Seasons Greeting from Schnack Financial

All of us at Schnack Financial Group want to take this opportunity to wish you a joyous Holiday Season and a Happy New Year.




Click Link below for your Holiday Greeting...
Wishing You Blessings

Randy Schnack, MA

President/CEO 

Carrie Aguilar

Executive Assistant for Relationships

 

Bob Dame, MBA, MA

Vice President-College Planning

 

Henry Becker, JD

Vice President-Wealth Preservation

Willie Mack, PhD

Vice President-Educational Planning

Market Week: December 21, 2009

The Markets

Investors seemed to abandon their recent preference for the Dow in favor of small caps as well as the Nasdaq, which hit a new year-to-date high. Meanwhile, the S&P 500 continued to hug the 1100 mark. The dollar once again rallied, which didn't help foreign stocks, commodities, or gold. The greenback ended the week at $1.44 to the euro, its best level in more than three months.

Market/Index	2008 Close	Prior Week	As of 12/18/09	Week Change	YTD Change
DJIA	8776.39	10471.50	10328.89	-1.36%	17.69%
NASDAQ	1577.03	2190.31	2211.69	.98%	40.24%
S&P 500	903.25	1106.41	1102.47	-.36%	22.06%
Russell 2000	499.45	600.37	610.57	1.70%	22.25%
Global Dow	1526.21	1963.49	1934.82	-1.46%	26.77%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	2.24%	3.54%	3.55%	1 bps	131 bps

Last Week's Headlines

• Inflation at the wholesale level heated up in November. Higher energy costs helped push the Producer Price Index up 1.8% from the month before. That's dramatically higher than October's 0.3% increase or September's 0.6% decrease. Prices for crude goods--raw materials that require further processing--jumped 5.7%.
• Energy costs also were the culprit in higher consumer inflation, which rose 0.4% in November. The 12-month inflation rate now stands at 1.8%; that's the first annualized increase since February. However, not including food and energy, prices were flat.
• Citigroup and Wells Fargo became the last of the major banks to announce plans to repay their TARP loans. That would bring to $161 billion the amount repaid so far from the $245 billion loaned to roughly 700 financial institutions. The U.S. Treasury then postponed plans to sell part of its 34% share of Citigroup; the new issuance coupled with a large government sale would have meant taking a loss on the government's shares.
• Standard and Poor's became the second credit ratings agency to downgrade the government bonds of Greece, whose debt is estimated to be roughly 12% of its gross domestic product. The resulting anxiety about Eurozone bonds in general gave additional support to a strengthening dollar.
• New home construction was up almost 9% in November from the previous month. That's quite a change from October's nearly 10% drop in the face of the scheduled expiration of the first-time homebuyer's tax credit, which was subsequently extended.
• It's status quo at the Federal Reserve Board. The Senate Banking Committee gave Chairman Ben Bernanke the okay for a new term. And even though the Fed acknowledged some encouraging economic signals, interest rates will continue to remain low for "an extended period."

Eye on the Week Ahead

Heading into the holidays, investors will keep an eye on the dollar, which in recent months has tended to behave inversely from stocks. They'll also be watching to see if stocks can break out of their recent trading range. Meanwhile, institutional investors will be tweaking their portfolios over the next two weeks in anticipation of year's end.

Key data releases: Q3 final GDP, home resales (12/22); personal income/spending, new home sales (12/23); durable goods orders (12/24).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.


The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.3


--see disclaimer below--

Market Week: December 14, 2009

The Markets

Equities markets bounced around within a recent trading range, ending the week only fractions of a point higher or lower than they started. The Dow once again outpaced other domestic indexes for the week. As the dollar exhibited renewed strength, gold continued to come back down to earth and oil fell beneath $70 a barrel. Light bidding at last week's Treasury auctions--not unusual for the post-Thanksgiving period--sent Treasury yields up.

Market/Index	2008 Close	Prior Week	As of 12/11/09	Week Change	YTD Change
DJIA	8776.39	10388.90	10471.50	.80%	19.31%
NASDAQ	1577.03	2194.35	2190.31	-.18%	38.89%
S&P 500	903.25	1105.98	1106.41	.04%	22.49%
Russell 2000	499.45	602.79	600.37	-.40%	20.21%
Global Dow	1526.21	1978.67	1963.49	-.77%	28.65%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	2.24%	3.48%	3.54%	6 bps	130 bps

