Market Commentary
For the week of November 2, 2009

The Market
A strong gross domestic product (GDP) report on Thursday gave the markets their strongest single-day
rally in three months, only to have declines in consumer spending and sentiment negate them on Friday.
The GDP grew at a 3.5 percent annual rate in the third quarter, compared to a drop of 0.7 percent in the
second quarter. Consumer spending fell 0.5 percent in September, the first decline in five months and
the largest drop in nine. That compares to a 1.4 percent increase in August. The Dow ended the month
unchanged, while the S&P dropped 2 percent, and the NASDAQ fell 3.6 percent. For the week, the Dow
ended down 2.60 percent to close at 9,712.73. The S&P fell 4.00 percent to finish the week at 1,036.19,
while the NASDAQ dropped 5.08 percent to end the week at 2,045.11.

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.

In Stocks The average 401k participant had 56 percent of his/her retirement dollars invested in the
stock market as of Dec. 31, 2008 (Source: Employee Benefit Research Institute, BTN Research).  

Another Impact The increase in job losses nationwide has led thousands of laid off Americans in their
60s to apply for early
Social Security retirement benefits. The likelihood of a high unemployment rate in
the near future has prompted the government to project a Social Security deficit for both 2010 ($10
billion) and 2011 ($9 billion). The last year in which Social Security paid out more than they took in was
1983 ($2 billion deficit). Social Security receipts exceeded expenditures by $179 billion in 2008 (Source:
Social Security Administration, BTN Research).   

Consumer Credit Drops The total amount of consumer credit outstanding (e.g., credit cards, auto
loans) has decreased in each of the past seven months, falling by $102 billion over the period (Source:
Federal Reserve, BTN Research).    

This MonthNovember has been the third best performing month for the S&P 500 since 1990. Only
December and May (both up 1.9 percent on average on a total return basis) have bested November’s
1.5 percent average gain. The S&P 500 is an unmanaged index of 500 widely held stocks that is
generally considered representative of the U.S. stock market (Source: BTN Research).  

WEEKLY FOCUS – Traditional IRAs Still Have a Place

Roth IRAs have received a great deal of attention lately
because in 2010, the
Roth IRA conversion income limits
for rolling a Traditional IRA to a Roth IRA are repealed.
Traditional IRAs may still have a place in your portfolio,
however, particularly if your income prohibits you from
making new Roth contributions.

According to the IRS website,, your ability to
deduct contributions to a Traditional IRA depends on your
modified adjusted gross income (AGI), your filing status
and whether you are covered by an employer retirement
plan. For 2009, the modified AGI limits have increased,
although the
IRA contribution limit remains the same --
$5,000 for individuals younger than 50, and $6,000 for
those 50 and over (the amount may be less if you have earned income below $5,000). For those covered
by an employer retirement plan, married couples filing jointly and qualifying widow(er)s will see that
amount begin to phase out when modified AGI hits $89,000 and disappear completely at $109,000. For
a single individual or head of household, the phase out begins at $55,000, and those with modified AGI
over $65,000 cannot make a contribution.

If you are not covered by an employer retirement plan, there is no modified AGI limit for those filing as
single, head of household or qualifying widow(er) – you may deduct the full amount up to your contribution
limit. Married couples filing jointly can have modified AGI up to $166,000 and still deduct the full
contribution. Beyond that amount, the
deductible IRA amount begins to phase out, disappearing at
$176,000 or more in modified AGI. Regardless of income or employer plan, you cannot make an
contribution after age 70 ½.

Even if you cannot deduct the full amount of your IRA contribution, taxable contributions may still have a
place in your overall investment plan. We can work closely with your tax professional to help you
determine the most appropriate combination of investment vehicles for your retirement dollars. We
encourage you to call our office to schedule a thorough joint review. Although you have until April 15,
2010, to make IRA contributions and claim them for the 2009 tax year, starting now will allow ample time
to execute any changes in your investments. Call our office today!

* 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# 301165
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Returns through 10/30/09
1 Week  
Dow Jones Industrials  
NASDAQ Composite
S&P 500  
BarCap US Agg Bond (TR)