Weekly Market Update through 11/05/10

as of November 5, 2010        
  Total Return
Index 12 months YTD QTD MTD
Stocks        
Russell 3000 19.04% 12.92% 7.77% 3.72%
S&P 500 17.26% 11.77% 7.59% 3.64%
DJ Industrial Average 17.50% 12.21% 6.29% 2.98%
Nasdaq Composite 23.76% 14.60% 8.97% 2.89%
Russell 2000 28.38% 18.98% 9.03% 4.75%
EAFE Index* 8.16% 5.74% 7.08% 3.41%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 8.67% 8.63% NA 0.28%
Barclays Intermediate US Gov/Credit 8.43% 8.38% NA 0.39%
Barclays Municipal  7.75% 6.50% NA -0.05%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $86.25    $82.92
Natural Gas    $4.08    $3.93
Gold    $1,389.20    $1,349.80
Euro    $1.39    $1.38
         
         
RECOVERY!        
  Since 3/09/09      
Index  Total Return TR annualized    
Stocks        
Russell 3000 92.56% 48.39%    
S&P 500 87.55% 46.05%    
DJ Industrial Average 83.05% 43.93%    
Nasdaq Composite 106.57% 54.80%    
Russell 2000 119.50% 60.56%    
EAFE Index* 83.41% 44.10%    
*EAFE index does not include dividends.

Mark A. Lewis

Research & Trading Associate

       
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Charitable Giving Tips

I recently read a study by The Center on Philanthropy at Indiana University.  “The 2008 Study of High Net Worth Philanthropy,” sponsored by Bank of America, found that over 90 percent of households surveyed planned to make donations using cash and checks in the near future.  A little over 30 percent planned to donate securities.  

As you probably know, donating appreciated securities has tax advantages.  Sure, it is not as easy as writing a check.  With proper planning and some paperwork, you can lower your tax burden while providing the donation amount you already planned to give.  

It is important to consider the option this year if you had a major tax event.  Perhaps you converted from a traditional IRA to a Roth IRA.  Maybe you have a capital gain from a stock sale.  Donating appreciated securities could minimize the resulting tax burden.      

Such donations can also become part of long-term estate planning.  Do you want to provide a legacy for the charity or charities of your choice?  Do you want to donate a fixed sum every year?  Would you like for your children to be involved in charitable giving decisions? 

Your investment advisor can assist you with both your short-term and long-term charitable giving strategies.  If you are interested in donating securities this tax year, I urge you to contact your advisor soon.  It is best to submit securities donations as early as possible to ensure processing before December 31. 

Cristy Freeman, AAMS
Senior Operations Associate

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Roth Conversion

Time is running out for a 2010 Roth Conversion! The benefits of doing a conversion in 2010 is that you can (a) pay the tax at 2010 rates or (b) stretch the tax payments out to 2011 and 2012. A Roth account grows tax free just as any other retirement account, but there are no required minimum distributions and any withdrawals are tax free. The plan to have various pots of money in your retirement years with one being tax free could be a great benefit. For more information, check out our video located at www.parsecfinancial.com/video.html.

Barbara Gray, CFP®
Partner

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Weekly Market Update through 10/22/10

as of October 22, 2010        
  Total Return
Index 12 months YTD QTD MTD
Stocks        
Russell 3000 11.48% 8.71% 3.74% 3.74%
S&P 500 10.46% 7.80% 3.77% 3.77%
DJ Industrial Average 13.46% 9.10% 3.34% 3.34%
Nasdaq Composite 15.68% 10.12% 4.71% 4.71%
Russell 2000 16.17% 13.58% 4.08% 4.08%
EAFE Index* 1.44% 2.72% 4.02% 4.02%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 8.44% 8.36% NA 0.39%
Barclays Intermediate US Gov/Credit 8.10% 7.89% NA 0.42%
Barclays Municipal  7.81% 6.93% NA 0.09%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $82.41    $82.88
Natural Gas    $3.28    $3.45
Gold    $1,343.30    $1,367.20
Euro    $1.40    $1.39
         