Last Week's Headlines

• Consumer credit fell in October for the ninth straight month. Revolving credit, such as credit cards, fell at an annualized rate of 9.3%, while nonrevolving credit, such as car and student loans, rose at a 2.6% annual rate. Compared to last October, non-real-estate consumer debt is down 3.6%.
• U.S. exports rose faster than imports in October, narrowing the trade deficit by 7.6% to $32.94 billion. Exports rose 2.6%, the most in almost a year.
• Treasury Secretary Timothy Geithner announced that the $700 billion TARP bank bailout program, which had been scheduled to end this year, will be extended through October 3, 2010. It's now expected to cost $500 billion, though President Obama proposed that some of that $200 billion be used to stimulate lending to small businesses, help finance infrastructure projects and business tax credits, and assist state and local governments.
• The Government Accountability Office estimated that taxpayers will lose $30.4 billion instead of $43.7 billion on the GM and Chrysler bailouts, and $30.4 billion instead of $31.5 billion on the AIG bailout.
• Time Warner's spinoff of AOL completed AOL's decade-long round trip from online powerhouse to megamerger partner to solo act once again.
• November retail sales were up 1.3% from the previous month (however, October's increase was revised down from 1.4% to 1.1%). Though rising gas prices played a part in the higher number, sales of autos and other retail goods also rose.
• October business inventories rose 0.2%--the steepest increase since August of last year--though they're still down 12.6% from a year ago.
• Abu Dhabi announced it will provide $10 billion to help Dubai's state-run investment conglomerate avoid defaulting on its debt.

Eye on the Week Ahead

The last Fed meeting of the year will be watched for any smoke signals that might indicate when the "extended period" of low interest rates might come to an end; Wednesday's announcement will coincide with the latest inflation numbers. There could be volatility leading up to Friday's quadruple witching options expiration.

Key data releases: Wholesale inflation, industrial production (12/15); consumer inflation, housing starts, FOMC announcement (12/16); quadruple witching options expiration (12/18).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

--see disclaimer below--

Market Week: December 7, 2009

An unexpectedly good employment figure helped equities leap to fresh year-long highs on Friday. Despite giving back much of that gain by the end of the day, stocks still ended the week in positive territory. The unemployment report also fueled speculation about the timing of a future interest rate hike, which helped strengthen the dollar and hit prices for Treasury bonds, gold, and commodities.

Market/Index	2008 Close	Prior Week	As of 12/4/09	Week Change	YTD Change
DJIA	8776.39	10309.92	10388.90	.77%	18.37%
NASDAQ	1577.03	2138.44	2194.35	2.61%	39.14%
S&P 500	903.25	1091.49	1105.98	1.33%	22.44%
Russell 2000	499.45	577.23	602.79	4.43%	20.69%
Global Dow	1526.21	1925.70	1978.67	2.75%	29.65%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	2.24%	3.21%	3.48%	27 bps	124 bps

Last Week's Headlines

• Job losses not only slowed, but practically came to a standstill. Only 11,000 jobs were cut from nonfarm payrolls in November; that's less than a tenth of the 135,000 average figure during the previous three months and far below the 190,000 jobs lost in October. The drop from 10.2% to 10% is the biggest drop in the unemployment number since September 2006. Temp jobs, often an indicator of employment to come, also were up. However, the number of people unemployed for more than 27 weeks rose by 2.7% to 38.3%.
• Though U.S. manufacturing continued to expand in November, it did so at a slightly slower pace than the month before. The Institute for Supply Management's index fell to 53.6 from 55.7 (anything over 50 indicates expansion). However, ISM's index for the services sector saw shrinkage, dropping to 48.7% in November--back in contraction territory after 2 months of expansion.
• Pending home sales rose for the ninth month in a row, according to the National Association of Realtors; the figure was up by 3.7%.
• In the third quarter, business productivity saw its largest gain in 6 years, increasing at an annual rate of 8.1%. Hours worked declined by 4.8%, while output rose 2.9%.
• October construction spending was flat compared to the month before. Residential construction was up 4.4%, offsetting a decline of 2.5% in nonresidential spending. Since last October, construction spending is down 14.4% on average.
• The National Retail Federation reported that Black Friday shoppers were plentiful but cheap. There were more people in the stores than last year, but the average shopper spent less.
• Bank of America announced plans to repay the $45 billion it borrowed as part of the TARP program.

Eye on the Week Ahead
With both credit usage and retail sales reports on tap, consumer spending behavior will be watched. The Copenhagen conference on global climate change begins.
Key data releases: Consumer credit (10/7); International trade, Treasury budget (12/10); retail sales, import/export prices, business inventories (12/11).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

--see disclaimer below--

Common Incapacity Documents -- Medicare, Medigap, and Medicaid

THIS IS THE THIRD IN A SERIES OF ARTICLES THAT WE'LL BE POSTING DISCUSSING TOPICS RELATING TO INCAPACITY.

