Market Commentary
For the week of Jan. 2, 2012

The Markets
After a turbulent year, U.S. markets ended 2011 mixed. The S&P closed up 2.11 percent, just slightly above its 2011 start. The Dow closed with an 8.38 percent gain for the year, its second straight annual increase. The NASDAQ closed the year 1.8 percent below 2011’s opening numbers. The markets were closed Jan. 2, 2012, in observation of the New Year holiday. For the week, the Dow fell 0.60 percent to close at 12,217.56. The S&P lost 0.58 percent to finish at 1,257.60 and the NASDAQ dropped 0.52 percent to end the week at 2,605.15.

Returns Through 12/30/11 1 Week YTD 1 Year 3 Year 5 Year
Dow Jones Industrials (TR) -0.60 8.38 8.38 14.89 2.37
NASDAQ Composite (PR) -0.52 -1.80 -1.80 18.21 1.52
S&P 500 (TR) -0.58 2.11 2.11 14.11 -0.25
BarCap US Agg Bond (TR) 0.74 7.84 7.84 6.77 6.50
MSCI EAFE (TR) 0.81 -12.14 -12.14 7.65 -4.72

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, BarCap US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.


Retirement Plans – Ten years ago, half of all American workers planned to retire before they reached the age of 65. Today, that number has plunged to just 23 percent (source: Financial Planning Magazine).


Not So Outstanding – Fifty-six percent of American retirees still had outstanding debts when they retired, according to a survey by CESI Debt Solutions (source: Financial Planning Magazine).


Double-Up – Right now, there are almost 40 million senior citizens in the U.S. By 2050, that number will more than double to almost 90 million (source: Financial Planning Magazine).



WEEKLY FOCUS – Turning Resolutions Into Habits

Making New Year’s resolutions has become almost cliché, because, let’s face it, most of us can’t make it to the end of January. The trick is tying your resolution to your current behavior and making it a habit.

Let’s say you have resolved in 2012 to increase your 401(k) contributions. With your current budget, you may not have extra cash readily available, so you need to look for an expense you can cut to free up funds.

Denying yourself something you count on or truly enjoy can be the first step in failing to keep your resolution – just ask a chocolate lover who has tried to quit cold turkey as part of a diet, only to boomerang the next week by eating a whole box of truffles. You need to be creative to find expenses you can live without, without feeling denied. For example, maybe you love the silver screen and you reward yourself at the end of each work week with a night out at the movies. Using round numbers, you and your spouse will spend $20 for tickets.

What do you spend on snacks? Two drinks and a tub of popcorn can easily run $15 to $20 at most theaters. Instead of giving up movie night altogether, what about having that snack before you leave home? Cost of two 20-ounce bottles of pop and a bag of microwave popcorn – less than $5. You’ve saved $10 to $15. Do that every week, and you’ve saved $40 to $60 a month – approximately $500 to $700 a year – without giving up your movie night completely.

This is just one example of habits – like buying snacks at the theater – that can be eliminated without losing the things you need or love – like movies. If you can’t eliminate it entirely without feeling deprived or resentful, try reducing or making it a reward. For example, if you stick to your movie snack goal for three months, reward yourself for one night with those two sodas and popcorn – extra large with extra butter!

Your financial resolutions for 2012 may be bigger than an extra $500 in your 401(k) this year. We can help you find ways to meet your goals this year, and for many more, no matter how big or small. Call our office to schedule time to discuss what you want to accomplish in 2012.



* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America. SAI#435901