March Newsletter

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	The First-Time Homebuyer Tax Credit  Recent changes to the first-time homebuyer tax credit mean you might be able to benefit from the credit, even if you're not actually a first-time homebuyer. To take advantage of the credit, however, you have to act by May 1.
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529 College Savings Plans vs. Roth IRAs After the 2008/2009 market collapse, some parents have opted to trade the tax benefits of 529 plans for savings vehicles that don't have a "must-be-used-for-college" restriction. Just how does a favorite of the college savings world, a 529 college savings plan, stack up to a favorite of the retirement savings world, a Roth IRA, as an education-funding vehicle?

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	10 Financial Terms Everyone Should Know Understanding financial matters can be difficult because of the jargon used. Becoming familiar with these ten financial terms may help make your financial picture clearer.
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Ask the Experts: How do I unwind my QPRT?  Real estate transferred to a qualified personal residence trust (QPRT) may have experienced less than anticipated appreciation or even depreciation. Consequently, one of the purposes of the QPRT--removing future appreciation from an estate--may go unachieved. Some in this position may be inclined to "unwind" (undo) the QPRT. That, however, may not be the best option.

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	Ask the Experts: My QPRT has terminated. What do I do now? If the grantor outlives the term of a QPRT, the residence passes to the remainder beneficiaries. At this time, several things need to happen. Here's a quick checklist.
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Recent Changes and Items Worth Noting

Special rules apply to charitable donations for Haiti relief efforts

If you make a qualified charitable contribution after January 11, 2010, and before March 1, 2010, for relief efforts associated with the January 12, 2010, earthquake in Haiti, you can treat the contribution as if it were made on December 31, 2009. As a result, if you itemize deductions on Form 1040, Schedule A, you can elect to claim the deduction for the Haitian relief contribution on your 2009 federal income tax return. To qualify, the contribution must be made in cash. To facilitate charitable donations made via text messages, a telephone bill showing the name of the organization, and the date and amount of the contribution, will satisfy charitable deduction recordkeeping requirements.

Time running out for first-time homebuyer's tax credit

If you're in the market for a new home and hope to take advantage of the first-time homebuyer tax credit, you'll need to purchase a principal residence before May 1, 2010 (or before July 1, 2010 if you enter into a written binding contract prior to May 1, 2010). If you--and your spouse, if you're married--did not own any other principal residence during the three-year period ending on the date of purchase, the credit is worth up to $8,000 ($4,000 if you're married and file separate returns). If you--and your spouse, if you're married--have maintained the same principal residence for at least five consecutive years in the eight-year period ending at the time you purchase a new principal residence, the credit is worth up to $6,500 ($3,250 if you're married and file separate returns).

The credit is reduced if your modified adjusted gross income (MAGI) exceeds $125,000 ($225,000 if married filing a joint return) and is completely eliminated if your MAGI reaches $145,000 ($245,000 if married filing a joint return). You can't claim the first-time homebuyer tax credit if the purchase price of your principal residence exceeds $800,000. Other limitations and provisions also apply.

President's proposed 2011 budget offers Congress multiple initiatives

The proposed 2011 budget submitted by President Obama offers multiple new initiatives, including several small business tax incentives, provisions intended to promote college affordability, and tax benefits targeting the middle class. The budget that ultimately emerges from Congress will likely differ significantly from that proposed by the President, but the proposed budget is valuable in that it provides a framework for discussion over the next few months. The proposed budget includes:

• For businesses -- A new tax credit of $5,000 for each new hire made by an employer, a one-year extension of 2009 bonus depreciation and Section 179 expensing limits, and requirements for employers who do not offer retirement plans to implement automatic IRAs for employees
• For students -- Expanded Pell Grant limits, a permanent American Opportunity tax credit, and a proposal to strengthen income-based repayment plans for student loans (overburdened borrowers would pay only 10% of discretionary income in loan payments and remaining debt would be forgiven after 20 years)
• For individual taxpayers -- A return of the top two marginal tax rates to 39.6% and 36% in 2011, and an expanded 28% tax bracket; a permanent extension of the current 0% and 15% rates on long-term capital gain, with a new 20% rate for higher-income individuals; permanent extension of the federal estate tax and the alternative minimum tax (AMT) rules and exemption amounts, at 2009 levels

New credit card provisions effective this week

The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 included several provisions that became effective on February 22, 2010. Some of these changes could affect you:

