Market Commentary
For the week of December 21, 2009

The Market
The U.S. dollar made gains against the euro last week, as Standard & Poor’s downgraded Greece’s
credit rating and military conflict between Iran and Iraq prompted a flight to safety according to Reuters.
The Federal Reserve Open Market Committee voted on Wednesday to leave interest rates unchanged
at their near-zero rate. Although Wall Street faces a shortened week – the markets will close at 1 p.m.
EST on Thursday and remain closed Friday for Christmas – low trading volumes could amplify small
moves, creating volatility. In addition, several key economic readings will be released before the holiday,
including revised third-quarter gross domestic product, November existing home sales, and November
personal income and spending numbers. For the week, the Dow lost 1.36 percent to close at 10,328.89.
The S&P fell 0.35 percent to finish at 1,102.47, and the NASDAQ climbed 0.98 percent to end the week
at 2,211.69.










Source: Morningstar.com. *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.

Homes for the HolidaysNew home construction rose in November to an annualized rate of 574,000,
in line with expectations of analysts surveyed by Briefing.com. The rate is 8.9 percent above October.
The number of building permits issued during November increased 6 percent over October to a
seasonally adjusted annualized rate of 584,000.

Partridge Price Decline In its annual calculation of the price tag for all the gifts in “The 12 Days of
Christmas” holiday song, PNC Wealth Management found the cost rose just 0.9 percent to $87,402 if the
giver repeats the gifts for each verse. Without repeats, the bill comes to $21,465, or 1.8 percent more
than last year. The jump in gold prices caused the five rings to increase 43 percent to $499.94, while
declines in the price of birds brought the partridge in the pear tree to $159.99 (down 27.3 percent), the
six geese to $150 (down 37.5 percent) and the seven swans to $5,200 (down 6.3 percent).

Bond BuyersSixteen percent of the corporate bonds outstanding in the U.S. (by dollar) are owned by
life insurance companies (Source: American Council of Life Insurers, BTN Research).  

WEEKLY FOCUS – Turning Vacation and Sick Pay into Retirement Pay

Back in 2002, the IRS issued a private letter ruling
stating employers could allow employees to convert
unused vacation and sick leave pay into contributions to
qualified retirement accounts, such as
401(k)s.
President Obama in September of this year voiced
support for making those conversions easier, and the
IRS followed with two revenue rulings clarifying how
employers can allow employees to turn their time-off
pay into retirement pay.

Allowing such conversions is up to the employer, but a
Sept. 26, 2009, Wall Street Journal article lists some
advantages. The conversion contribution is not subject
to employment taxes and doesn’t increase the
employee’s base pay. Companies can make pay for excess time off a “save only” option, with no
opportunity for a cash payout. Employers can create across-the-board rules for prorating time off into 401
(k) contributions. And employer plan contributions are a tax-deductible business expense.

Any contributions resulting from conversion of unused paid leave would be subject to annual
contribution
limits. Before converting, employees would need to check their amount of regular payroll contributions to
ensure a time-off conversion doesn’t put them over the limit. It remains unclear whether the conversion
contributions will be subject to employer matching. Also, the revenue rulings do not specifically address
IRAs or SIMPLE 401(k)s, so it is unclear whether time-off conversions can be contributed to those plans.

Employers who don’t already offer employees the opportunity to convert unused paid time off into 401(k)
contributions may want to consider it as a way to help employees save for retirement. Employees who
don’t have this benefit may want to approach their company about adding it as an option. And employees
who do have this benefit need to evaluate the impact converting time off may have on their annual
contribution limit.

Whether you are converting unused time off into contributions, making payroll deduction contributions,
considering a
401(k) plan rollover to an IRA or any other move with your retirement savings, we’re always
here to help. Give us a call to discuss your retirement needs or review your current retirement plan to
ensure you are making the most of your available options.

Securities America and its representatives do not offer tax and legal services these services offered in conjunction
with qualified professionals.

* 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# 302191
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Returns through 12/18/09
1 Week  
YTD
1-Year  
3-Year
5-Year
Dow Jones Industrials  
-1.36
21.48
23.97
-3.36
2.01
NASDAQ Composite
0.98
40.24
42.47
-3.16
0.71
S&P 500  
-0.35
24.95
27.66
-6.07
0.48
BarCap US Agg Bond (TR)**
0.12
6.96
7.03
6.29
5.21
MSCI EAFE
-1.75
27.96
25.23
-6.70
3.72