Market Commentary
For the week of July 21, 2008

The Market
With the financial sector delivering mixed quarterly results in the past two weeks, the major indexes still
finished the week with significant gains. After finishing below 11,000 for the first time in two years, the
Dow came back with a 483-point gain Wednesday and Thursday, the largest two-day percentage gain
since October 2002. The Dow ended the week up 3.63 percent to 11,496.57. The S&P gained 1.73
percent for the week to finish at 1,260.68, and the NASDAQ rose 1.95 percent to end the week at

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.

Start Now – A 30-year old saving $100 at the beginning of each month and earning 7 percent in a tax-
deferred account until age 60 will accumulate nearly four times as much money as that of a 45-year old
also saving $100 per month and earning 7 percent until age 60. 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).     

Miss A Little, Maybe Miss A Lot – Over the past 20 calendar years (1988-2007), the S&P 500 was up
11.8 percent compounded per year (total return). If you missed the 20 best performance days in those 20
years (i.e., 20 days in total, not 20 days each year), your average annual return lost more than 4½
percentage points and dropped to just 7.2 percent compounded per year (Source: BTN Research).

Backing Off – Approximately one out of every five participants (21 percent) in an employer sponsored
401(k) plan has reduced his/her elective employee deferral into their retirement plan during the current
slowdown of the U.S. economy (Source: Investment News, Putnam Investments, BTN Research).   

Something Is Out Of Whack – Assuming proven oil reserves of 264 billion barrels, the value of Saudi
Arabia’s oil “in the ground” as of June 30, 2008, (valued at $140 a barrel) was $37 trillion, more than  2½
times the value of the total U.S. stock market ($14.1 trillion) as of the end of last month (Source: BP
Global, Wilshire).


If gas prices have you looking at a smaller, more fuel
efficient vehicle, do your homework on the total costs
of trading in your guzzler for a sipper. You might find the
decision a bit more complicated than simply saving a
few cents a gallon on your commute.

There’s no doubt that smaller, more fuel efficient cars
use less gas. According to, trading a Ford
F-150 pickup for a Honda Civic sedan will lower your
gas expenses by about $2,000 a year. Other costs,
however may be higher, such as insurance. The
Insurance Institute for Highway Safety reports that
drivers of small cars tend to be younger, less
experienced and higher risk, which means they are
involved in more crashes – which in turn means more claims and higher premiums.

Using our Ford F-150 and Honda Civic comparison, compare the
insurance rate for a 40-year-old man
who drives 12 miles to work and has coverage for liability of $100,000 per person, $300,000 per
accident and $50,000 in property damage: if he drives the truck, he pays annual premium $597.13. If he
drives the sedan, he pays $835.11 – a difference of almost $240 a year, according to

Insurance premiums aren’t the only hidden costs. A study by Consumer Reports found that if you have
owned your vehicle less than three years, trading it for a new vehicle – even one that is more fuel efficient
– may cost you more. In the first five years of ownership, depreciation makes up about 48 percent of total
costs. Fuel costs make up about 21 percent. Also, if you have financed your car, you pay more toward
interest and less toward principal in the first three years than in later years.

So while downsizing your vehicle may seem like a money-saving move, it may ultimately backfire. Like
many financial decisions, this one requires thorough research and consideration of all the facts. We are
always here as a sounding board and a guide to help you evaluate the options for spending, saving and
investing your money. Feel free to contact our office any time you need a sounding board.

* 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. The Weekly Market Commentary is prepared by Securities America, Inc. for use by our
representatives. WMCSAI# 283523
Copyright © 2010 The Money All rights reserved.
Returns through 7/18/08
1 Week  
Dow Jones Industrials  
NASDAQ Composite
S&P 500  
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.