COMMON DOCUMENTS

Durable Power of Attorney for Health Care (DPAHC)/Health-Care Proxy
Advantages	Disadvantages
Is flexible--allows your representative to act on your behalf and make medical decisions based on current circumstances Generally, your representative can make any decision you would be allowed to make Generally can be used any time you become incompetent	Not practical in an emergency--your representative must be present to act on your behalf Not permitted in some states
Living Will
Advantages	Disadvantages
Allows you to convey decisions regarding your medical care without relying on any one person to carry out your wishes	Generally can be used only if you are terminally injured or ill, or in a persistent vegetative state Generally used only to make decisions regarding life-sustaining treatments Emergency medical personnel generally cannot withhold emergency care based on a living will Not permitted in some states
Do Not Resuscitate (DNR) Order
Advantages	Disadvantages
Allows you to decline CPR if your heart or breathing fails Effective in an emergency--your doctor should note an in-hospital DNR order on your chart. Out-of-hospital DNR orders take various forms, depending on the laws of your state. ID bracelets, MedicAlert® necklaces, and wallet cards are some methods of noting DNR status.	Some states allow DNR orders only for hospitalized patients--others do not restrict eligibility Only used to decline CPR in case of cardiac or respiratory arrest Not permitted in some states
Durable Power of Attorney (DPOA)
Advantages	Disadvantages
You control who acts and what they can do with your property Low cost to implement Decreases the chance of court intervention	Some states do not permit a "springing" DPOA (i.e., a DPOA that is effective only after you have become incapacitated)

Medicare, Medigap, and Medicaid

Medicare	Medigap	Medicaid
What is it?	Federal health insurance program for Social Security recipients. Parts A and B comprise the original Medicare program. Medicare Advantage (also referred to as Part C) plans are also available in some areas. They provide managed care and fee-for-service options through private insurers.	Medicare supplement insurance issued by private companies. Typically, individuals who have Medicare Advantage would not need a Medigap plan.	Joint federal-state need-based health insurance program. Eligibility requirements and covered services vary from state to state.
What does it cover?	All or some portion of: Part A: Hospital and skilled nursing facilities, home health agency care, hospice care, inpatient psychiatric care, and blood transfusions. Part B: Doctors, outpatient mental health services, therapy, part-time skilled home health care, certain preventative services, and other medical services. Part C: All the benefits offered by the original Medicare plan. Some offer added benefits such as prescription drugs, eye exams, and hearing aids. Part D: Prescription drug coverage (optional).	All or some portion of: Medical care not covered by Medicare, deductibles, co-payments, and coinsurance; plans may also cover other services such as eye and dental exams.	All or some portion of: A broad range of medical services including inpatient and outpatient hospital care, prescription drugs, nursing home care, and skilled care.
Who is eligible?	Generally, persons age 65 or older, and those with certain disabilities or diseases are eligible for Medicare Parts A and B. Anyone eligible for Parts A and B is eligible for Part C and Part D.	Individuals who are enrolled in Medicare Parts A and B.	Individuals who have limited income and resources and who meet other eligibility requirements.
What is the cost?	Part A: Most participants don't pay for this coverage because of prior Social Security covered employment. Part B: $96.40 monthly premium, $135 annual deductible; $133.50 daily co-pay for skilled nursing care for days 21-100 (in 2009). Part C: Varies by insurer, state, and plan. Part D: Varies by insurer, state, and plan.	Premiums vary by company, region, and plan. There are generally 12 available plans (A-L), each offering different levels of coverage. Not all plans are available in every state.	No premium. Deductibles vary from state to state.
What does it take to enroll?	If you are receiving Social Security or Railroad Retirement benefits (or are applying for benefits) at or prior to age 65, you will be automatically enrolled in Part A and Part B. Contact the Social Security Administration to enroll if: You will not receive Social Security or Railroad Retirement benefits at age 65 You want to enroll in Medicare Part C You want to apply for benefits prior to age 65 due to a covered medical condition	Purchase a policy from an insurance company. You can find information on Medigap policies offered in your area by visiting the Medicare website or calling (800) 633-4227.	Application procedures vary from state to state. For information, contact the agency responsible for administering Medicaid in your state.

Medicaid Eligibility for Nursing Home Care

The Medicaid program is the largest single payer of nursing home bills in America, and is the payer of last resort for those who do not have the resources to pay for their own care.

Medicaid eligibility rules are complicated and differ from state to state. It is important to get the advice of an experienced Medicaid planning professional before applying for Medicaid benefits. Because the Medicaid rules require an applicant's finances to be reviewed as far back as five years before the application date, now is the time to get advice if there may be a need for Medicaid benefits in the future.

To qualify for Medicaid nursing home coverage, an applicant must meet three eligibility tests.

• Category test: Applicants must be at least one of the following: age 65 or older, disabled, or blind.
• Income test: In "spend-down" states, the applicant must spend his or her monthly income (minus a small personal needs allowance) on medical or nursing home expenses.
In "income-cap" states, a spend down of income is not allowed. Income of even $1 over the monthly income amount allowed by the state will disqualify an applicant from receiving Medicaid (although planning opportunities may exist to allow eligibility under certain conditions).
• Asset test: The applicant is allowed to own only minimal assets (generally $2,000 for an individual, $3,000 for a married couple if both are applying), but certain assets are exempt from this calculation. Exempt assets (such as certain prepaid burial contracts) may be purchased to reduce the applicant's assets below the allowable figure. Certain transfers (such as limited transfers to a spouse who is not covered by Medicaid, transfers to a disabled child, etc.) are also allowed to reduce the applicant's assets.

