IRA Missteps

A lack of knowledge can lead to problems & disappointments for your heirs.

Be vigilant, and be knowledgeable. Do you want to hand your heirs big tax problems? Would you like to hand the IRS a sizable chunk of your wealth? Of course not. But if you misunderstand the rules when it comes to inherited IRAs, you just might. Here are some missteps that IRA owners and IRA heirs often make – financial choices to regret.

Thinking that a will or a trust can facilitate the transfer of IRA assets. IRAs don’t pass to heirs through wills or trusts (a few rare exceptions aside). The beneficiary form takes precedence – the form the IRA owner filled out and signed when opening the account. Problems arise when

• The IRA owner dies without designating a beneficiary
• The designated beneficiary has also passed away
• No one can find the beneficiary form (not even the IRA custodian, i.e., the financial institution that hosts the IRA)

In these circumstances, IRA heirs commonly end up playing by the IRA custodian’s rules. The resulting beneficiary may be the IRA owner’s estate – a very undesirable tax consequence. It might be a contingent beneficiary – perhaps a very undesirable emotional consequence. The lesson here is to keep the beneficiary form handy and to let your heirs know where it is.¹

Taking lump-sum distributions. Too often, non-spousal IRA heirs see the inherited assets as money to spend. They withdraw the entire IRA balance in one fell swoop. Bad idea: all that money will be subject to federal income tax. Due to this move, they may lose a third of the IRA assets (or more).²

The alternatives? Non-spousal beneficiaries can open an inherited Roth or traditional IRA to house the inherited assets and simply take Required Minimum Distributions (RMDs) from that inherited IRA under the appropriate schedule.

• Traditional IRA: The age of the original accountholder is the big factor. If the original IRA owner was under age 70½ (i.e., hadn’t taken any RMDs), then distributions must occur within five years of that original IRA owner’s death. Under this “five-year rule”, the entire account balance must be distributed to the beneficiary within those five years. If the account holder was over age 70½ and had already taken RMDs, then the inherited IRA assets may be distributed gradually over the projected lifespan of the beneficiary according to IRS tables. Yearly distributions from an inherited IRA must start by December 31 of the year after the year in which the original IRA owner died.³
• Roth IRA: Instead of a hard choice, a non-spousal beneficiary of an inherited Roth IRA can select from one of two options. He or she can withdraw 100% of the inherited Roth IRA balance within five years of the original Roth IRA owner’s death, or over your remaining life expectancy as calculated through IRS tables.³

If you don’t have to go by the “five-year rule”, the invested IRA assets may keep compounding across many years with the added benefit of tax deferral.

You can also “disclaim” some or all of the inherited IRA assets, which could be a wise move for tax purposes if you don’t need the inherited funds.³                     

Not realizing your four options when you inherit your spouse’s IRA. If a spouse dies, the surviving spouse that inherits an IRA has some choices. He or she can

• Roll over the assets into a beneficiary IRA
• Convert the inherited IRA into your own IRA
• Take a lump sum distribution
• “Disclaim” up to 100% of the deceased spouse’s IRA assets

There are compelling reasons to go with the rollover. The widowed spouse can set up an RMD schedule based on his or her life expectancy. This second point is really important, because the rollover allows the surviving spouse to put off the RMDs that would otherwise soon need to happen. In fact, the surviving spouse can wait until the year in which the original IRA owner would have turned 70½ to start taking required withdrawals from the IRA.²

But there is also a compelling tax reason not to make a rollover if the widowed spouse wants to take distributions from the inherited IRA before age 59½. If that is the desire, those withdrawals will be slapped with the nagging 10% early withdrawal penalty plus the requisite income taxes.²

If the spouse converts the IRA into his or her own IRA, the surviving spouse can name a beneficiary for the inherited assets, keep contributing to the IRA, and potentially avoid RMDs until he or she turns 70½.⁴ 

Alternately, a surviving spouse who doesn’t really need inherited IRA assets can “disclaim” them, meaning that they will go to a contingent beneficiary. Sometimes this can be a wise move for tax purposes.⁵

