Lawing Financial 2nd Quarter 2009 2Q09. Markets Overview All data as of 6/30/09 Monthly...
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Lawing Financial 2nd Quarter 2009 2Q09
Transcript of Lawing Financial 2nd Quarter 2009 2Q09. Markets Overview All data as of 6/30/09 Monthly...
Lawing Financial2nd Quarter 2009
2Q09
Markets OverviewAll data as of 6/30/09
Monthly Performance Year-To-Date Performance
Indices 5/29/09 6/30/09 Gain/Loss % Change 12/31/08 6/30/09 Gain/Loss % Change
Dow Jones 8500.33 8447.00 -53.33 -.62% 8776.39 8447.00 -429.39 -4.84%
S&P 500 919.14 919.32 .18 -.02% 903.25 919.32 16.07 1.80%
NASDAQ 1774.33 1835.04 60.71 3.42% 1577.03 1835.04 258.01 16.36%
Russell 2000 501.58 508.28 6.70 1.33% 499.45 508.28 8.83 1.77%
10 Yr Note Yield 3.11% 3.53% .42% 13.50% 2.24% 3.53% 1.31% 58.48%
Markets OverviewAll data as of 6/30/09
Monthly Performance Year-To-Date Performance
Indices 5/29/09 6/30/09 Gain/Loss % Change 12/31/08 6/30/09 Gain/Loss % Change
Dow Jones 8500.33 8447.00 -53.33 -.62% 8776.39 8447.00 -429.39 -4.84%
S&P 500 919.14 919.32 .18 -.02% 903.25 919.32 16.07 1.80%
NASDAQ 1774.33 1835.04 60.71 3.42% 1577.03 1835.04 258.01 16.36%
Russell 2000 501.58 508.28 6.70 1.33% 499.45 508.28 8.83 1.77%
10 Yr Note Yield 3.11% 3.53% .42% 13.50% 2.24% 3.53% 1.31% 58.48%
Markets OverviewAll data as of 6/30/09
Monthly Performance Year-To-Date Performance
Indices 5/29/09 6/30/09 Gain/Loss % Change 12/31/08 6/30/09 Gain/Loss % Change
Dow Jones 8500.33 8447.00 -53.33 -.62% 8776.39 8447.00 -429.39 -4.84%
S&P 500 919.14 919.32 .18 -.02% 903.25 919.32 16.07 1.80%
NASDAQ 1774.33 1835.04 60.71 3.42% 1577.03 1835.04 258.01 16.36%
Russell 2000 501.58 508.28 6.70 1.33% 499.45 508.28 8.83 1.77%
10 Yr Note Yield 3.11% 3.53% .42% 13.50% 2.24% 3.53% 1.31% 58.48%
Markets OverviewAll data as of 6/30/09
Monthly Performance Year-To-Date Performance
Indices 5/29/09 6/30/09 Gain/Loss % Change 12/31/08 6/30/09 Gain/Loss % Change
Dow Jones 8500.33 8447.00 -53.33 -.62% 8776.39 8447.00 -429.39 -4.84%
S&P 500 919.14 919.32 .18 -.02% 903.25 919.32 16.07 1.80%
NASDAQ 1774.33 1835.04 60.71 3.42% 1577.03 1835.04 258.01 16.36%
Russell 2000 501.58 508.28 6.70 1.33% 499.45 508.28 8.83 1.77%
10 Yr Note Yield 3.11% 3.53% .42% 13.50% 2.24% 3.53% 1.31% 58.48%
Markets OverviewAll data as of 6/30/09
Monthly Performance Year-To-Date Performance
Indices 5/29/09 6/30/09 Gain/Loss % Change 12/31/08 6/30/09 Gain/Loss % Change
Dow Jones 8500.33 8447.00 -53.33 -.62% 8776.39 8447.00 -429.39 -4.84%
S&P 500 919.14 919.32 .18 -.02% 903.25 919.32 16.07 1.80%
NASDAQ 1774.33 1835.04 60.71 3.42% 1577.03 1835.04 258.01 16.36%
Russell 2000 501.58 508.28 6.70 1.33% 499.45 508.28 8.83 1.77%
10 Yr Note Yield 3.11% 3.53% .42% 13.50% 2.24% 3.53% 1.31% 58.48%
Markets OverviewAll data as of 6/30/09
Monthly Performance Year-To-Date Performance
Indices 5/29/09 6/30/09 Gain/Loss % Change 12/31/08 6/30/09 Gain/Loss % Change
Dow Jones 8500.33 8447.00 -53.33 -.62% 8776.39 8447.00 -429.39 -4.84%
S&P 500 919.14 919.32 .18 -.02% 903.25 919.32 16.07 1.80%
NASDAQ 1774.33 1835.04 60.71 3.42% 1577.03 1835.04 258.01 16.36%
Russell 2000 501.58 508.28 6.70 1.33% 499.45 508.28 8.83 1.77%
10 Yr Note Yield 3.11% 3.53% .42% 13.50% 2.24% 3.53% 1.31% 58.48%
Markets OverviewAll data as of 6/30/09
Monthly Performance Year-To-Date Performance
Indices 5/29/09 6/30/09 Gain/Loss % Change 12/31/08 6/30/09 Gain/Loss % Change
Dow Jones 8500.33 8447.00 -53.33 -.62% 8776.39 8447.00 -429.39 -4.84%
S&P 500 919.14 919.32 .18 -.02% 903.25 919.32 16.07 1.80%