PART FOUR -- Next Wednesday's article is "Housing Options for Loved Ones" and "Tips for Caregivers"

--See Disclaimer Below--

Market Week: November 30, 2009

The Markets

When U.S. investors were slicing up turkey, most European markets were slicing off 3% or more on unsettling news from Dubai. After hitting their highest levels in over a year earlier in the week, U.S. markets fell in response when they reopened for a half-day Friday; the almost 1.5% drop in the Dow wiped out all of the week's gains. However, the recent rotation into large-cap stocks continued as the small-cap Russell 2000 took the biggest hit for the week while the S&P 500 ended the week where it began.

Market/Index	2008 Close	Prior Week	As of 11/27/09	Week Change	YTD Change
DJIA	8776.39	10318.16	10309.92	-.08%	17.47%
NASDAQ	1577.03	2146.04	2138.44	-.35%	35.6%
S&P 500	903.25	1091.38	1091.49	0.01%	20.84%
Russell 2000	499.45	584.68	577.23	-1.27%	15.57%
Global Dow	1526.21	1935.54	1925.70	-.51%	26.18%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	2.24%	3.36%	3.21%	-.15 bps	.97 bps

Last Week's Headlines

• Homebuyers rushing to beat the deadline for the first-time homebuyers tax credit (before it was extended) helped push October home resales up by 10.1% from the previous month, to a level not seen since February 2007, according to the National Association of Realtors. If October's pace kept up for a full year, it would represent the sale of 6.1 million existing homes. Distressed properties, which accounted for 30% of October resales, continued to weigh on the median home resale price, which at $173,100 was down 7.1% from last October.
• Overseas markets were hardly thankful for the Thanksgiving Day news that state-run Dubai World plans to restructure and wants to delay payments on $60 billion worth of debt for six months. The announcement raised questions about bank exposure to derivatives based on that debt as well as potential problems with other sovereign debt, particularly in emerging markets.
• Personal incomes rose in October by 0.2%--the fourth consecutive month of increases. Spending also increased 0.7% from the month before, though the month-to-month comparison is affected by the substantial drop in September's spending that resulted from the end of the "cash for clunkers" program.
• The 3.5% growth rate initially reported for the third quarter by the Commerce Department was revised downward to 2.8%, though it's still the strongest in two years.
• October durable goods orders were down 0.6%, primarily because of weaker demand for machinery and defense equipment.
• The dollar hit a 15-month low against the euro and a 14-month low against the Japanese yen before jitters over Dubai led global investors to begin unwinding riskier currency bets, bolstering both currencies a bit. The spot gold price continued to hit new records, reaching $1,194.50 an ounce on Thursday before falling back.
• New U.S. home sales were up 6.2% from September, and up 5.1% from a year ago. The South saw the highest jump, with a 23.2% increase.

Eye on the Week Ahead

Traders returning to their desks will be trying to figure out whether the negative sentiment at week's end will carry over, and whether that would represent a bad omen for global credit stability or a buying opportunity. Friday's unemployment figures will be watched for their implications for the holiday shopping season.

Key data releases: Auto and pending home sales, manufacturing (12/1); productivity (12/3); unemployment/payrolls (12/4).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

--see disclaimer below--

The Markets

Despite a nice pop early in the week, discouraging earnings from a couple of computer bellwether companies and a key analyst downgrade of chipmakers raised concerns about the tech sector generally and took down the Nasdaq by week's end. (A boost in the dollar also didn't help.) The S&P couldn't quite hold on to the 1100 mark, but the Dow remained in positive territory for the third week in a row.

Market/Index	2008 Close	Prior Week	As of 11/20/09	Week Change	YTD Change
DJIA	8776.39	10270.47	10318.16	.46%	17.57%
NASDAQ	1577.03	2167.88	2146.04	-1.01%	36.08%
S&P 500	903.25	1093.48	1091.38	-.19%	20.83%
Russell 2000	499.45	586.28	584.68	-.27%	17.06%
Global Dow	1526.21	1950.46	1935.54	-.76%	26.82%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	2.24%	3.43%	3.36%	-7 bps	112 bps

Last Week's Headlines

• October retail sales were higher than expected--up 1.4% from the previous month--but September's decline was worse than previously thought (-2.3% instead of -1.5%).
• Higher food and energy prices pushed wholesale inflation up 0.3% in October. However, so-called core inflation at the wholesale level saw its biggest decline in 3 years; it was down by 0.6%. Energy also was responsible for a 0.3% increase in inflation at the retail level in October. Cars contributed to the increase; prices for used cars and new cars were up 3.4% and 1.6% respectively. On an annual basis, consumer inflation is down 0.2%, though core inflation, which excludes energy and food, is up 1.2%.
• Industrial production continued to rise in October, though at a much slower pace than the previous three months. Cooler weather pushed up output at utility companies by 1.6%, which accounted for almost all of the 0.1% increase in overall industrial production. Factory output contracted by 0.1%.
• After four months of staying level, housing starts fell 10.6% in October--the biggest decline since January. That put new residential construction almost 31% below last year's level. Building permits fell 4% during the month.
• Six of the ten leading economic indicators measured by the Conference Board were up in October, resulting in a 0.3% increase in that index (its seventh consecutive gain). The positive factors were interest rate spreads, stock prices, jobless claims, hours worked in manufacturing, money supply, and new orders for consumer goods.
• The Mortgage Bankers' Association said a record 14.41% of home loans were either behind at least one payment or were in foreclosure during the third quarter--the highest level since the survey began in 1972. Of foreclosures begun in the third quarter, 33% were on prime fixed-rate loans. Florida, California, Arizona, and Nevada continued to have more than 40% of all foreclosures.
• Hoping to mute public outcries over its proposed employee bonuses, Goldman Sachs announced it will contribute $500 million to provide business education and capital for small businesses.

