Market Commentary
For the week of September 15, 2008

The Market
Gains in the energy, utilities and materials sectors were dampened last week by speculation about the
fate of Lehman Brothers Holdings Inc., which has been looking for a buyer or other source of cash
infusion. Many had hoped the nation’s fourth largest investment bank would be saved over the weekend,
but Lehman announced today that it had filed for
Chapter 11 bankruptcy. The three major markets all
ended the week higher. The Dow finished 1.83 percent higher to end the week at 11,421.99. The S&P
gained 0.81 percent to close the week at 1,251.70, and the NASDAQ added 0.24 percent to wrap up the
week at 2,261.27.

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.

Still Made Money – In the past 30 calendar years (1978-2007), the S&P 500 has experienced four
different bear markets (i.e., a decline in the index’s value of at least 20 percent). The four bears had
drops of 26 percent, 33 percent, 20 percent and 49 percent. In spite of the tumbles, the S&P 500 has
been up 13.0 percent per year (total return) over the entire 30-year period, even after the negative impact
of the four bear markets (Source: BTN Research).  

I’m Not That Sick – Twenty-two percent of Americans (i.e., two out of every nine) have reduced the
number of doctor visits they are making in order to save money as a result of our slowing economy
(Source: Investment News, NAIC, BTN Research).  

The Dead Rise – On Aug. 13, 1979, BusinessWeek ran a cover story that was titled, “The Death of
Equities.” The S&P 500 gained 17.6 percent per year (total return) in the decade (i.e., 1980-89) following
this sobering assessment of stock valuations (Source: BusinessWeek, BTN Research).      

Only Buy U.S.? – In term of monthly imports, the top six ranked months ever in the history of the U.S.
occurred during the first six months of 2008, peaking with $221 billion of imports that were bought by
American consumers during the month of June. Forty-four percent of Americans believe that our country’
s excessive buying of foreign goods and services in lieu of the purchase of American-made products
has had a significant negative impact on our economy (Source: Commerce Department, Pew Research
Center, BTN Research).   

Pretty Close To Average – The U.S. economy grew by 3.3 percent in the second quarter 2008 (quarter-
over-quarter growth expressed as an annualized rate). The average growth rate for the economy over the
past 50 years (i.e., 200 quarters) is 3.4 percent (Source: Commerce Department, BTN Research).  

WEEKLY FOCUS – Working Longer Before Retiring

A recent study by MetLife Mature Market Institute found
that 55 percent of adult Americans believe that living
too long is the biggest risk to their retirement success –
with good reason. The McKinsey Global Institute, in its
recent report “Talkin’ ‘Bout My Generation: The
Economic Impact of Aging U.S. Baby Boomers,”
estimated that two-thirds of early boomer households
(currently aged 54-63) are financially unprepared for

When the Social Security retirement age of 65 was
enacted in 1932, the average mortality age for a man
was 64 – meaning half of American men weren’t
expected to even live until retirement. Consider that
today, the average age of retirement is 63, the Social Security retirement age has risen to 67 (for those
born after 1960) and yet average mortality age for a 65-year-old is 85. We’ve gone from half of
Americans not accessing
Social Security at all to half of 65-year-olds living another 20 years.

The McKinsey report, along with other research studies, recommends a relatively simple solution to help
more Americans retire with sufficient funds: working a few more years. With retirement lasting longer, it
makes sense that the working years last longer as well. Working longer not only results in the ability to
save more, but it increases the number of years (and presumably higher paying years) upon which your
Social Security benefits are based. If, instead of applying for Social Security at the earliest age of 62,
you wait until age 65, you will receive 25 percent more in benefits. If you don’t apply until age 70, you
more than double the benefit versus age 62.

In addition, if you participate in an employee pension plan or a
401k plan with an employer match,
working a few more years increases your employer’s contribution to your retirement kitty. And since
Medicare isn’t available until age 65, retiring at that age or later eliminates the need for higher-cost
health insurance in between.

Early retirement became a common goal and something of a status symbol with boomers. But working a
few more years can help ensure you retain that retirement status, instead of taking a low-paying job to
make ends meet. Call our office for a full discussion of how delaying retirement in the short term can pay
off in the long term.

* 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# 287145
Copyright © 2010 The Money All rights reserved.
Returns through 9/12/08
1 Week  
Dow Jones Industrials  
NASDAQ Composite
S&P 500  
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