Market Commentary
For the week of August 3, 2009

The Market
As if to support Federal Reserve Chairman Ben Bernanke’s statement this week that he believes the
recession will end later this year, the major markets posted several milestones on the last day of July.
The S&P has enjoyed its best five-month streak since 1938, the Dow had its best July since 1989, and
the S&P and NASDAQ marked their best gains for July since 1997. The Commerce Department on
Friday reported gross domestic product (
GDP) for the second quarter as down 1 percent, better than the
1.5 percent drop analysts predicted and considerably improved from the 6.4 percent decline in the first
quarter. For the week, the Dow gained 0.86 percent to close at 9,171.61. The S&P gained 0.86 percent
to end the week at 987.48, and the NASDAQ climbed 0.64 percent to finish the week at 1,987.50.









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.

Little By Little Average inflation (as measured by the Consumer Price Index) over the 10 years ending
June 30, 2009, was 2.64 percent per year, i.e., an item that cost $1 on July 1, 1999, cost $1.30 on June
30, 2009. Average
inflation over the 20 years ending June 30, 2009, was 2.80 percent per year, i.e., an
item that cost $1 on July 1, 1989, cost $1.74 on June 30, 2009. The consumer price index (CPI) is a
measure of inflation compiled by the U.S. Bureau of Labor Studies (Source: Department of Labor, BTN
Research).    

Working For Yourself The average net worth of American families headed by a person that is an
employee of a firm (i.e., not a business owner) is $352,000. The average net worth of American families
headed by a self-employed person is $1.96 million. This data is part of the 2007 Survey of Consumer
Finances collected by the Federal Reserve and was released in June 2009 (Source: Federal Reserve,
BTN Research).  

Who Done It? Congress has named a 10-person group, the Financial Crisis Inquiry Commission, to
investigate the causes of the nation’s financial crisis, which exploded across the globe in the fourth
quarter last year. The commission is headed by Democrat Phil Angelides and Republican Bill Thomas.
Both gentlemen are from California. The commission’s final report is due to Congress by Dec. 15, 2010
(Source: CNN, BTN Research).  

WEEKLY FOCUS – Your Personal Health Care Plan

A report from PricewaterhouseCoopers last month
showed that employers who offer
health insurance
could see costs rise 9 percent in 2010. In addition to
normal inflation, the report indicated workers who fear
a layoff would use their health benefits more and that
unemployment would drive up medical costs. Of
employers surveyed by PricewaterhouseCoopers, 42
said they planned to increase employees’ share of
health care costs.

The nation’s leaders have undertaken another attempt
to reform the nation’s health care payment system. The
impact of those changes most likely will not be apparent
this year or even most of 2010. In the interim, health costs
may continue to rise. By focusing on making smart health care decisions, including getting the most out
of employer or government-sponsored insurance programs, you can potentially free up money that can
be invested for your long-term goals such as college savings or retirement.

While you don’t know when you might get sick or suffer an injury, you can predict with some degree of
accuracy the amount you will pay in premiums in the coming year. You may also have recurring expenses
that you can predict: maintenance medications, prescription glasses or contact lenses, annual exams
and vaccinations. Some of these may be covered by insurance, with or without a deductible.

Timing those expenses can make a difference. For example, some employer-based health insurance
coverage includes Flexible Spending Accounts (FSA) that allow employees to set aside pretax wages to
cover medical costs not covered by insurance. Most flex plans have a “use it or lose it” feature – meaning
you must use the dollars in your flex account by year end or you forfeit leftover money. Now may be a
great time to audit your FSA payments for the first half of this year against your provider statements to
ensure any eligible costs have been paid by the FSA. If you discover that you have paid out of pocket for
covered expenses, you may be able to request reimbursement – and then add that cash to your
investment account.

Of course, not everyone has employer-based health insurance. Over the coming weeks, we’ll look at how
leveraging the efficiency of other health coverage options, like
health savings accounts and Medicare
Part B, may make additional money available for investing for your future. If you or a loved one needs
help with strategies for college, retirement or other long-term goals, please 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. Written by Securities America. SAI# 299397
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Returns through 7/31/09
1 Week  
YTD
1-Year  
3-Year
5-Year
Dow Jones Industrials  
0.86
6.56
-16.62
-3.83
0.53
NASDAQ Composite
0.64
25.46
-14.92
-1.83
0.95
S&P 500  
0.86
10.97
-19.96
-6.16
-0.14
MSCI EAFE
2.77
17.81
-22.60
-5.57
4.80