Market Commentary
For the week of August 31, 2009

The Market
The major markets ended the week nearly flat after marking gains early in the week. The Commerce
Department’s report on personal spending showed a slight increase, but personal income remained
unchanged. The weak reading on the University of Michigan consumer sentiment index also dampened
the rally. The Dow gained 0.44 percent to finish the week at 9,544.20. The S&P rose 0.31 percent to end
the week at 1,028.93, and the NASDAQ rose 0.39 percent to close the week at 2,028.77. Beginning this
week, we will be including the results for the Barclays Capital Aggregate Bond Index, an unmanaged
index comprised of U.S. investment grade, fixed-rate bond market securities, including government,
government agency, corporate and mortgage-backed securities between one and 10 years.

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.

Light in the Layoff Tunnel The Labor Department reported Thursday that the number of new
unemployment claims fell for the week ending Aug. 22, as did the total number of Americans receiving
unemployment. The four-week average, which smoothes large increases or declines, also fell, to
566,250 – about 90,000 below a peak for this recession reached in early April.

Barack Bets on Bernanke President Obama last week nominated Ben Bernanke to a second four-
year term as chairman of the Federal Reserve. The nomination is subject to Senate confirmation.

Clunkers Fuel Spending U.S. consumer spending rose 0.2 percent in July, fueled by the Cash for
Clunkers program. The increase matched analysts’ predictions. Household income, however, remained
unchanged against expectations of a 0.2 percent increase. The personal savings rate dropped slightly in
July from 4.5 percent to 4.2 percent, but is still well ahead of the 2.6 percent savings rate of a year ago.

Top One Percent To rank in the top 1 percent of all U.S. taxpayers required an adjusted gross income
(AGI) level of at least $410,000 based upon calendar year 2007 tax data. This group earned 23 percent
of all AGI nationwide and paid 40 percent of all
federal income tax in the country (Source: Internal
Revenue Service, Tax Foundation, BTN Research).  

WEEKLY FOCUS – Charitable Crunch

When consumers begin to feel a crunch in their budgets,
they often reduce or eliminate charitable contributions.
Many nonprofits, particularly smaller organizations, have
reported declines in 2009 donations.

Picking and choosing among your favorite charities can
be difficult. Here are some tips for weighing which
nonprofits to continue to support and which to at least

  • Prioritize: Chances are some of the charities you support have greater importance to you than
    others. Create a list of all the groups you donate to and rank them. Then decide how many you can
    continue to support.
  • Bang for your buck: Consider where your dollar does the most good, both long term and short
    term. You may want to continue supporting groups with an immediate need and making larger
    donations to groups with a long-term goal when you can again afford it.
  • Go local: While large national organizations can accomplish great things with pooled resources, in
    the short-term you may decide that local causes come first, particularly if you are in an area directly
    impacted by a natural disaster or other situation, like the loss of a major employer.
  • Time versus money: If you decide you can no longer donate cash, consider donating your time or
    doing pro bono work for an organization. They may be paying for services that you can provide free.
  • Get specific: Fund a project with immediate and visible results, like a drive to restock the local
    food bank.
  • Donate goods: Cut some coupons, scan the grocery circulars and purchase items for a food
    pantry, homeless shelter or other group. Don’t forget these organizations often need personal
    hygiene items and infant products like diapers and wipes.

If you can’t live with eliminating one or more charities from your donation roster, consider a percentage
decrease across the board. And remember that this situation will be temporary. When the economy
begins to gain forward momentum, you can increase your charitable donations to previous levels – or
possibly higher. If you need assistance obtaining financial information on a charity or if you need to re-
examine your own situation to determine what you can afford to give, please feel free to call our office.
We can also work with your tax advisor to help you and your favorite causes get the most benefit from
your donations and bequests.

* 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. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment grade,
fixed rate bond market securities, including government, government agency, corporate and mortgage-backed
securities between one and 10 years. Written by Securities America. SAI# 299880
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Returns through 8/28/09
1 Week  
Dow Jones Industrials  
NASDAQ Composite
S&P 500  
BarCap US Agg Bond (TR)