• Credit card companies are prohibited from increasing annual percentage rates (APRs) that apply to existing balances unless (1) the index on which the rate is based changes, (2) the APR was a promotional rate that has expired, (3) you failed to comply with a hardship workout plan, or (4) you're more than 60 days past due on the account; if an increase in APR is the result of you falling 60 days past due on the account, the rate will be restored to what it was before the increase if you make timely minimum payments for six months
• If different APRs apply to separate portions of an outstanding balance, the amount of any payment beyond the minimum payment due must be applied to the portion of the balance with the highest APR
• If you're under age 21, you won't be able to get credit unless you have a cosigner over age 21 or can demonstrate an ability to repay the debt
• You can't be charged an over-the-limit fee unless you authorize the credit card company to complete the transaction that causes the balance to exceed your credit limit

Signs of uneven recovery pressure stocks - For the week ended February 26, 2010

Since I was traveling last weekend to Detroit, I didn't get this information out until just now.

U.S. economic news

Signs of an uneven recovery were evident this week as the labor market struggled to rebound
The U.S. economy grew more than initially reported in the fourth quarter of 2009. GDP expanded 5.9%, more than the 5.7% first reported, thanks to stronger business investment and a greater contribution from inventories, which added 3.88 percentage points to GDP. The quarterly growth rate was the most that the economy has experienced in six years. Investment in software and equipment grew at the fastest pace in almost a decade. However, the report showed consumer spending, which accounts for 70% of the economy, remained constrained by the high unemployment rate. Reports this week showed first-time unemployment claims unexpectedly rose last week.

U.S. consumer confidence fell more than expected in February, to the lowest level since April 2009. The Conference Board’s confidence index dropped to 46 from 56.5 in January as the outlook for jobs deteriorated. Concerns about the economy and labor market pushed the current conditions portion of the index to its lowest level in 27 years. The report indicated that a lack of job growth and impaired household finances could restrain consumer spending. Without sustained growth in this largest part of the economy the recovery may be slow to gain momentum.

The National Association of Realtors reported sales of previously owned homes unexpectedly declined for a second month in January. The drop is seen as an indication that the effect of the government's extension of the tax credit has been limited by a lack of job growth. Purchases fell 7.2%, the second-largest decline ever.
Home prices rose in December for the seventh month in a row, according to the S&P/Case-Shiller home-price index, which showed that home prices in 20 cities rose 0.3% after falling 3.1% in December. Case-Shiller also reported that sales of new homes in the United States unexpectedly fell in January to the lowest level on record. Purchases declined 11% despite the extension of a government tax credit.

U.S. and global corporate news

AIG reports losses; India's Tata Motors and John Deere post profits
American International Group posted a wider-than-expected fourth-quarter loss on charges tied to paying down its bailout debt and boosting commercial insurance reserves.
Coca-Cola, the world’s largest maker of soda, agreed to buy the North American operations of bottler Coca-Cola Enterprises in a deal valued at $12.3 billion. The agreement comes six months after PepsiCo brought its bottlers in-house to cut costs.
Tata Motors, India’s biggest auto maker by revenue, reported a $140.3 million profit for the third quarter thanks to a rebound in sales of its Jaguar and Land Rover models.
John Deere, the world’s largest maker of farm equipment, posted a first-quarter profit that topped analysts’ estimates, and the firm also raised its 2010 forecast.

Global economic news

E.U. pushes Greece to adopt tougher measures to cut deficit
The Wall Street Journal reported that the European Union pushed Greece to adopt new austerity measures to help the country slash its budget deficit four percentage points this year. Pressure has been mounting on Greece as officials from the E.U., International Monetary Fund, and European Central Bank have, since the beginning of the week, been meeting in Athens to evaluate Greece’s progress in cutting its budget deficit. Meanwhile Greece postponed plans to sell a minimum of $2 billion in global bonds in the United States and Asia.

Eurozone confidence falls
European confidence in the economic outlook unexpectedly worsened in February after the eurozone’s recovery almost stalled in the fourth quarter.

U.K. economy expands faster than expected; India’s economy hurt by dry weather
The U.K. economy reemerged from recession at a faster pace than initially reported in the fourth quarter amid a jump in services output. GDP rose 0.3% in the third quarter, more than the 0.1% reported earlier.
India’s expansion slowed in the fourth quarter after a dry monsoon season hurt farm output. GDP grew 6% from a year earlier after gaining 7.9% in the previous quarter. The government said the drop is a one-off and not reflective of a trend.
Japan’s consumer prices fell for an eleventh month, a trend that increased pressure on the government and central bank to take measures to eradicate deflation, which is hampering the country's recovery.

Stay focused and diversified
In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk. Diversification does not guarantee a profit or protect against loss.