Eye on the Week Ahead

Shopping may be the key to a holiday-abbreviated trading week as investors devour reports on existing and new home sales, consumer spending, and the retailers' most important holiday of the year, Black Friday.

Key data releases: Home resales (11/23); Q3 GDP (revised estimate), home prices (11/24); durable goods orders, personal income/spending, new home sales (11/25).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

--see disclaimer below--

The Worker, Homeownership, and Business Assistance Act of 2009

On November 6, 2009, President Obama signed into law the Worker, Homeownership, and Business Assistance Act of 2009 (the "Act"). The Act provides up to an additional 14 weeks in benefits to unemployed individuals. An extra 6 weeks of benefits is available to individuals in states with unemployment levels over 8.5 percent. The legislation also includes the following provisions:

First-time homebuyer credit

The Act extends and modifies the first-time homebuyer tax credit. Specifically, the Act:

• Extends the first-time homebuyer credit to principal residences purchased before May 1, 2010. The credit is extended to principal residences purchased before July 1, 2010 if a written binding contract is entered into prior to May 1, 2010.
• Increases the income limits that apply to the credit. For the purchase of a principal residence after November 6, 2009 the credit is reduced if modified adjusted gross income (MAGI) exceeds $125,000 ($225,000 if married filing a joint return) and is completely eliminated if MAGI reaches $145,000 ($245,000 if married filing a joint return).
• Establishes a new limitation: effective for purchases made after November 6, 2009, the first-time homebuyer credit is not available if the purchase price of a principal residence exceeds $800,000.
• Expands eligibility (purchases made after November 6, 2009) by allowing some existing homeowners to qualify for the credit when they purchase a new principal residence. Specifically, an individual (and, if married, the individual's spouse) who has maintained the same principal residence for at least five consecutive years in the eight-year period ending on the date that a subsequent principal residence is purchased, will be considered a first-time homebuyer for purposes of the credit. In such a case, the maximum amount of the credit is $6,500 ($3,250 for a married individual filing separately).

For purposes of the credit, in the case of a purchase of a principal residence after December 31, 2008, a taxpayer may elect to treat the purchase as if it were made on December 31 of the calendar year preceding the purchase for purposes of claiming the credit on the prior year's tax return. This means qualifying purchases in 2009 can be treated as if they were made on December 31, 2008, and qualifying purchases in 2010 can be treated as if they were made on December 31, 2009.

The Act also imposes additional new limitations on purchases made after November 6, 2009:

• No credit is allowed unless the taxpayer is 18 years of age as of the date of purchase. A taxpayer who is married is treated as meeting the age requirement if the taxpayer or the taxpayer's spouse meets the age requirement.
• The definition of purchase excludes property acquired from a person related to the person acquiring such property or the spouse of the person acquiring the property, if married.
• No credit is allowed to any taxpayer if the taxpayer is a dependent of another taxpayer.

For tax years ending after November 6, 2009, no credit is allowed unless the taxpayer attaches to the relevant tax return a properly executed copy of the settlement statement used to complete the purchase.

The Act also includes special provisions for members of the uniformed services and others who receive government orders for qualified official extended duty service. These provisions include extended time to claim the credit.

Five-year carryback of net operating losses

The American Recovery and Reinvestment Act of 2009 allowed eligible small businesses to elect to extend the general two-year net operating loss (NOL) carryback period for 2008 net operating losses to three, four, or five years. An eligible small business was defined as a taxpayer meeting a maximum $15,000,000 gross receipts test. The provision applied to an eligible taxpayer's NOL for any taxable year ending in 2008, or if elected by the taxpayer, the NOL for any taxable year beginning in 2008. However, the election was allowed only with respect to one taxable year.

The Worker, Homeownership, and Business Assistance Act of 2009 provides for an election similar in nature to the NOL carryback provision in the American Recovery and Reinvestment Act:

• Businesses may elect to extend the general two-year NOL carryback period to three, four, or five years. The election is not limited to businesses that meet a specified gross receipts test.
• The election can be used for an NOL for a taxable year beginning or ending in either 2008 or 2009. The election can be used for only one year, however.
• Under the terms of the election, NOLs carried back five years would be able to offset up to 50 percent of the taxable income from the fifth year, but could offset all of the income from the other carryback years.
• Eligible small businesses that elected to carry back 2008 net operating losses under the provisions of the American Recovery and Reinvestment Act of 2009 can still elect to carry back a 2009 NOL under the provisions of this Act.

