, New Jersey has 7.12 percent millionaire households, up from
6.5 percent in 2006. Maryland placed second and Connecticut third. Hawaii, unchanged at 6.7 percent,
was fourth for 2007. The survey defined millionaire households as those with $1 million or more in
investable or liquid assets.

Clueless At the close of business on Wednesday, Oct. 9, 2002, the S&P 500 bottomed at 777 before
beginning a bull market run that gained 101 percent to peak at 1,565 on Oct. 09, 2007, exactly five years
to the day after the bear market bottom. The headline in the business section of USA Today on Thursday
morning, Oct. 10, 2002, was “Where’s the Bottom, No End in Sight” (Source: USA Today, BTN

WEEKLY FOCUS - Stick to Your Financial Plan

The past year has sent the stock markets smashing
through record high after record high, with some
gut-wrenching drops in between, like the Dow’s
416-point slide in February 2007. That roller coaster
ride has tested even the most stoic of investors, but
those with a professionally prepared, long-term financial
plan most likely have fared better than most do-it-yourself
investors. Studies in the emerging science of
neuroeconomics have found that your brain’s survival
wiring, which makes you seek reward and avoid risk or
pain, has stronger grounding than your logical wiring. Put
to the test, your desire to avoid pain will usually win over

A financial plan can bolster your logic when your emotions want to take over. Your financial plan was
developed based on your personal situation, including your goals, your age, your assets and income,
your liabilities and your tolerance for risk. Faced with volatility and the emotional desire to flee the pain of
market losses or increase the euphoria of market gains, go back to your plan: Has anything changed
about your personal situation as a result of the market? If not, there may be no reason to change the plan.
You should review your plan at least annually and whenever you face a life-changing event, such as
marriage, birth of a child, an empty nest, retirement, divorce or
widowhood, illness or disability, or death
of a spouse, parent or child.

Market swings make headlines because they reflect change – one of journalism’s criteria for news
making. As we’ve seen this year, daily market swings don’t necessarily reflect a trend of any
significance. Trying to guess which way it will go on a given day, week, month or even year is a fool’s
game that plays to your emotions.

Your financial plan, on the other hand, plays to your logic. As you reach milestones in your life, you can
look at your plan and say, “Ah, yes. We talked about this, and we prepared for it.” That applies to market
volatility as well; your financial plan takes into consideration the affect of
market volatility and uses
diversification, asset allocation and rebalancing, among other strategies, to offset those risks.

Will your account balance at times show a drop in value? Absolutely. No one can guarantee you will
never lose money on an investment. Consulting your financial plan and talking to us when you have
concerns can give your logic the boost it needs to keep your emotions from running roughshod over your
financial goals. If you would like to schedule an appointment to create a financial plan or review your
existing plan, please 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. WMCSAI# 265715
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Returns through 1/11/08
1 Week  
Dow Jones Industrials  
NASDAQ Composite
S&P 500  
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