The views expressed here are those of MFS^®and are subject to change at any time. These views should not be relied upon as investment advice, as securities recommendations, or as an indication of trading intent on behalf of any MFS investment product. Individual securities mentioned are for illustrative purposes only and may not be relied upon as investment advice or as an indication of trading intent on behalf of any MFS product.

Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report.

Past performance is no guarantee of future results.

Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; Financial Times; boston.com.

--see disclaimer below--

Market Week: March 1, 2010

The Markets

Stocks struggled to stay afloat during a week of largely disappointing economic data. The small-cap Russell 2000 was the only major index left in positive territory for the year. Doubts about European debt continued to plague international equities. That helped drive increased interest in U.S. Treasury bonds, whose prices rose as yields fell.

Market/Index	2009 Close	Prior Week	As of 2/26	Week Change	YTD Change
DJIA	10428.05	10402.35	10325.26	-.74%	-.99%
NASDAQ	2269.15	2243.87	2238.26	-.25%	-1.36%
S&P 500	1115.10	1109.17	1104.49	-.42%	-.95%
Russell 2000	625.39	631.62	628.56	-.48%	.51%
Global Dow	1984.48	1893.58	1891.56	-.11%	-4.68%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	3.85%	3.78%	3.61%	-17 bps	-24 bps

Last Week's Headlines

• New home sales plunged 11.2% in January compared to December and were down 6.1% from January 2009. Though revisions and statistical errors can distort the numbers from month to month, it's the third consecutive monthly decline, and the lowest monthly level of new home sales since the Commerce Department began keeping records in 1963. Sales of existing homes also fell 7.2% in January.
• Gross Domestic Product in Q4 2009 actually grew 0.2% more than the original estimate of 5.7%.
• The SEC voted to adopt an alternative uptick rule, which would curb short selling in a stock once it has fallen 10% in intraday trading. The new rule, which will go into effect 60 days after publication in the Federal Register, requires that once that circuit breaker has been tripped, any short sales for the rest of that day and the next must be executed at a price above the current highest national bid. However, the SEC stopped short of reinstating the original rule, which required all short sales to take place on an uptick.
• Home prices in the 20 cities tracked by the S&P/Case-Shiller index fell 0.2% in December, and were down 3.1% from a year earlier.
• After three straight months of increases, the Conference Board's measure of consumer confidence dropped sharply in February, falling from 56.5 to 46.0--its lowest level since last April.
• Orders for civilian aircraft, which more than doubled in January, pushed up the month's durable goods orders by 3%, the biggest increase since July. However, excluding transportation, orders fell 0.6%.
• Bond rating services threatened further downgrades of their ratings for Greek sovereign debt. The financially troubled country is struggling to balance the need for budget cuts with public protests against them.

Eye on the Week Ahead
Bond investors will be watching an auction of 10-year bonds in Greece in light of the threatened rating downgrade. Friday's unemployment numbers are likely to once again be key.

Key data releases: Personal income/spending, manufacturing, construction spending (3/1); pending home sales, productivity (3/4); unemployment/nonfarm payrolls (3/5).

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--

Obama Proposes Changes to Education Act

United Press International via Yellowbrix via FastWeb.com

February 22, 2010

New steps to better prepare U.S. students for college and the workplace were outlined by U.S. President Barack Obama Monday during a meeting with governors.

“America’s prosperity has always rested on how well we educate our children — but never more so than today,” Obama told state chief executives visiting the White House. “This is true for our workers, when a college graduate earns over 60 percent more in a lifetime than a high school graduate. This is true for our businesses, when according to one study; six in 10 say they simply can’t find qualified people to fill open positions.”

Obama called for a redesigned Elementary and Secondary Education Act that would include ways to help states implement college- and career-ready standards through improved teacher preparation and development and upgraded classroom instruction.

The administration proposed:

• Requiring states to adopt and certify that they have college- and career-ready standards in reading and mathematics as a qualifying condition for Title I funding.
• Including new funding priorities for states with college- and career-ready standards in place as they compete for federal dollars to improve teaching and learning, and upgrade curriculum in reading and math.
• Encouraging states, school districts and other institutions to better align teacher-preparation practices and programs.
• Supporting expansion of the Race to the Top competition, beyond stimulus funding, by dedicating $1.35 billion in awards to states and school districts.
• Supporting professional development for teachers, leaders and other school instructional staff.

Many of Obama’s recommendations are in his budget request for fiscal year 2011 or in specific programs.