The Act specifically excludes certain taxpayers. For example, a business in which the Federal government acquired an equity interest pursuant to the Emergency Economic Stabilization Act of 2008 is not eligible for the election.

--see disclaimer below--

Market Week: November 16, 2009

The Markets

After rising 500 points over six days and hitting a level not seen since the day after last year's vice presidential debate, the Dow slipped a bit but still managed to stay above 10,000. The S&P 500 once again bumped its head against the 1100 mark, but couldn't quite break through.

Market/Index	2008 Close	Prior Week	As of 11/13/09	Week Change	YTD Change
DJIA	8776.39	10023.42	10270.47	2.46%	17.02%
NASDAQ	1577.03	2112.44	2167.88	2.62%	37.47%
S&P 500	903.25	1069.30	1093.48	2.26%	21.06%
Russell 2000	499.45	580.35	586.28	1.02%	17.39%
Global Dow	1526.21	1903.30	1950.46	2.48%	27.80%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	2.24%	3.50%	3.43%	-7 bps	119 bps

Last Week's Headlines

• An October Federal Reserve Board survey of bank lending officers showed that overall, credit continues to tighten for both small businesses and households. Approximately 45% of the banks surveyed reported making fewer commercial and industrial loans. And roughly half said that between now and February, they expect to reduce credit limits, raise required minimum credit scores, and/or increase annual fees for prime borrowers (for nonprime borrowers, the percentage planning such steps was even higher).
• U.S. exports rose 2.9% in September, but imports rose twice as much. The U.S. trade deficit, now $36.5 billion, is 18.2% higher than in August, and the trade deficit with China alone is at a year-long high.
• In other deficit-related news, President Obama and Treasury Secretary Geithner both worked overtime to try to reassure Asian nations that the U.S. recognizes the global need for a strong dollar and will work to reduce the trade deficit as the economy begins to recover.
• The European Union's economy followed that of the U.S. in growing during the third quarter. The 0.4% growth was the first positive figure since the first quarter of 2008.
• The Reuters/University of Michigan survey of consumer confidence hit its lowest level in three months, dropping from 70.6 in October to 66. And unfortunately, respondents' expectations for their prospects a year from now weren't much better. In October, the consumer expectations reading was 81; in November, it fell to 67--the lowest level since April.

Eye on the Week Ahead

October retail sales may suggest what's in store for the holiday shopping season. Investors will keep a watchful eye on inflation data, and options expirations at week's end could bring volatility.

Key data releases: Retail sales (11/16); wholesale inflation, industrial production (11/17); consumer inflation, housing starts (11/18); leading economic indicators (11/19).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

--see disclaimer below--

College Board Releases New College Cost Numbers

College cost trends

Every October, the College Board releases its Trends in College Pricing report that highlights college cost increases and trends. While costs can vary significantly by region and individual college, the College Board publishes average cost figures, which are based on its survey of 3,500 colleges across the country.

Here are highlights from its latest report:

• At four-year public colleges for in-state students, tuition, fees, and room and board increased by 5.9% from last year, with the total cost for 2009/2010 averaging $19,388
• At four-year public colleges for out-of-state students, tuition, fees, and room and board increased by 6.0% from last year, with the total cost for 2009/2010 averaging $30,196
• At four-year private colleges, tuition, fees, and room and board increased by 4.3% from last year, with the total cost for 2009/2010 averaging $39,028

“Total average cost” includes tuition and fees, room and board, books and supplies, transportation, and a small amount for miscellaneous expenses.

To read the Trends in College Pricing report, visit www.trends-collegeboard.com.

Student aid trends

The College Board is quick to point out that the average "sticker price" cost figure is not necessarily representative of what most students pay. That's because almost two-thirds of undergraduate students receive grants that reduce the actual price of college. The largest provider of grant aid is individual colleges, followed by the federal government, private sources and employers, and state governments.

For the 2009/2010 year, the College Board estimates that students at public colleges will receive an average of $5,400 in grant aid from all sources and federal tax benefits, and students at private colleges will receive an average of $14,400 in grant aid from all sources and federal tax benefits. Federal tax benefits include the American Opportunity tax credit (formerly called the Hope credit), the Lifetime Learning tax credit, and the deduction for qualified higher education expenses.

Every year, the College Board also releases a sister report to Trends in College Pricing, called Trends in Student Aid, that examines student financial aid in more detail. To read this report, visit www.trends-collegeboard.com.

Market Week: November 2, 2009

The Markets

The nightmare before Halloween: The last week of October once again spooked the equities markets (though not nearly on the scale of, say, the last week of October 80 years ago, when the Dow lost more than 12% two days in a row). A strong rally Thursday prompted by a positive GDP report halted a string of down days but was followed by an even stronger slide Friday in the wake of weak consumer spending numbers. The small-cap Russell 2000 lost more than 3% on Friday alone, and the other major indexes weren't far behind. Ouch.