Non-spousal heirs fail to retitle an inherited IRA. If this isn’t done in the year following the year in which the original IRA owner passed, then there can be no direct rollover of the inherited IRA assets and no “stretch” for those assets.^2,6

What happens if a non-spouse beneficiary just rolls the inherited IRA assets into an IRA they own, one that isn’t retitled? Then it is not a direct rollover. The IRS treats those inherited IRA assets like a fully taxable cash distribution – 100% of it is subject to income tax.⁶

Ask for help, and don’t be afraid to ask questions. Many families and couples have only a hazy understanding of the rules governing IRAs, and few really know all the options. Make sure your IRA beneficiary form is up to date, and speak with the financial professional you know and trust about how to handle the transfer of IRA assets when the time comes.

 

 

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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of Statler Financial Services, Inc., nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Statler Financial Services, Inc., is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 – investopedia.com/articles/pf/07/beneficiary_form.asp [3/23/11]
2 – schwab.com/cms/P-1625576.3/CS13416-02_MKT13598-10_FINAL_118091.pdf?cmsid=P-1625576&cv7 [6/24/11]
3 – axa-equitable.com/retirement/inheriting-an-ira-or-employer-sponsored-plan.html [6/09]
4 – jhrollover.com/article_beneficiary_basics_final.shtml [3/23/11]
5 – investopedia.com/articles/retirement/03/041603.asp [4/16/03]
6 – online.wsj.com/article/SB125512471450876777.html [10/10/09]

Weekly Economic Update, June 27, 2011

PEAK HOMEBUYING SEASON, BUT FEWER HOME SALES
The National Association of Realtors reported a 3.8% dip in existing home sales in May, and the Census Bureau noted a 2.1% reduction in new home purchases last month. The good news? New home sales were up 13.5% from last May, with the average price of a new home up $1,400 to $266,400. However, existing home sales were down 15.3% from a year before while the median existing home price was down 4.6% across the past 12 months.^1,2

IEA RELEASE SHIFTS SENTIMENT IN OIL MARKET
Thursday, the International Energy Agency decided that major oil-producing countries should release oil from their reserves to address a global shortfall. The U.S. will supply half of the 60 million barrels from its Strategic Petroleum Reserve, with the balance coming from nations in Europe and Asia. On Friday, oil futures in Europe slipped about 8% and settled at a four-month low; U.S. oil futures lost only 2.4% on the week and settled at $91.16 a barrel on the NYMEX.³

POSITIVE SIGNALS FOR BUSINESS INVESTMENT
The Commerce Department reported a 1.9% increase in durable goods orders for May. That’s a nice news item in itself, but consider the last few quarters and you notice that business investment is really ramping up: data from the Census Bureau has orders for new capital equipment rising at a 28% annualized pace during the last three months, and shipments of new capital equipment are up 15% in that span.^4,5

NASDAQ GLIDES THROUGH VOLATILE WEEKThe tech-heavy index pulled out a 1.39% advance across June 20-24 to settle at 2,652.89 Friday, having a very different week from the Dow (-0.58% to 11,934.58) and the S&P 500 (-0.24% to 1,268.44).⁶

THIS WEEK: Monday, we get the Commerce Department’s report on consumer spending for May, plus earnings from Nike. Tuesday offers the April edition of the S&P Case-Shiller home price index and the Conference Board’s June look at consumer confidence. Wednesday, we have 2Q results from General Mills, Family Dollar, KB Home and Monsanto plus the NAR’s report on May pending home sales. June ends on Thursday, and QE2 ends with it; of course, the latest initial and continuing claims figures will be released. Friday, July begins with the University of Michigan’s final June consumer sentiment survey, the June ISM manufacturing index, and data on May construction spending.