--see disclaimer below--

Market Week: February 22, 2010

The Markets

A three-day run in which the Dow rose an average of almost 100 points a day gave domestic equities a 3% increase for the shortened holiday week, though the Nasdaq lagged the other major indexes. Small caps returned to positive territory for the year, but global equities continued to suffer from uncertainty about the impact of sovereign debt problems abroad. Spreads between yields on short-term and longer-dated Treasury bonds widened briefly after the Federal Reserve upped its discount interest rate (see below).

Market/Index	2009 Close	Prior Week	As of 2/19	Week Change	YTD Change
DJIA	10428.05	10099.14	10402.35	3%	-.25%
NASDAQ	2269.15	2183.53	2243.87	2.76%	-1.11%
S&P 500	1115.10	1075.51	1109.17	3.13%	-.53%
Russell 2000	625.39	610.72	631.62	3.42%	1%
Global Dow	1984.48	1857.02	1893.58	1.97%	-4.58%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	3.85%	3.69%	3.78%	9 bps	-7 bps

Last Week's Headlines

• The Federal Reserve Board raised by a quarter percent the interest rate it charges banks for short-term emergency loans. Increasing the discount rate from 0.5% to 0.75% was one of the steps Chairman Ben Bernanke had outlined the week before as part of an "exit strategy" from various types of support the Fed undertook to combat the credit crisis. Though the timing--between meetings--came as a surprise, the Fed reiterated its intention to keep monetary policy "accommodative."
• Consumer inflation ticked up 0.2% in January, putting the annual inflation rate for the last 12 months at 2.6%. Energy costs--primarily gas prices--were responsible for most of the increase. Not counting food and energy, consumer prices fell 0.1% in January (though medical care costs saw their largest increase in a year).
• Inflation at the wholesale level--often considered an indicator of what might be in store for consumers later--was up 1.4% in January, putting the annual rate at 4.6%. It was the third consecutive month in which the rate for the previous 12 months rose. Prices for crude goods were up 9.6% in January, primarily because of higher costs for energy-related raw materials such as petroleum.
• Housing starts in January rose 2.8% from the month before, and were up 21.1% from last January. Building permits were down almost 5% from December, but were still up almost 17% from the same time last year.

Eye on the Week Ahead
Friday will see the first update to the most recent Gross Domestic Product (GDP) number; a substantial revision downward could affect the markets. Housing-related data will be a continuing thread throughout the week. Investors also will be watching to see if Senate Banking Committee Chairman Christopher Dodd unveils a proposed financial regulatory reform package this week.

Key data releases: Home prices (2/23); new-home sales (2/24); durable goods orders (2/25); revised Q4 GDP, home resales (2/26).

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--

U.S. economic news

Gauge of economic activity shows modest gain
The Conference Board said its index of leading economic indicators, a forecast of future economic activity, rose 0.3% in January. The increase is lower than both the 1.2% increase reported in December and November’s 1.1% gain. January’s figure was below the 0.5% gain expected by economists polled by Thomson Reuters.


Industrial production, factory output increase
The Fed reported that U.S. industrial production rose 0.9% in January, the seventh-straight monthly increase. Output at factories, mines, and utilities increased 0.9% in January after a 0.7% increase the prior month. Economists forecast industrial production would increase 0.7%, the median of 78 projections in a Bloomberg News survey.


Homebuilder confidence edges up
An industry measure of U.S. homebuilder confidence rose in February from a seven-month low in January, but remained at a level that signals lingering concern. The National Association of Home Builders said its housing-market index, a measure of builder attitudes regarding prospects for selling single-family homes, rose two points to 17 in February, still well below the threshold level of 50. A reading of 50 or above indicates that more builders view sales conditions positively than negatively.


New jobless claims unexpectedly rise
The U.S. Department of Labor said the number of newly laid-off workers filing claims for unemployment benefits surprisingly rose to 473,000 in the week ended February 13. The figure represents an increase from the previous week of 31,000 jobless. A consensus estimate of economists surveyed by Briefing.com had forecast that jobless claims would fall to 438,000.

U.S. and global corporate news

Mergers and acquisitions update
General Growth Properties, the number-two mall owner in the United States, rejected Simon Property Group's $10 billion takeover bid. In a letter declining the world's largest shopping-mall operator's offer, General Growth said "our objective is to maximize value for the company and its stakeholders, and we are engaging in a process that is intended to accomplish that result in an expeditious manner." Simon’s takeover would have significantly changed the mall landscape throughout the United States. General Growth is in the process of trying to emerge from bankruptcy protection.


Walgreen agreed to buy Duane Reade from Oak Hill Capital Partners for $1.08 billion, including assumed debt. The purchase will make Walgreen, which is the biggest U.S. drugstore chain, the market leader in New York City. Walgreen, which expects to finalize the deal by the end of August, will retain the chain name.