Market/Index	2008 Close	Prior Week	As of 10/30/09	Week Change	YTD Change
DJIA	8776.39	9972.18	9712.73	-2.60%	10.67%
NASDAQ	1577.03	2154.47	2045.11	-5.08%	29.68%
S&P 500	903.25	1079.60	1036.19	-4.02%	14.72%
Russell 2000	499.45	600.86	562.77	-6.34%	12.68%
Global Dow	1526.21	1940.90	1860.13	-4.16%	21.88%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	2.24%	3.48%	3.39%	-9 bps	115 bps

Last Week's Headlines

• Preliminary estimates of third-quarter gross domestic product (GDP) turned positive for the first time in a year. That could mean a turning point for the longest recession since the Depression era, though no official call would be made for some time. The Bureau of Economic Analysis said the U.S. economy grew at an annual rate of 3.5%. Contributing to the increase were consumer and government spending, exports, improved inventory levels, and more residential investment.
• Consumer spending fell 0.5% in September after "cash for clunkers" expired in late August, while incomes remained flat.
• U.S. home prices rose in August for the fourth straight month. Though still 29.3% down from its peak, the S&P/Case-Shiller index of prices in 20 leading cities was up by 1.2% from July, with only 3 cities experiencing declines.
• The Conference Board's measure of consumer confidence in October fell to its lowest level in 26 years. The job market played a major role in the second decline in a row. However, the pulse-takers must have been talking to different consumers than the Reuters/University of Michigan crew, which found that consumer sentiment rose during the month.
• The Federal Reserve Board's program of buying Treasury bonds, launched to support the bond markets in the wake of last year's financial crisis, came to an end.
• Durable goods orders rose 1% in September, and existing inventories fell for the ninth month in a row.
• For the first time in six months, new home sales fell 3.6% in September. The median sales price of $204,800 is 9.1% lower than last September.
• CIT Group, a major lender to small and mid-sized businesses, filed for Chapter 11 bankruptcy.

Eye on the Week Ahead

Investors will try to assess whether the last two weeks are an indicator of things to come, or a needed correction that could bring out those who sat out the seven-month rally and now are looking to get back in. We'll learn Friday whether unemployment has reached 10%, as is anticipated at some point. A possible Congressional extension and expansion of the homebuyer's tax credit could be significant, and the Fed's Wednesday announcement will be parsed for clues about when a future interest rate hike might be in the cards.

Key data releases: Manufacturing, car sales, pending home sales (11/2); Federal Reserve Board announcement (11/4); unemployment/payrolls (11/6).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

--see disclaimer below--

Market Week: October 26, 2009

The Markets

Many companies last week managed to generate enthusiasm by beating earnings estimates--in some cases resoundingly--but new highs for the year also brought out profit-takers. After surpassing the 10,000 mark last week, the Dow zigzagged around that level before finally wilting below it by week's end. Small caps lost the most, while blow-out reports from some Nasdaq bellwethers helped keep it from sliding as much as the other major U.S. indexes.

Market/Index	2008 Close	Prior Week	As of 10/23/09	Week Change	YTD Change
DJIA	8776.39	9995.91	9972.18	-.24%	13.63%
NASDAQ	1577.03	2156.80	2154.47	-.11%	36.62%
S&P 500	903.25	1087.68	1079.60	-.74%	19.52%
Russell 2000	499.45	616.18	600.86	-2.49%	20.30%
Global Dow	1526.21	1940.20	1940.90	.04%	27.17%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	2.24%	3.42%	3.48%	6 bps	124 bps

Last Week's Headlines

• New housing starts rose slightly in September, but permits for new construction fell 1.2%. Both are still roughly 28% below last year's figures.
• Driven largely by a 2.4% drop in energy prices, inflation at the wholesale level was down 0.6% in September from the previous month. That means wholesale prices have fallen 4.8% in the last year, though core inflation, which excludes food and energy, is up 1.8% since last September.
• The Conference Board's index of leading economic indicators saw its sixth straight month of improvements, rising 1% in September. The six-month increase is the strongest since 1983. Average workweeks and building permits were the only two negative components of the index.
• The looming expiration of the first-time homebuyer tax credit helped push sales of existing homes to their highest levels in two years, according to the National Association of Realtors (NAR). Resales rose 9.4% during September after falling in August, and were up 9.2% from last September. And the preliminary results of a separate NAR survey showed that almost half of sales were first-time home buyers. The bad news? Of those transactions, 29% were distressed properties.
• Oil hit a new one-year high on reports that, despite weak demand, oil inventories were building less rapidly than expected. The euro traded above $1.50 for the first time in 14 months.
• The federal government took steps to restrict executive compensation at seven large companies that have received taxpayer assistance, and the Federal Reserve Board proposed tighter regulatory supervision of pay packages that might encourage risky banking practices.
• A tale of two economies: Chinese officials forecast that third-quarter growth figures due Thursday would accelerate to 9% from the previous quarter's 7.9%. However, the UK's economy shrank 0.4% in the third quarter (5.2% from a year ago).