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 6/24/11^6,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The 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 Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx^®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 – money.cnn.com/2011/06/23/real_estate/new_home_sales/?section=money_latest [6/23/11]
2 – nytimes.com/2011/06/22/business/economy/22econ.html [6/22/11]
3 – bloomberg.com/news/2011-06-24/oil-fluctuates-in-n-y-on-u-s-durable-goods-orders-iea-reserve-release.html [6/24/11]
4 – marketwatch.com/story/us-durable-goods-orders-rise-19-for-may-2011-06-24 [6/24/11]
5 – marketwatch.com/story/business-investment-is-strengthening-2011-06-24 [6/24/11]
6 – cnbc.com/id/43528501 [6/24/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F24%2F10&x=0&y=0 [6/24/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F24%2F10&x=10&y=18 [6/24/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F24%2F10&x=0&y=0 [6/24/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F23%2F06&x=0&y=0 [6/24/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F23%2F06&x=0&y=0 [6/24/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F23%2F06&x=0&y=0 [6/24/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F25%2F01&x=0&y=0 [6/24/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F25%2F01&x=0&y=0 [6/24/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F25%2F01&x=0&y=0 [6/24/11]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/24/11]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/24/11]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]
10 -montoyaregistry.com/Financial-Market.aspx?financial-market=tax-loss-harvesting&category=31 [6/26/11]

The Different Types of IRA’s

There are many varieties of this popular savings vehicle.

What don’t you know? Many Americans know about Roth and traditional IRAs … but there are also many other types of IRAs. Here’s a quick look at several basic classes of IRAs, as well as some variations and additional information.

Traditional IRA.
(Contribution limit of $5,000, $6,000 if you are 50 or older)¹
A traditional IRA (or deductible IRA) is an individual savings plan for anyone who receives taxable compensation. IRA assets may be invested in any number of vehicles, and contributions may be tax-deductible. Earnings in a traditional IRA grow tax-deferred until withdrawal, but they will be taxed when withdrawal begins – and withdrawals must begin by the time the IRA owner reaches age 70½. If these Required Minimum Distributions (RMDs) are not taken at that age, a 50% penalty will be assessed on the amount not distributed. You cannot contribute to a traditional IRA after age 70½. The IRS considers all IRAs other than Roth and SIMPLE IRAs as traditional IRAs.²

Roth IRA.
(Contribution limit of $5,000, $6,000 if you are 50 or older)¹
A Roth IRA offers you a) tax-free compounding, b) tax-free withdrawals if you are older than age 59½ and have owned your account for at least five years, c) the potential to make contributions to your IRA after age 70½ without having to take RMDs. While contributions to a Roth IRA are not tax-deductible, a Roth IRA has an advantage on the back end, with fewer requirements and limitations regarding withdrawals.^3,4

Today, anyone with a traditional IRA may convert it to a Roth IRA. However, your ability to contribute to a Roth IRA may be restricted: in 2011, phase-outs kick in for joint filers whose modified adjusted gross income (MAGI) exceeds $169,000 and single filers whose MAGI exceeds $107,000.⁵

SIMPLE IRA.
(Contribution limit of $11,500, $2,500 catch-up contribution allowed if you are 50 or older)⁶
SIMPLE IRAs are qualified retirement plans for businesses with 100 or fewer employees. They are much easier (and more affordable) to administrate than 401(k) or 403(b) plans. They are funded by “elective deferrals” (salary reduction contributions from employees), and generally the employer has to match employee contributions on a dollar-for-dollar basis up to 3% of an employee’s compensation.⁶

SEP.
(Contributions cannot exceed $49,000 or a maximum of 25% of employee compensation)⁷
SEP stands for Simplified Employee Pension. These traditional IRAs are set up by an employer for employees, and like a pension plan, funded by employer contributions only. Contributions are tax-deductible, but qualified withdrawals taken after age 59½ are taxed at standard income tax rates. If an employer implements an SEP plan, allocations to all employees’ SEP-IRAs must be proportional to their salary/wages.⁷

Individual Retirement Annuity.
(Maximum contribution set at traditional or Roth IRA contribution limits)⁸
Some annuity contracts allow you to set up a traditional or Roth IRA with a life insurance company. Payments to the annuity may be made by the annuity owner or another party. The annuity owner’s entire interest must be fully vested, and the owner cannot transfer any of the balance to someone else.⁸

Spousal IRA.
(Contribution limit of $5,000, $6,000 if you are 50 or older)⁹
This is actually a rule that lets a working spouse make traditional or Roth IRA contributions on behalf of a non-working or retired spouse. The working spouse’s income is the determining factor as to whether or not a “Spousal IRA” contribution can be made. Contribution limits and eligibility requirements are the same as those for a regular IRA.