Earnings roundup
Barclays said its annual profit more than doubled, a sign that the bank's purchase of Lehman Brothers' North American assets in September 2008 has begun to see results. Barclays posted a 9.39 billion pound net profit for 2009, up from net of 4.38 billion pounds a year earlier. The figures include a 6.33 billion pound gain from the sale of nearly 80% of its Barclays Global Investors to asset manager BlackRock.


Merck, which completed a $41-billion acquisition of Schering-Plough in early November, reported that its fourth-quarter profit increased to $6.49 billion from $1.64 billion a year earlier. To generate promised cost savings, the drug maker also announced plans to lay off 15% of its global work force, nearly 15,000 employees, by the end of 2012.


Kraft Foods reported that its fourth-quarter profit more than tripled amid strong sales in developing markets, moderating commodity prices, and efforts to reduce costs. Profit for the food maker jumped to $710 million for the period ended December 31, 2009, up from $178 million a year earlier.

For the quarter ended January 30, 2010, Abercrombie & Fitch recorded a profit of $47.5 million, down 31% from the $68.4 million the teen clothing retailer posted a year earlier. Revenue decreased 4.6% to $936 million. The retailer, which has struggled as its customers have turned to lower-priced competitors, said 2010 will be a year of improvement.


Whole Foods’ fiscal first-quarter earnings jumped 79% as sales at stores open at least one year rose for the first time in six quarters. The retailer posted a profit of $49.7 million, compared with $27.8 million a year ago, a sign that discounts and a refocus on natural foods are paying off.

Global economic news


OECD countries show expansion
The Organization for Economic Cooperation and Development (OECD) released figures that indicated economic output in its 30 members was 0.8% higher during the fourth quarter of 2009 than in the third quarter. The increase came despite a slowdown in growth in Europe, with the 27-member European Union recording 0.1% growth in the fourth quarter following a 0.3% expansion in the previous quarter. OECD members account for 61.3% of the world’s gross domestic product.


Greece exploring bond sale; EU gives country one-month deadline
Following reports suggesting that Greece used currency swaps and other instruments to lower the amount of debt reported on its government balance sheet, fellow eurozone countries have given the country one month to balance its budget. European Union countries want to avoid a bailout of Greece unless absolutely necessary. While Greece’s Finance Minister George Papaconstantinou said the country is ahead of its own deficit-reduction targets and will not require a bailout from the EU, the country's government is set to launch a nearly $7 billion bond offering to raise money quickly.

Stay focused and diversified
In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk. Diversification does not guarantee a profit or protect against loss.

The views expressed here are those of MFS^®and are subject to change at any time. These views should not be relied upon as investment advice, as securities recommendations, or as an indication of trading intent on behalf of any MFS investment product. Individual securities mentioned are for illustrative purposes only and may not be relied upon as investment advice or as an indication of trading intent on behalf of any MFS product.

Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report.


Past performance is no guarantee of future results.

Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; Financial Times; boston.com.

--see disclaimer below--

Financial Planning: Helping You See the Big Picture

	Financial Planning: Helping You See the Big Picture
	View the Flash Client Alert > --see disclaimer below--

Market Week: February 15, 2010

The Markets

After an encouraging start, domestic equities resumed their recent losing ways. Small caps and international stocks led the indexes downward--the Dow dropped 268 points on Thursday alone--as domestic equities edged closer to the 10% decline from recent levels that is typically considered the hallmark of a correction. The Russell 2000 is now down about 8.6% from its January 19 high; the Nasdaq has fallen about 7.7% in the same time.

Market/Index	2009 Close	Prior Week	As of 2/5	Week Change	YTD Change
DJIA	10428.05	10067.33	10012.23	-.55%	-3.99%
NASDAQ	2269.15	2147.35	2141.12	-.29%	-5.64%
S&P 500	1115.10	1073.87	1066.19	-.72%	-4.39%
Russell 2000	625.39	602.04	592.98	-1.50%	-5.18%
Global Dow	1984.48	1882.49	1835.66	-2.49%	-7.50%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	3.85%	3.63%	3.59%	-4 bps	-26 bps

