Market Commentary
For the week of August 11, 2008

The Market
A rising dollar and falling oil overshadowed news of higher unemployment and lower worker productivity
last week, giving the major indexes their largest weekly gains since April. The dollar gained its highest
level against the euro since February, contributing to the continued drop in oil prices that now totals a
decline of more than $30 a barrel over the past four weeks. The Labor Department reported slightly
slower growth in worker productivity, with a second quarter gain of just 2.2 percent compared to the 2.7
percent analysts had predicted. The Dow ended the week with a 3.71 percent gain to close at
11,734.32. The S&P rose 2.93 percent to end the week at 1,296.32, and the NASDAQ climbed 4.46
percent to finish the week at 2,414.10.

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.

Holding Pattern – The Federal Reserve voted this week to hold the federal funds rate at 2 percent, its
second no-action vote following seven consecutive cuts aimed at bolstering the flagging economy while
still controlling
inflation. Many economists believe the Fed will leave the rate unchanged for the remainder
of the year, which would hold the commercial bank prime lending rate, on which consumer and business
loans are based, unchanged at 5 percent, its lowest level since 2004.

Different Environment – As the financial security of bond insurers has been scrutinized due to the
nation’s credit difficulties, fewer new municipal debt offerings are being issued with bond insurance. Only
21 percent of new municipal bonds issued in the second quarter 2008 were insured, less than half of the
47 percent of new issues that were insured during the same quarter in 2007 (Source: Thomson Reuters,
Wall Street Journal, BTN Research).   

More Than Most – To rank in the top 1 percent of all U.S. taxpayers, an individual would have to earn
$388,806 of adjusted gross income (Source: IRS, Tax Foundation, BTN Research).  

New Face – The Fed had a new face at its monetary policy meeting last week. Banker Elizabeth Duke
was sworn in as a Federal Reserve governor on Aug. 5. Duke was nominated to complete the term of
Susan Bies, who resigned more than a year ago. Duke’s term expires in January 2012. Duke has been
president of the Virginia Bankers Association and chairman of the American Bankers Association.

Not Much Has Changed – The production of crude oil that occurs in the U.S. today (5.1 million barrels
a day) is the same level of production domestically as it was in 1949 (Source: Department of Energy,
BTN Research).  

WEEKLY FOCUS – Going Global

Friday’s Olympic opening ceremony in Beijing highlighted
the beauty of the diversified peoples and cultures of our
planet. More than 16,000 athletes from more than 200
countries will compete in 302 events in 28 sports. There
will be something for everyone.

Diversification has long been a basic rule of thumb for
Diversification seeks to reduce risk while
maximizing returns by investing in dissimilar asset
classes. It should be noted that this strategy does not
prevent losses from occurring in a down market.

According to, during the late 1990s,
foreign shares accounted for about 30 percent of total
world stock market value. Since then, the foreign total has climbed to about 56 percent, as markets such
as India and Brazil have soared while Wall Street lagged.

So how do you take advantage of the global economy? While something can be said for buying and
supporting the U.S., investing in foreign companies offers the potential to reduce risk by putting money
into economies that may be expanding while the domestic economy contracts, or vice versa. In today’s
markets, opportunities abound for
global investments that target specific countries or a group of

Economies are always shifting and adapting. With the proper balancing and a specific investment
strategy formulated with a financial professional, you can invest in countries across the world and
potentially take advantage of world growth. Call our office for more on using global investing to diversify
your portfolio.

* 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# 285209
Copyright © 2010 The Money All rights reserved.
Returns through 8/8/08
1 Week  
Dow Jones Industrials  
NASDAQ Composite
S&P 500  
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