Weekly Commentary
July 21, 2008
The Markets
It was a market of extremes last week.
First, the extreme bad news. On
Tuesday, the Dow Jones Industrial Average closed below 11,000 for the first
time in two years, according to Bloomberg. That same day, Fannie Mae and
Freddie Mac, the largest
Now, the good news—investors’ memories can be short! Starting on Wednesday of last week, the Dow rose a total of 4.9% over three days, which was its biggest three-day gain since March 2003, according to Barron’s. Better than expected earnings from Wells Fargo, JP Morgan, and Citigroup helped fuel the rally, according to MarketWatch. And, speaking of fuel, oil prices declined more than $16 per barrel last week and that helped give support to the markets, according to MarketWatch.
The midweek rally was also boosted by news from the Securities and Exchange Commission on Tuesday that it was placing new temporary restrictions on short-selling the stock of 19 financial companies. This new rule is designed to relieve some of the downward pressure on companies such as Fannie Mae, Freddie Mac, Bank of America, Merrill Lynch, Citigroup, and Lehman Brothers, according to MarketWatch. This is not a recommendation to buy or sell any of these stocks, but it is worth noting that all 19 of the stocks on this list rose in value from Tuesday through the close of trading last Friday, according to the Wall Street Journal.
When the dust settled last week, the Dow was up a much welcome 3.6%. With all the extreme action last week, it will be interesting to look back six months to a year from now and see if last week was a turning point or just another crazy week in this unpredictable market.
|
Returns
through 7/18/08 |
1-Week |
Y-T-D |
1-Year |
3-Year |
5-Year |
10-Year |
|
Dow Jones Industrials |
3.6 |
-13.3 |
-17.0 |
2.8 |
4.6 |
2.1 |
|
NASDAQ Composite |
2.0 |
-13.9 |
-15.1 |
2.1 |
6.0 |
1.3 |
|
Standard & Poor's
500 |
1.7 |
-14.1 |
-17.8 |
1.1 |
4.9 |
0.6 |
Sources: Yahoo! Finance,
Barron’s. Past performance is no guarantee of future results. Indices are unmanaged and cannot be
invested into directly.
Three-, Five-, and 10-year returns are annualized. Assumes dividends are not reinvested.
SO WHAT ARE YOUR THOUGHTS on the concept of retirement? A recent
study by Charles Schwab and AgeWave titled, “Rethinking Retirement: Four
American Generations Share Their Views on Life’s Third Act,” reached the
following conclusions:
·
Fifty-two
percent of respondents see retirement as an opportunity for a new, exciting
chapter in life.
·
Seventy-one
percent of pre-retirees said they want to work in retirement and the most
popular reason for working in retirement was to stay mentally active.
·
Three
in five said they would like to move to a completely different line of work
when they retire.
·
Slightly
more than half of the respondents said they want to focus on their own needs
and interests in retirement while 45% said they want to focus on giving back to
family and community.
·
Forty
percent said they anticipate providing financial support to their parents at
some point in the future and 25% think they’ll have to support a sibling.
It appears that
the very concept of retirement is changing. With people’s lifespan increasing,
the idea of working for 40 years then retiring to golf and a rocking chair is
pretty much gone. Today, many retirees are relatively young and in good health.
Rather than relaxing, they want to pursue dormant passions and engage in more
meaningful work—even if it means receiving little pay.
Whether you’re
approaching retirement or in retirement, we’re happy to talk to you about how
to make your golden years truly “golden.”
Weekly Focus
– The Pursuit of Happiness
The Declaration
of Independence says the pursuit of happiness is an inalienable right. Well,
the writers of that document are on to something. Science is now telling us
that instead of our happiness being stuck at some inborn level, we can actually
take actions that will positively affect our happiness level and keep it at a
high level for a long time. In her new book, The How of Happiness: A Scientific Approach to Getting the Life You
Want, professor Sonja Lyubomirsky says about 50% of our happiness is
genetically set and 10% is based on our life circumstances. That means a
significant 40% is up for grabs. All we have to do is adopt the behaviors of
happy people. And, without further suspense, here are some of those behaviors:
·
Practice
gratitude
·
Be
optimistic
·
Nurture
relationships
·
Commit
to goals
·
Develop
coping strategies
·
Learn
to forgive
·
Be
physically active
Happiness may
take work, but the results will outweigh the effort.
Best regards,
John F. Reutemann, Jr., CLU, CFP®
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Securities offered through LPL Financial,
Member FINRA/SIPC.
* 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.
* The 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.
*Yahoo! Finance is the source for any
reference to the performance of an index between two specific periods.
*
Opinions expressed are subject to change without notice and are not intended as
investment advice or to predict future performance.
*
Consult your financial professional before making any investment decision.
*
You cannot invest directly in an index.
*
Past performance does not guarantee future results. mc101507
MC101507
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