Last Week's Headlines

• Mixed messages: The unemployment rate actually fell--that's right, FELL--in January to 9.7%. That's the lowest rate since August, and the biggest single-month drop in more than a decade. Even including people who are underemployed or who have given up looking for a job, the total unemployment percentage dropped to 16.5% from 17.3%. However, a separate survey found that a loss of 20,000 jobs left business payrolls essentially flat. Also, the rolling four-week average of initial unemployment claims continued to rise, though the number was roughly 19% lower than at this time last year.
• December construction declined 1.2% from the previous month. That's 9.9% below last December, and is a bit better than the 12.4% decline for all of 2009.
• Manufacturing improved in January for the sixth month in a row. The Institute for Supply Management's index rose to 58.4%, the highest number since August 2004 (any number over 50 indicates manufacturing growth).
• Despite a sharp drop in Toyota sales (no surprise there), January auto sales were up 6.3% from December, marking the third consecutive increase over the previous year's monthly figure. Both Ford and GM reported increased sales. Much of the buying was done by business fleets rather than individual consumers.
• Business productivity began to slow in the fourth quarter of last year, though it was up 2.9% for all of 2009. The output of goods produced in Q4 rose 7.2%, while the number of total hours worked by the labor force was up 1%--the first increase since Q2 2007. (However, the total hours worked for all of 2009 was down 6.4%, a record decline.)
• Incomes rose 0.4% in December, though wages and salaries were up by only 0.1%. Consumer spending also increased by 0.2%, and the personal savings rate rose to 4.8% from 4.5% in November.
• A weak auction of Portuguese sovereign debt and Spain's forecast of higher budget deficits for the next three years fanned investor concern that Greece's economic troubles might be only a hint of what's to come for the European Union. As a result, the euro hit an eight-month low (just under $1.37) against the dollar.
• President Obama proposed a $3.8 trillion budget for the fiscal year that begins in September. It forecasts a $1.56 trillion budget deficit for next year, compared to the $1.2 trillion deficit when Obama took office and the estimated $1.3 trillion deficit this year.

Eye on the Week Ahead

A light week for economic data gives investors little to focus on other than retail sales, additional earnings reports, and the potential fallout from credit woes in several European countries.

Key data releases: International trade, Treasury budget (2/10); retail sales (2/11).

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--

Investment Strategist from MFS

U.S. economic news

U.S. economic data point to recovery
Retail sales rose in January for the third month out of four, a sign that consumer spending is continuing into 2010. Sales increased 0.5%, which was more than forecast and followed a 0.1% drop in December.


Home prices rose in more than one-third of U.S. metropolitan areas in the fourth quarter, according to the National Association of Realtors.


Fewer Americans than expected filed claims for unemployment insurance in the week ended February 6. Initial jobless applications fell by 43,000, to 440,000 for the week, the lowest level in five weeks.


U.S. and global corporate news


Profits surprise on upside As of Friday more than 350 companies in the Standard & Poor's 500 Stock Index had reported fourth-quarter earnings, with about 76% beating analysts' estimates, according to data compiled by Bloomberg.


Rolls-Royce Group, which is the second-largest maker of commercial and military jet engines, returned to profit in 2009, thanks to strong demand for transport and infrastructure. Net profit for the year was £2.22 billion, compared with a net loss of £1.34 billion a year earlier.


Rio Tinto Group, the world's third-largest mining company, also returned to profit in its second half as prices increased because of the global recovery.


PepsiCo's fourth-quarter earnings nearly doubled as food sales grew in the Americas. The company said that its North American beverage business, which had been a weak performer, was starting to show improvement as brands such as SoBe Lifewater and Gatorade gained market share.

Global economic news

EU vows to maintain stability in eurozone; growth falters European Union countries pledged Thursday to support Greece through its debt crisis but did not offer details on what kind of support might be provided. Leaders of the 27-nation bloc promised "determined and coordinated action if needed to safeguard the financial stability" of the eurozone. The show of support comes as fears spread over a possible sovereign default and the implications such a default could have for the 16-nation eurozone.


The eurozone recovery nearly stalled in the fourth quarter as gross domestic product grew only 0.1%. The slow growth was attributed in part to the worsening recession in Greece, where GDP fell 0.8%. Eurozone growth declined a seasonally adjusted 2.1% in the fourth quarter from a year earlier.


China orders banks to hold more deposits For the second time in a month, China ordered banks to set aside more deposits in an effort to cool the fastest-growing economy after loan growth accelerated and property prices surged. In January property prices in 70 cities climbed at the fastest pace in 21 months, and lending rose to $203 billion, topping the previous three months combined. The reserve requirement will increase by 50 basis points. In Europe, stocks reversed gains on the news amid concern that the tighter lending in China will damp the global recovery.


Mexico's industrial production recovers Mexico's industrial production rose in December for the first time since 2008 as a recovery in U.S. manufacturing boosted demand for exports.


Stay focused and diversified
In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk. Diversification does not guarantee a profit or protect against loss.


