For the week of June 9, 2008
The number of U.S. jobs dropped by 49,000 in May, less than analysts expected. The decline increased
the unemployment rate to 5.5 percent in May from 5.0 percent in April. Oil prices rose more than $11 a
barrel on Friday. For the week, the Dow lost 3.28 percent to end at 12,209.81. The S&P fell 2.76 percent
to 1,360.68, and the NASDAQ dropped 1.91 percent to finish the week at 2,474.56.
Source: Morningstar.com. * 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.
Keep On Giving – The Committee Encouraging Corporate Philanthropy (CEPC) reported that U.S.
companies continued to increase their donations to charity last year. The CEPC is an international forum
co-chaired by actor Paul Newman. Despite a weakening economy, the average amount donated by the
155 companies surveyed increased 5.6 percent from 2006 or approximately 1 percent of their
respective pre-tax profits.
Business Structure – The first limited liability companies (LLCs) in the U.S. were established in
Wyoming in 1977. Many sole proprietors have converted into LLCs because the business owner
continues to be taxed as a sole proprietor yet the business becomes a separate legal entity. Please
consult with a legal and/or tax professional for details (Source: Limited Liability Advisor, BTN
The Magic of Compound Interest – One dollar growing at 8 percent on a tax-deferred basis will
accumulate to $10.06 over 30 years. One dollar growing at 4 percent on a tax-deferred basis will
accumulate to $3.24 over 30 years. Thus, achieving a return two times as great will produce a balance
more than three times as large over 30 years. This mathematical calculation ignores the ultimate impact
of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not
intended to reflect any specific investment or performance. Actual results will fluctuate with market
conditions and will vary (Source: BTN Research).
Slow Growth – The growth in the U.S. economy in the first quarter 2008 was 0.9 percent (quarter-over-
quarter gain expressed as an annualized total). The Fed’s low-end growth estimate for the entire 2008
calendar year is only 0.3 percent. The last time the U.S. had annualized growth for a calendar year of 0.3
percent or lower was 1991 (Source: Commerce Department, Federal Reserve, BTN Research).
WEEKLY FOCUS - Rebalancing Your Retirement Accounts
The combination of the defined contribution plan, payroll
deduction and, thanks to the Pension Protection Act,
automatic enrollment makes it easy for workers to put
their retirement planning on cruise control. The changing
speeds of investment earnings and the life changes that
take you in and out of the fast lane, however, mean you
need to adjust that cruising speed once in awhile.
The asset allocation for your retirement account came
from assessment of your personal situation – your age,
marital status, retirement goals – and strategies to
protect you from the fluctuations of the market. Being
what they are, fluctuations don’t usually balance out –
which means you have to periodically rebalance your
investments to get them back to the asset allocation that fits your investment strategy.
Sometimes that means tough decisions – like selling part of a position that has become too large a
portion of your portfolio, even though it has performed well. Emotional investing decisions can be as
detrimental as the out of sight, out of mind approach. We can help you review your 401k or other defined
contribution account and evaluate how best to bring it back to an appropriate asset allocation.
Rebalancing is a core component of the value we bring to our clients. We can also help you with
accounts held away from our firm. All portfolios benefit from regular review to determine if rebalancing or
other changes should be made based on investment performance or your personal situation. Call our
office for an appointment.
* 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# 184595
Copyright © 2010 The Money Alert.com. All rights reserved.
All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. The Money Alert does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any
information prepared by any unaffiliated third party, whether linked to this web site or incorporated herein, and takes no responsibility. All such information is provided solely for
convenience purposes only. The Money Alert is not affiliated with any of the firms or entities listed unless specifically stated. The Money Alert does not provide investment, tax or legal
advice. Please consult the appropriate professional regarding your personal situation.