         
RECOVERY!        
  Since 3/09/09      
Index  annualized      
Stocks        
Russell 3000 46.30%      
S&P 500 44.12%      
DJ Industrial Average 42.68%      
Nasdaq Composite 52.61%      
Russell 2000 57.79%      
EAFE Index* 42.77%      
*EAFE index does not include dividends.        
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Weekly Market Update through 10/15/10

as of October 15, 2010        
  Total Return
Index 12 months YTD QTD MTD
Stocks        
Russell 3000 10.37% 8.13% 3.20% 3.20%
S&P 500 9.45% 7.15% 3.14% 3.14%
DJ Industrial Average 12.95% 8.34% 2.63% 2.63%
Nasdaq Composite 14.76% 9.64% 4.25% 4.25%
Russell 2000 14.27% 13.53% 4.03% 4.03%
EAFE Index* 1.80% 3.19% 4.50% 4.50%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 8.44% 8.04% NA 0.09%
Barclays Intermediate US Gov/Credit 8.18% 7.72% NA 0.25%
Barclays Municipal  7.87% 6.87% NA 0.04%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $82.88    $82.68
Natural Gas    $3.45    $3.62
Gold    $1,367.20    $1,347.50
Euro    $1.40    $1.40
         
         
RECOVERY!        
  Since 3/09/09      
Index  annualized      
Stocks        
Russell 3000 46.49%      
S&P 500 44.20%      
DJ Industrial Average 42.67%      
Nasdaq Composite 52.96%      
Russell 2000 58.61%      
EAFE Index* 43.79%      
*EAFE index does not include dividends.        

 

Mark A. Lewis

Research & Trading Associate

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Weekly Market Update through 10/08/10

as of October 8, 2010        
  Total Return
Index 12 months YTD QTD MTD
Stocks        
Russell 3000 12.38% 7.03% 2.14% 2.14%
S&P 500 11.59% 6.13% 2.16% 2.16%
DJ Industrial Average 15.55% 7.79% 2.10% 2.10%
Nasdaq Composite 14.26% 6.66% 1.42% 1.42%
Russell 2000 15.65% 12.01% 2.64% 2.64%
EAFE Index* 2.75% 1.89% 3.18% 3.18%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 8.47% 8.64% NA 0.64%
Barclays Intermediate US Gov/Credit 8.11% 8.18% NA 0.68%
Barclays Municipal  6.57% 6.96% NA 0.13%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $82.68    $81.80
Natural Gas    $3.62    $3.73
Gold    $1,347.50    $1,313.60
Euro    $1.39    $1.37
         
         
RECOVERY!        
  Since 3/09/09      
Index  annualized      
Stocks        
Russell 3000 46.22%      
S&P 500 43.97%      
DJ Industrial Average 42.82%      
Nasdaq Composite 51.10%      
Russell 2000 58.14%      
EAFE Index* 43.27%      
*EAFE index does not include dividends.        

 

Mark A. Lewis

Research & Trading Associate

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Act Now to Save NC Taxes on Section 529 College Savings Plan Contributions and Rollovers

Tax breaks for the North Carolina Section 529 College Savings Plan are expiring 1/1/2012 for joint incomes over $100,000.  Currently, NC joint filers are eligible for a deduction of up to $5,000 from their state taxable income for contributions to the plan.  Single filers can deduct up to $2,500 in contributions.  These deduction levels are regardless of your income level for the 2010 and 2011 tax years.  For a couple in the 7% tax bracket, this would equate to $350 in savings on contributions of $5,000.

One interesting wrinkle is that rollover contributions from other state’s 529 plans are also eligible for the deduction.  If you currently have balances in another state’s plan, you should consider rolling them into the North Carolina plan.  Couples should contribute or rollover at least $5,000 for both 2010 and 2011 to obtain the maximum tax deduction each year.  Withdrawals from a 529 plan are income tax-free if used for qualified higher education expenses (college and beyond).

Most people that we see do not have sufficient education savings for their children.  How much you need to save depends on a variety of assumptions such as the current cost of education, the inflation rate of these costs and the rate of return on your education savings.  For a child born today and attending UNC Chapel Hill at age 18, you would need to save about $517 per month until they begin college.*

The cost of waiting to begin saving is significant.  For a ten-year old, you would need to save about $1,008 monthly under the same assumptions. 

Now is the time to get started or increase your education savings, while getting a little tax benefit.  All forms are available online at www.cfnc.org.  The North Carolina plan uses Vanguard funds as investment options, and the cost is actually slightly lower than Vanguard’s own Nevada 529 plan (which I currently have for my children).  I intend to roll these balances over to the North Carolina plan.  If I can save $700 in state income tax over the next two years by pushing a few buttons, I will certainly do it.

