March 12, 2013

Markets Reach Record Highs of 2007

During periods of strong market performance, like the one we've experienced since the end of last year, it's important to remember that markets ebb and flow over time. Since December 31, 2012, the Dow Jones Industrial Index has gained 9.9 percent and the Standard & Poor's 500 added 8.8 percent. Last week, the Dow reached highs last seen during 2007, and the S&P 500 ended the week less than one percent from its record high, which was also realized during 2007.

While the strong performance of U.S. stock markets has given investors reason to smile, significant economic challenges remain. The effect of sequester spending cuts on the American public and economic growth remains relatively unknown. Also, U.S. earnings growth appears to be slowing and that could affect stock prices. (Earnings are a measure of a company's profitability and influence its share price.)

Global markets were largely up last week, too, as investors seemed to celebrate stronger U.S. and Chinese economic data, as well as the fact that Central banks in Europe, the United Kingdom, Australia, Japan, and Canada met and left their monetary policies unchanged.

In the Eurozone, economic growth remained relatively weak and inconsistent. While the European Central Bank has stepped up to help countries affected by poor demand for bonds, insufficient bank-to-business lending has negatively affected economic growth, especially in southern Europe, leaving some countries mired in recession.

In the United States, yields on 10-year Treasuries rose higher last week despite Federal Reserve assurances that it will continue to pursue its current monetary policy for some time.

Data as of 3/8/13 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 2.2% 8.8% 13.6% 10.9% 4.0% 6.7%
10-year Treasury Note (Yield Only) 2.1 N/A 2.5 3.7 3.4 3.6
Gold (per ounce) 0.0 -6.6 -6.4 12.0 10.3 16.1
DJ-UBS Commodity Index 1.1 -1.3 -4.8 0.7 -8.6 1.1
DJ Equity All REIT TR Index 0.8 6.2 20.3 18.5 8.7 12.8

Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron's,, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Is a wedding in your future? If so, prepare yourself. Between the planner, venue, food, flowers, cake, dress, drinks, photographer, videographer, invitations, programs, and all the rest, you're likely to be hearing a lot of this: Ka-ching! Ka-ching! More than $50 billion is spent on weddings in the United States each year. According to the 2012 Wedding Report, the average wedding has about 133 to 143 guests and costs more than $25,000, not including the honeymoon. The good news is the average cost of a wedding in 2011 was less than the average cost in 2007. The bad news is that, according to, the cost of any wedding could increase by 50 to 100 percent if the planners choose designer labels, popular event locations, custom products and services, or if they invite significantly more guests. Here are a few tips that may help ensure wedding costs don't spiral out of control:

  • Establish a budget. Set a budget for the wedding, but make sure you build in a cushion of 10 to 15 percent for cost overruns, just as you would if you were putting an addition on your house or remodeling.
  • Understand venue and reception costs. When negotiating the cost of your reception, it's important to ask for the per person cost, all-inclusive. If you're given an all-inclusive price and you find the words 'additional costs may be incurred' or 'plus the cost of setup and delivery' in your final contract, ask what those costs are, specifically, and be prepared to negotiate.
  • Make smart liquor choices. The drinks served at the reception often are a significant expense. Many venues charge for every bottle opened. To save on the cost, you could opt to serve beer, wine, and champagne for toasts. Alternatively, you could offer signature cocktails that require a single type of liquor, which can help limit the number of bottles opened.

After evaluating costs, you may decide that the best option is for the happy couple to elope, marry in an exotic locale, and celebrate with a big party when they return. If that's not an option, make sure to take advantage of the plentiful online resources available.

Weekly Focus - Think About It

"The greatest happiness of life is the conviction that we are loved; loved for ourselves, or rather, loved in spite of ourselves."

Victor Hugo, French poet and novelist

Best regards,
Sean M. Dowling, CFP, EA
President, The Dowling Group Wealth Management

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  • 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 DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices.
  • The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
  • This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.
  • Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.
  • The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
  • The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
  • Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
  • Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
  • Past performance does not guarantee future results.
  • You cannot invest directly in an index.
  • Consult your financial professional before making any investment decision. on U.S. & Intl Recaps and then click on "Keeping the status quo for now" under "International Perspective") on U.S. & Intl Recaps and then click on "Punch Bowl and Employment" under "Simply Economics") may have to Refresh the page to view the information)

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