Inherited IRA.
(No contributions allowed in some cases)
A Roth or traditional IRA inherited by a non-spousal beneficiary. You cannot treat this IRA as your own. (If you inherit your spouse’s IRA, you can name yourself as the new owner and sole beneficiary and make contributions and withdrawals from it.) Distributions from inherited IRAs are subject to the minimum distribution rules; they must be taken over your lifetime, and the inherited IRA assets cannot be rolled over into an IRA you own.¹⁰ Inherited traditional IRAs may not be converted into Roth IRAs, but thanks to IRS Notice 2008-30, non-spouse beneficiaries of company retirement plan assets may now convert those inherited assets into Roth IRAs.¹¹

Group IRA.
(Contribution limit of $5,000, $6,000 if you are 50 or older)¹
A “Group IRA” is simply a traditional IRA offered by employers, unions, and other employee associations to their employees, administered through a retirement trust.

Rollover IRA.
(Contribution limit of $5,000, $6,000 if you are 50 or older)¹
Assets distributed from a qualified retirement plan may be rolled over into a traditional IRA, which may be converted later to a Roth IRA. Assets can be commingled within the IRA and rolled into another employer plan in the future.¹²

Education IRA (Coverdell ESA).
(Contribution limit of $2,000)¹³
The Coverdell ESA provides a vehicle to help middle-class investors save for a child’s education. Parents, guardians, and even corporations or partnerships can currently make nondeductible contributions totaling up to $2,000 annually into a Coverdell ESA on behalf of a minor. Starting in 2013, only individuals will be able to make contributions of $2,000 maximum per Coverdell ESA beneficiary. You get tax-free growth and tax-free withdrawals, provided the money is used for education expenses. Starting in 2013, any distributions that you use to pay elementary or secondary school expenses will be taxed. Contributions to a Coverdell ESA are not deductible.¹³

The bottom line.You should consult a qualified financial advisor regarding your IRA options. There are many choices available, and it is vital that you understand how your choice could affect your financial situation. No one IRA is the “right” IRA for everyone, so do your homework and seek advice before you proceed.

* Contribution limits listed as of June, 2011.

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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 irs.gov/retirement/article/0,,id=202510,00.html [11/1/10]
2 irs.gov/publications/p590/ch01.html#d0e8323 [11/19/08]
3 fool.com/Money/AllAboutIRAs/allaboutiras03.htm [11/19/08]
4 irs.gov/publications/p590/ch02.html#d0e9236 [11/19/08]
5 irs.gov/retirement/participant/article/0,,id=202518,00.html [11/1/10]
6 irs.gov/retirement/participant/article/0,,id=211345,00.html [11/1/10]
7 irs.gov/retirement/participant/article/0,,id=211336,00.html [10/29/10]
8 investopedia.com/terms/i/individual_retirement_annuity.asp [11/19/08]
9 irs.gov/retirement/participant/article/0,,id=211358,00.html [11/1/10]
10 usatoday.com/money/perfi/taxes/2007-04-13-aicpa13-saks_N.htm [4/13/07]
11 irahelp.com/newsletter/files/0088-2008-APR%20(1).pdf [4/08]
12 fool.com/Money/AllAboutIRAs/allaboutiras02.htm [11/18/08]
13 economy.kansascity.com/?q=node/11047 [6/10/11]

Weekly Economic Update, June 20, 2011

PRICES RISE, BUT INFLATION PRESSURE EASES
According to the Bureau of Labor Statistics, the Consumer Price Index rose 0.2% in May, with core CPI up 0.3%. (Food prices rose 0.4% and energy prices rose 0.6% last month.) This is the tamest monthly increase in inflation since last November. In year-over-year terms, the CPI is up 3.6% over the past 12 months; core CPI advanced 1.5%. The BLS also reported less wholesale price inflation in May: the Producer Price Index rose 0.2% last month after climbs of 0.8% in April and 0.7% in March. The year-over-year PPI gain was 7.3% – the biggest in almost three years.^1,2