Eye on the Week Ahead

Thursday's U.S. GDP figure will be closely watched to see if it manages to turn the corner and show growth. However, earnings reports will continue to be scrutinized for clues about whether current stock prices have already anticipated potential future good news.

Key data releases: Home prices, consumer confidence (10/27); durable goods, new home sales (10/28); Q3 gross domestic product (10/29); personal income and spending (10/30).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

--see disclaimer below--

Caring for an Aging Parent

THIS IS THE SECOND IN A SERIES OF ARTICLES THAT WE'LL BE POSTING DISCUSSING TOPICS RELATING TO INCAPACITY.

Caring for your aging parents is something you hope you can handle when the time comes, but it's the last thing you want to think about. Whether the time is now or somewhere down the road, there are steps that you can take to make your life (and theirs) a little easier. Some people live their entire lives with little or no assistance from family and friends, but today Americans are living longer than ever before. It's always better to be prepared.

Mom? Dad? We need to talk

The first step you need to take is talking to your parents. Find out what their needs and wishes are. In some cases, however, they may be unwilling or unable to talk about their future. This can happen for a number of reasons, including:

• Incapacity
• Fear of becoming dependent
• Resentment toward you for interfering
• Reluctance to burden you with their problems

If such is the case with your parents, you may need to do as much planning as you can without them. If their safety or health is in danger, however, you may need to step in as caregiver. The bottom line is that you need to have a plan. If you're nervous about talking to your parents, make a list of topics that you need to discuss. That way, you'll be less likely to forget anything. Here are some things that you may need to talk about:

• Long-term care insurance: Do they have it? If not, should they buy it?
• Living arrangements: Can they still live alone, or is it time to explore other options?
• Medical care decisions: What are their wishes, and who will carry them out?
• Financial planning: How can you protect their assets?
• Estate planning: Do they have all of the necessary documents (e.g., wills, trusts)?
• Expectations: What do you expect from your parents, and what do they expect from you?

Preparing a personal data record

Once you've opened the lines of communication, your next step is to prepare a personal data record. This document lists information that you might need in case your parents become incapacitated or die. Here's some information that should be included:

• Financial information: Bank accounts, investment accounts, real estate holdings
• Legal information: Wills, durable power of attorneys, health-care directives
• Funeral and burial plans: Prepayment information, final wishes
• Medical information: Health-care providers, medication, medical history
• Insurance information: Policy numbers, company names
• Advisor information: Names and phone numbers of any professional service providers
• Location of other important records: Keys to safe-deposit boxes, real estate deeds

Be sure to write down the location of documents and any relevant account numbers. It's a good idea to make copies of all of the documents you've gathered and keep them in a safe place. This is especially important if you live far away, because you'll want the information readily available in the event of an emergency.

Where will your parents live?

If your parents are like many older folks, where they live will depend on how healthy they are. As your parents grow older, their health may deteriorate so much that they can no longer live on their own. At this point, you may need to find them in-home health care or health care within a retirement community or nursing home. Or, you may insist that they come to live with you. If money is an issue, moving in with you may be the best (or only) option, but you'll want to give this decision serious thought. This decision will impact your entire family, so talk about it as a family first. A lot of help is out there, including friends and extended family. Don't be afraid to ask.

Evaluating your parents' abilities

If you're concerned about your parents' mental or physical capabilities, ask their doctor(s) to recommend a facility for a geriatric assessment. These assessments can be done at hospitals or clinics. The evaluation determines your parents' capabilities for day-to-day activities (e.g., cooking, housework, personal hygiene, taking medications, making phone calls). The facility can then refer you and your parents to organizations that provide support.

If you can't be there to care for your parents, or if you just need some guidance to oversee your parents' care, a geriatric care manager (GCM) can also help. Typically, GCMs are nurses or social workers with experience in geriatric care. They can assess your parents' ability to live on their own, coordinate round-the-clock care if necessary, or recommend home health care and other agencies that can help your parents remain independent.

Get support and advice

Don't try to care for your parents alone. Many local and national caregiver support groups and community services are available to help you cope with caring for your aging parents. If you don't know where to find help, contact your state's department of eldercare services. Or, call (800) 677-1116 to reach the Eldercare Locator, an information and referral service sponsored by the federal government that can direct you to resources available nationally or in your area. Some of the services available in your community may include:

• Caregiver support groups and training
• Adult day care
• Respite care
• Guidelines on how to choose a nursing home
• Free or low-cost legal advice

Once you've gathered all of the necessary information, you may find some gaps. Perhaps your mother doesn't have a health-care directive, or her will is outdated. You may wish to consult an attorney or other financial professional whose advice both you and your parents can trust.

PART THREE -- Next Wednesday's article is "Common Incapacity Documents" and "Medicare, Medigap, and Medicaid"

--See Disclaimer Below--