Market Commentary
For the week of July 28, 2008

The Market
Wall Street closed a volatile week with uneven gains Friday after better-than-expected economic
numbers calmed the market which a day earlier was dealing with concerns from the housing and the
financial sectors. The Dow ended the week down 1.09 percent to 11,370.69. The S&P lost 0.22 percent
for the week to finish at 1,257.76, while the NASDAQ rose 1.22 percent to end the week at 2,310.53.

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.

Take Your Order? – The Commerce Department released its durable goods report on Friday, showing
a 0.8 percent increase in orders for big-ticket manufactured items such as automobiles, appliances and
machinery – the largest increase in four months. The increase beat the 0.4 percent decline that analysts
had predicted.

Saving More – Retirement assets held in individual and employer-sponsored defined contribution
accounts grew 11 percent last year, according to the Investment Company Institute. At year-end, total U.
S. retirement assets stood at $17.6 trillion. Defined contribution plan assets were $4.5 trillion, or 40
percent of employer-sponsored plan assets, including $3 trillion in 401(k) plans, a 10 percent increase
over 2006.

Not Much – The maximum Social Security retirement benefit that could be earned by an individual
reaching full retirement age in the year 2008 (i.e., at age 65 years and 10 months) is $2,185 a month or
an annualized $26,220 (Source: Social Security Administration, BTN Research).  

Separate From MedicareA 65-year old couple would need to set aside $215,000 today (i.e., a
present value amount) in order to cover their out-of-pocket health care expenditures over the subsequent
15-year period (Source: Fidelity, Barron’s, BTN Research).  

Freddie And Fannie – The Federal Home Loan Mortgage Corporation (aka Freddie Mac) and the
Federal National Mortgage Association (aka Fannie Mae) buy mortgages from banks (thus providing
banks with new money to loan) and oftentimes resell the purchased loans to investors, providing a
guarantee of repayment to the new owners of the mortgages. Freddie Mac and Fannie Mae own or back
$5.2 trillion of mortgages, equal to 49 percent of the nation’s $10.6 trillion mortgage market (Source:
Federal Reserve, USA Today, BTN Research).    

WEEKLY FOCUS - The Importance of Your 401(k)

We have long stressed the importance of a 401(k) or
other defined contribution plan to an individual’s overall
retirement plan. A new study from Hewitt Associates, a
global human resources company, emphasizes just
how important 401(k) accounts will be for future retirees.

The study also raised the bar for how much a
person needs at the time he retires so as not to
outlive his money. Due to greater longevity and
health care costs, Hewitt estimated that
retirees need 126 percent of their salary at
retirement to cover their expenses – although the
real amount will vary based on age, income and
savings rate. Still, the study seems to contradict the
common wisdom that says Americans will require less income in retirement than they do during working

Using actual data and behaviors of nearly 2 million employees at 72 large U.S. companies, the study
found that fewer than one in five Americans will meet their total estimated needs in retirement. Taking
advantage of employee 401(k) plans throughout their career, however, increases those odds
dramatically. According to the research, “employees who contribute to a 401(k) plan can expect to
replace 96 percent of their preretirement income. Those who do not save can expect to replace only 54
percent of preretirement income, with a heavy reliance on Social Security.”  

We hope you’re taking advantage of the various retirement plans available to you. We also hope you will
spread the word to your children and grandchildren who may be starting their first jobs where they have
access to a 401(k). We can help you or a family member build a full retirement plan that takes into
consideration your employer-based accounts as well as other sources, and we’ll be here when you retire
to help handle the rollover of your plan account. Call us if you would like to review or create a plan for
yourself or a family member.

* 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. Written by Securities America. WMCSAI# 284103
Copyright © 2010 The Money All rights reserved.
Returns through 7/25/08
1 Week  
Dow Jones Industrials  
NASDAQ Composite
S&P 500  
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