Market Commentary
For the week of September 7, 2009

The Market
Although the major indexes started the week with losses, investors looked on the bright side of economic
data Thursday and Friday as they headed into a three-day weekend. On Thursday, the International
Council of Shopping Centers and Goldman Sachs reported that retail sales dropped 2 percent in August
compared to a year ago, but the decline was less than the 3.5 percent to 4 percent that analysts had
expected. The Labor Department reported Friday that although the
unemployment rate hit a 26-year high
in August, employer payrolls declined by the smallest amount in a year. For the week, the Dow lost 1.03
percent to close at 9,441.27. The S&P fell 1.17 percent to finish the week at 1,016.40, and the NASDAQ
dropped 0.49 percent to end the week at 2,018.78.

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.

Bull Inside A Bear Over the 33-month period from Sept. 6, 1929, to June 1, 1932, the S&P 500 lost
86.2 percent. But less than 2½ months after the bear market started, the stock index gained 46.8 percent
over a five-month period, before resuming its nearly three-year bear market tumble. The return calculation
was based upon the change of the raw index and does not include the impact of reinvested dividends
(Source: BTN Research).     

Pay It OffTwenty-eight percent of American families headed by a retired person do not pay off their
outstanding credit card balance each month. 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

As Big As It GetsA person born in 1943 is eligible for full Social Security retirement benefits at age
66 or in the year 2009. The maximum retirement check that this individual could receive in 2009 is
$2,323 per month, equal to $27,876 per year (Source: Social Security Administration, BTN Research).  

Stay The Course In the past year, 35 percent of employees have decreased their pre-tax deferral into
401(k) plan, 10 percent have increased their contribution, and the remaining 55 percent have made no
change to their deferral amount (Source: Society for Human Resource Management, BTN Research).  

WEEKLY FOCUS – Should You Rent Your Unsold Home?

In a down economy and depressed housing market, you
may find yourself stuck with an extra home for reasons
you never dreamed of – including having to relocate to
take a job or otherwise losing the ability to pay
mortgages, taxes and upkeep for two properties. A
June report from the National Association of Realtors
showed an 11-month supply of existing homes, thanks
to the $8,000 tax credit for first-time home buyers that is
encouraging building. If you can’t face a year of double
expenses, you might want to consider becoming a

While renting your unused home can help you recoup all
or part of your mortgage and other costs, like any other
investment, it carries risk. You may not be able to find tenants willing to pay what you need to cover your
expenses – again, the
first-time home buyer credit is drawing off some of the higher level rental
prospects. The tenants you do find may fall behind on rent, skip rent or cause property damage.

You will also face a new set of tax consequences, which you should discuss with your accountant,
including losing the IRS capital gains exclusion on the sale of a personal residence. And, your rental
income adds to your adjusted gross income (AGI), which could make a difference in your
tax bracket.
You’ll also need different insurance coverage for the rented property than you did when you lived there

The book, “Becoming A Landlord: Rewards, Risks and Responsibilities,” provides more information on
the pros and cons of becoming a landlord. You can download the book free from Fannie Mae

When you own a second home by circumstances or choice, you need to consider your options. Our office
is happy to work with you – as well as your tax, insurance and real estate professionals – to determine
how renting your extra home fits into your overall financial picture. Call us to arrange a meeting.

* 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# 300019
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Returns through 9/4/09
1 Week  
Dow Jones Industrials  
NASDAQ Composite
S&P 500  
BarCap US Agg Bond (TR)