*Assumes:  $18,000 current annual education cost (tuition, books, fees, room & board); 7% annual inflation on education costs; 8.6% annual total return on education investments.

Bill Hansen, CFA

October 8, 2010

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Weekly Market Update through 10/01/10

as of October 1, 2010        
  Total Return
Index 12 months YTD 3rd QTR Sept
Stocks        
Russell 3000 14.54% 5.24% 11.53% 9.44%
S&P 500 13.58% 4.35% 11.29% 8.92%
DJ Industrial Average 17.00% 5.98% 11.12% 7.85%
Nasdaq Composite 16.41% 5.26% 12.62% 12.18%
Russell 2000 17.89% 9.64% 11.29% 12.46%
EAFE Index* 2.82% -0.82% 15.79% 9.49%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 7.76% 7.98% NA 0.01%
Barclays Intermediate US Gov/Credit 7.38% 7.46% NA 0.01%
Barclays Municipal  5.50% 6.68% NA -0.14%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $81.80    $76.78
Natural Gas    $3.73    $3.77
Gold    $1,313.60    $1,298.90
Euro    $1.37    $1.34
         
         
RECOVERY!        
  Since 3/09/09      
Index  annualized      
Stocks        
Russell 3000 45.33%      
S&P 500 43.06%      
DJ Industrial Average 41.90%      
Nasdaq Composite 50.61%      
Russell 2000 56.53%      
EAFE Index* 41.14%      
*EAFE index does not include dividends.        

 

Mark A. Lewis

Research & Trading Associate

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Weekly Market Update through 9/24/10

as of September 24, 2010        
  Total Return
Index 12 months YTD QTD MTD
Stocks        
Russell 3000 12.14% 5.16% 11.93% 9.84%
S&P 500 11.55% 4.54% 11.99% 9.60%
DJ Industrial Average 14.96% 6.26% 11.85% 8.55%
Nasdaq Composite 14.14% 5.72% 13.21% 12.76%
Russell 2000 12.96% 8.24% 10.39% 11.55%
EAFE Index* 0.68% -1.02% 16.06% 9.75%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 7.93% 7.51% NA -0.30%
Barclays Intermediate US Gov/Credit 7.52% 7.04% NA 0.09%
Barclays Municipal  6.33% 6.88% NA -0.11%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $76.78    $73.75
Natural Gas    $3.77    $3.89
Gold    $1,298.90    $1,279.90
Euro    $1.34    $1.30
         
         
RECOVERY!        
  Since 3/09/09      
Index  annualized      
Stocks        
Russell 3000 45.93%      
S&P 500 43.86%      
DJ Industrial Average 42.76%      
Nasdaq Composite 51.78%      
Russell 2000 56.45%      
EAFE Index* 41.87%      
*EAFE index does not include dividends.        

 

Mark A. Lewis

Research & Trading Associate

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Weekly Market Update through 9/17/10

as of September 17, 2010        
  Total Return
Index 12 months YTD QTD MTD
Stocks        
Russell 3000 8.07% 2.95% 9.58% 7.53%
S&P 500 7.80% 2.42% 9.72% 7.38%
DJ Industrial Average 11.41% 3.79% 9.25% 6.03%
Nasdaq Composite 9.98% 2.79% 10.07% 9.64%
Russell 2000 7.22% 5.07% 7.15% 8.28%
EAFE Index* -3.67% -3.68% 12.94% 6.79%
*EAFE index does not include dividends.        
         
Bonds        
Barclays US Aggregate 7.74% 7.11% NA -0.67%
Barclays Intermediate US Gov/Credit 7.28% 6.61% NA -0.31%
Barclays Municipal  6.78% 6.48% NA -0.48%
         
    Current   Prior
Commodity/Currency   Level   Level
         
Crude Oil    $73.75    $73.20
Natural Gas    $3.89    $3.84
Gold    $1,279.90    $1,247.60
Euro    $1.30    $1.27
         
         
RECOVERY!        
  Since 3/09/09      
Index  annualized      
Stocks        
Russell 3000 44.60%      
S&P 500 42.60%      
DJ Industrial Average 41.21%      
Nasdaq Composite 49.80%      
Russell 2000 54.30%      
EAFE Index* 39.97%      
*EAFE index does not include dividends.        

 

Mark A. Lewis

Research & Trading Associate

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