The views expressed here are those of MFS^®and are subject to change at any time. These views should not be relied upon as investment advice, as securities recommendations, or as an indication of trading intent on behalf of any MFS investment product. Individual securities mentioned are for illustrative purposes only and may not be relied upon as investment advice or as an indication of trading intent on behalf of any MFS product.


Securities discussed may or may not be holdings in any of the MFS funds or any of Schnack Financial Group's (SFG) portfolios. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report. For a complete list of holdings for any SFG portfolios, please contact us at info@SchnackFinancial.com.


Past performance is no guarantee of future results.
Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; Financial Times; boston.com.


--see disclaimer below--

Investment Strategist from MFS

Deriving perspective from panic

Two events of late have added further uncertainty to financial markets and have for some cast doubt on the trajectory of economic recovery.

After looking closely at the Greek debt situation and the January labor numbers, we believe there is some cause for concern but that the likely path ahead is for continued healing of the global economy and financial markets.

While Greece is in a very difficult position, we do not believe the eurozone will let it fail. And the labor market, while a laggard in this recovery, is showing signs of improvement.

At MFS, we encourage investors to look behind the headlines in an effort to derive perspective from panic. It is my hope that the following discussion, by shedding light on these events, will enable investors to make rational, not fear-based, decisions.

Sovereign risk crisis: Greece up first

• Greece is a very small part of the eurozone (2%). However, in light of the deleterious effects of the credit crisis, Greece's problems (large and persistent fiscal and trade deficits on top of high public indebtedness and poor international competitiveness) underscore similar troubles facing other developed countries, both inside and outside the eurozone.
• In the aftermath of the collapse of Lehman Brothers Holdings, it is very difficult to imagine that Greece will be allowed to fail (default on its debt). Not only are current concerns over Greece's failure increasingly putting serious pressure on Portuguese and Spanish financial assets, but French, Swiss, and German banks also find themselves significantly exposed to Greek banks.
• Unfortunately, it is not clear who or how Greece would be bailed out. Unlike the United States, the eurozone does not have a lender of last resort, nor does it have a common fiscal policy that might funnel aid or loans to Greece.
• Nonetheless, to ensure the cohesion of almost all western European economic and political institutions and to safeguard against a much more serious economic decline, it certainly behooves European policymakers to become more proactive, and we believe they will.

U.S. labor markets: Not signaling a double-dip trajectory

• The labor market data continue to show improvement, though at a painfully slow pace. However, the more forward-looking elements within the data point to relatively better times ahead.
• These forward-looking indicators include 1) continued increases in the number of temporary workers, 2) the first rise in manufacturing payrolls in three years, 3) improvements in the diffusion index, which measures the proportion of companies hiring and firing, 4) a longer work week, 5) rising aggregate hours worked, 6) better employment conditions from the ISM surveys, and 7) broadly declining initial jobless claims.
• Even with these encouraging signs, the path ahead for labor is likely to remain frustratingly sluggish, as corporate America looks for confirmation of an improved and sustainable rise in demand before hiring again.
• The first step for the labor market is to consistently produce positive jobs growth. This development would stop the bleeding of household incomes and improve the prospects for the consumer.
• The next step is for the labor market to produce enough jobs to stop the unemployment rate from rising. Depending upon how many discouraged unemployed workers re-enter the labor market, this would require a net increase of at least 100,000 jobs per month.
• The final step for the labor market is to produce jobs at a fast enough rate to measurably bring the unemployment rate down. Here, we likely would need to see job creation in excess of 200,000 per month.
• While this final step appears quite daunting, especially given that during the last labor market expansion the U.S. economy produced only about 150,000 jobs per month, let's take one step at a time.
• We believe that we are in the process of taking the first step and will see modest positive jobs growth within the next few months. Then we can focus our attention on the future.

You can visit www.mfs.com to view market commentary, including Chief Investment Strategist Corner. You can also go to Week in Review, which is published every Friday afternoon. Global Perspective provides monthly insightful commentary and analysis on markets around the globe. These features, plus complete product and performance information, can be found on mfs.com. These resources should be reviewed in conjunction with your personal investment strategy in addition to working with you individual financial advisor.

Source: MFS Research

The views expressed are those of Erik Weisman and are current through February 10, 2010. They do not necessarily reflect the views of individual MFS portfolio managers or other persons in the MFS organization. These views are subject to change at any time based on market and other conditions, and MFS disclaims any responsibility to update such views. No forecasts can be guaranteed. These views may not be relied upon as investment advice or as an indication of trading intent on behalf of any MFS fund.

The investments you choose should correspond to your financial needs, goals, and risk tolerance. For assistance in determining your financial situation, please consult a financial advisor.