NASDAQ 1774.33 1835.04 60.71 3.42% 1577.03 1835.04 258.01 16.36%
Russell 2000 501.58 508.28 6.70 1.33% 499.45 508.28 8.83 1.77%
10 Yr Note Yield 3.11% 3.53% .42% 13.50% 2.24% 3.53% 1.31% 58.48%
Markets OverviewAll data as of 6/30/09
Monthly Performance Year-To-Date Performance
Indices 5/29/09 6/30/09 Gain/Loss % Change 12/31/08 6/30/09 Gain/Loss % Change
Dow Jones 8500.33 8447.00 -53.33 -.62% 8776.39 8447.00 -429.39 -4.84%
S&P 500 919.14 919.32 .18 -.02% 903.25 919.32 16.07 1.80%
NASDAQ 1774.33 1835.04 60.71 3.42% 1577.03 1835.04 258.01 16.36%
Russell 2000 501.58 508.28 6.70 1.33% 499.45 508.28 8.83 1.77%
10 Yr Note Yield 3.11% 3.53% .42% 13.50% 2.24% 3.53% 1.31% 58.48%
Markets OverviewAll data as of 6/30/09
Monthly Performance Year-To-Date Performance
Indices 5/29/09 6/30/09 Gain/Loss % Change 12/31/08 6/30/09 Gain/Loss % Change
Dow Jones 8500.33 8447.00 -53.33 -.62% 8776.39 8447.00 -429.39 -4.84%
S&P 500 919.14 919.32 .18 -.02% 903.25 919.32 16.07 1.80%
NASDAQ 1774.33 1835.04 60.71 3.42% 1577.03 1835.04 258.01 16.36%
Russell 2000 501.58 508.28 6.70 1.33% 499.45 508.28 8.83 1.77%
10 Yr Note Yield 3.11% 3.53% .42% 13.50% 2.24% 3.53% 1.31% 58.48%
Challenges Participants ExperienceDalbar Study conducted from 1986 to
2005
S&P 500 11.90%
Equity Investor 3.51%
Retirement Plan Investor 6.00%
Annual difference between S&P 500 and Systematic/401k Investor Returns:
5.90%
The study, done by DALBAR, was one that studied various types of investors, their average returns and the tendencies that they shared and the typical trends that
occurred.
Even though the average participant still made the mistakes of buying high and selling low, they out performed the average Equity (lump sum) Investor. Why is that?
The answer: The Power of Dollar Cost Averaging
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Participant control Amount invested Asset mix Ownership of assets
Pre-tax investing
Tax deferral
Tailored investment plan
• Earned income• Pension• Social Security• Investment income• Other
18%
18%
21%
2%
41%
0
2
4
6
8
10
12%
1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006
25-year-old 35-year-old 45-year-old 55-year-old
$6,000
5,000
4,000
3,000
2,000
1,000
$5,778
$1,920
$820
$381
7.5%
5.7%
3.6% 3.7%
2.3%3.0%
0
2
4
6
8
10%
Stocks Stocks aftertaxes
Bonds aftertaxes
Bonds Cash Cash aftertaxes
Inflation
9.6%
0
50
100
150
200
$250k
5 10 15 20 25 30 35 40 45
• Value of taxable account
• Value of tax-deferred account
Years To Retirement
**Based on a $10,000 Initial Investment, 28% Tax Bracket and 8% Return
Stopping Deferrals Lose tax savings Lose Tax Deferred Growth Lose on Future Earnings
Taking Loans Loan Interest in not tax deductible Loan fees are normally about $75 to $100 initially and then annually.
That means on a $1,000 loan, in addition to interest, borrower is paying another 7.5% to 10%
If you leave or are terminated, then the loan must be repaid. If it is not, then it will be taken from your balance and instantly become taxable with other IRS penalties.
The Negative Impact of Certain Decisions
#1 Golden Rule; Do Not Panic. Volatility, is now, and always has been a part
of the markets. How you react to it will dictate your long-term performance.
Start by reviewing your timetable. Visit with a Lawing Advisor to review your risk
profile, possibly take a new risk questionnaire. If you are planning on retiring in less than 3
years, be sure to discuss your plans, savings goals and risk profile with a Lawing Financial Advisor.
What do you do now?
