Good Afternoon!

November is just 2 weeks old and already the S&P 500 has gained +5.7% this month (total return), up a total of +23.7% YTD.

The continued strong run for the US stock market has occurred in the middle of a record gold price (close of $1,116 an ounce last Friday), a weaker US dollar and a contentious debate that continues in Congress over national health care reform (source: BTN Research).

Two government programs were in the news last week and their economic status may cause taxpayers to wonder if some level of financial assistance may be required in the future. The Pension Benefit Guaranty Corporation (PBGC), the government company that insures the pensions of 1 in 7 Americans, reported a $22 billion deficit after taking over 144 plans this last fiscal year. The Federal Housing Administration (FHA) reported that the reserves it maintains for potential defaults had fallen to just ½ of 1% (0.53%) of the $685 billion of mortgage loans it insures, ¼ of the federally mandated 2% capital reserve ratio it is required to sustain (source: PBGC, FHA).

The average interest rate nationwide on 30-year fixed rate mortgages fell to 4.91% last week, ever so close to its 4.78% all-time record low and a level that may encourage additional refinancing activity (source: Freddie Mac).

Notable Numbers for the Week:

1. THE SAME – 2009 is the 19th year in the last 50 years (i.e., 1960-2009) when the same political party (either the Democrats or the Republicans) controlled the House, the Senate and the White House. In the previous 18 years when Washington’s political control was concentrated to a single party, the S&P 500 gained an average of +11.3% per year (total return). The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).

2. HOW LONG? – Following the end of our nation’s 8 month recession in November 2001, the Federal Reserve first raised interest rates on 6/30/04 or more than 2 ½ years later (source: NBER).

3. SMALLER BANKS – Commercial real estate loans make up 32% of the lending originated by regional banks, compared to just 10% of the loans made by large national banks (source: Keefe Bruyette & Woods).

4. SNOWBIRDS – An existing home owner has until 4/30/10 to sign a binding sales contract to purchase a new primary residence that qualifies for a tax credit that is worth 10% of the cost of the home up to $6,500 (note that homes costing more than $800,000 are not eligible for the credit). The tax credit is phased out at adjusted gross income levels of $225,000 and up for a married couple. Please consult a qualified tax advisor or real estate professional for additional details (source: National Association of Home Builders).

Past Performance is not a guarantee of future results.  The S&P 500 is an unmanaged index and you cannot directly invest into an index. The above communication is written by Michael A. Higley. Mr. Higley is not an employee of Cambridge Investment Research and any comments, opinions or facts listed are those of Mr. Higley.

The Fulton District Wide Storytelling Festival was held and storytellers from throughout the district showcased their talents in telling a wide variety of stories. Participants told a folktale, fairytale, myth, legend, tall tale or fable. The stories ranged from spooky legends to hilarious tales and many had a useful moral attached that provided a bit [...]

Parents: Get your social life back on track! Go out “guilt-free” and have fun knowing that your children are not just waiting for you by the TV — but are having fun too!

Air Force Airman 1st Class Brian J. Pawlikowski graduated from basic military training at Lackland Air Force Base, San Antonio, Texas.

Happy New Year to all of our readers in the tri-county region!
While our Richland facility is closed until April, the society is still active with Friday afternoon hours at the Barclay Court House in Pulaski (2nd floor over DMV, 2pm until 5) or by appointment. We got off to a rocky start following our [...]