Past performance is no guarantee of future results.

--see disclaimer below--

February 2010 Schnack Financial Newsletter

	How to Double the Power of Your Tax Refund Filing your taxes may be a dreaded chore, but receiving your refund is a wonderful reward. What you do with a refund is up to you, but here are some ideas that may make your tax refund twice as valuable.
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	College Debt: How Much Is Too Much? According to a recent survey, the confidence of parents in their ability to save for college dropped significantly over the past year. That's not entirely surprising, considering the economic climate. The trend of not saving enough makes families heavily dependent on borrowing to fund college.
	More Details

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	Special Needs Trusts A special needs trust (SNT), sometimes referred to as a supplemental needs trust, is a trust that is established to benefit a disabled person, or a person who has special needs, while still allowing such persons to qualify for and receive governmental health-care benefits.
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	Ask the Experts: What's an exchange-traded fund? Like a mutual fund, an exchange-traded fund (ETF) pools money from investors to buy a group of securities.
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	Ask the Experts: How can I use exchange-traded funds? There are many ways an exchange-traded fund (ETF) can be used to help round out or supplement an existing investment portfolio.
	More Details

Market Week: February 8, 2010

The Markets


After an encouraging start, domestic equities resumed their recent losing ways. Small caps and international stocks led the indexes downward--the Dow dropped 268 points on Thursday alone--as domestic equities edged closer to the 10% decline from recent levels that is typically considered the hallmark of a correction. The Russell 2000 is now down about 8.6% from its January 19 high; the Nasdaq has fallen about 7.7% in the same time.

Market/Index	2009 Close	Prior Week	As of 2/5	Week Change	YTD Change
DJIA	10428.05	10067.33	10012.23	-.55%	-3.99%
NASDAQ	2269.15	2147.35	2141.12	-.29%	-5.64%
S&P 500	1115.10	1073.87	1066.19	-.72%	-4.39%
Russell 2000	625.39	602.04	592.98	-1.50%	-5.18%
Global Dow	1984.48	1882.49	1835.66	-2.49%	-7.50%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	3.85%	3.63%	3.59%	-4 bps	-26 bps

Last Week's Headlines

• Mixed messages: The unemployment rate actually fell--that's right, FELL--in January to 9.7%. That's the lowest rate since August, and the biggest single-month drop in more than a decade. Even including people who are underemployed or who have given up looking for a job, the total unemployment percentage dropped to 16.5% from 17.3%. However, a separate survey found that a loss of 20,000 jobs left business payrolls essentially flat. Also, the rolling four-week average of initial unemployment claims continued to rise, though the number was roughly 19% lower than at this time last year.
• December construction declined 1.2% from the previous month. That's 9.9% below last December, and is a bit better than the 12.4% decline for all of 2009.
• Manufacturing improved in January for the sixth month in a row. The Institute for Supply Management's index rose to 58.4%, the highest number since August 2004 (any number over 50 indicates manufacturing growth).
• Despite a sharp drop in Toyota sales (no surprise there), January auto sales were up 6.3% from December, marking the third consecutive increase over the previous year's monthly figure. Both Ford and GM reported increased sales. Much of the buying was done by business fleets rather than individual consumers.
• Business productivity began to slow in the fourth quarter of last year, though it was up 2.9% for all of 2009. The output of goods produced in Q4 rose 7.2%, while the number of total hours worked by the labor force was up 1%--the first increase since Q2 2007. (However, the total hours worked for all of 2009 was down 6.4%, a record decline.)
• Incomes rose 0.4% in December, though wages and salaries were up by only 0.1%. Consumer spending also increased by 0.2%, and the personal savings rate rose to 4.8% from 4.5% in November.
• A weak auction of Portuguese sovereign debt and Spain's forecast of higher budget deficits for the next three years fanned investor concern that Greece's economic troubles might be only a hint of what's to come for the European Union. As a result, the euro hit an eight-month low (just under $1.37) against the dollar.
• President Obama proposed a $3.8 trillion budget for the fiscal year that begins in September. It forecasts a $1.56 trillion budget deficit for next year, compared to the $1.2 trillion deficit when Obama took office and the estimated $1.3 trillion deficit this year.

Eye on the Week Ahead

A light week for economic data gives investors little to focus on other than retail sales, additional earnings reports, and the potential fallout from credit woes in several European countries.


Key data releases: International trade, Treasury budget (2/10); retail sales (2/11).


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.


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Roth Conversions - 2010

You've probably heard a lot of talk about the Roth IRA Conversion changes in 2010. Click the link below to find out more and then give us a call.

Roth IRA Conversions 2010