LEADING INDICATOR INDEX TURNS NORTH
The Conference Board’s index of leading economic indicators was up 0.8% for May, rebounding from a 0.4% retreat in March. Eight of the index’s ten indicators showed improvement last month.³

CONSUMER SENTIMENT WAVERS
The preliminary June University of Michigan consumer sentiment survey came in at 71.8 last week, below the 74.0 that economists polled by Bloomberg had forecast and beneath the final 74.3 mark of May. The gauges surveying current conditions (-2.3%) and six-month expectations (-2.7%) both declined.³

RETAIL SALES COME IN BETTER THAN EXPECTED
Overall retail sales retreated just 0.2% for May. The Commerce Department said sales actually improved by 0.3% when the 2.9% drop in car sales was factored out. U.S retail sales are now up 7.7% in the last year.⁴

DOW, S&P SNAP LOSING STREAKS
At last! A weekly advance for the Dow (52.45 points) and the S&P 500 (0.52 points). The DJIA closed at 12,004.36 Friday; the NASDAQ and S&P 500 respectively ended the week at 2,616.48 and 1,271.50. The percentage gains and losses last week? DJIA, +0.44%; NASDAQ, -1.03%; S&P 500, +0.03%.⁵

THIS WEEK: Monday, no major economic releases are scheduled – but markets will certainly be responding to results of the meetings on the Greek debt crisis over the weekend. On Tuesday, we learn about May existing home sales and Barnes & Noble, Adobe and Walgreens announce earnings. The Federal Reserve considers an interest rate decision Wednesday, and we have earnings reports out of Bed Bath & Beyond and FedEx. Thursday brings data on May new home sales, earnings from Discover Financial, ConAgra and Oracle, and new initial and continuing jobless claims reports. Friday, the report on June durable goods orders comes out.

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 6/17/11^5,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The 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 Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx^®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 – bls.gov/news.release/cpi.nr0.htm [6/15/11]
2 – bls.gov/news.release/ppi.nr0.htm [6/14/11]
3 – bloomberg.com/news/2011-06-17/u-s-leading-economic-indicators-index-rises.html [6/17/11]
4 – marketwatch.com/story/retail-sales-fall-for-first-time-in-11-months-2011-06-14-919560 [6/17/11]
5 – cnbc.com/id/43444316 [6/17/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F17%2F10&x=0&y=0 [6/17/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F17%2F10&x=10&y=18 [6/17/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F17%2F10&x=0&y=0 [6/17/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F16%2F06&x=0&y=0 [6/17/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F16%2F06&x=0&y=0 [6/17/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F16%2F06&x=0&y=0 [6/17/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F18%2F01&x=0&y=0 [6/17/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F18%2F01&x=0&y=0 [6/17/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F18%2F01&x=0&y=0 [6/17/11]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/17/11]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/17/11]
8 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]
9 – montoyaregistry.com/Financial-Market.aspx?financial-market=roth-ira-rules-and-regulations&category=1 [6/19/11]

Reasons For Optimism

Stocks are fizzling … but things could change this summer.

When was the last time the Dow took a six-week tumble? On June 10, the Dow dipped below 12,000 and posted its sixth straight weekly decline. You have to go back to October 2002 to find a Dow losing streak that long. If you’re hearing bearish groans in the distance, you’re not alone: the bears are making their voices heard as the Dow is down almost 7% from where it was at the end of April.¹

June certainly has been tough on Wall Street, with the bulk of economic indicators flashing a slowdown. However, there is reason to think the third and fourth quarters of 2011 may be better for stocks – in fact, that’s what many analysts believe.

Q2 earnings projections are quite good. Investment research firm FactSet finds that despite the losing streak, aggregate Q2 S&P 500 earnings estimates are basically unchanged from late May. The collective forecast projects a 14.6% growth in earnings for the quarter and a 10.4% jump in revenues. (That double-digit revenue growth would be the best since Q1 2010.) As earnings are truly the mother’s milk of stocks, the market could heat up this summer if these collective predictions come true.²

Stocks are still cheap. On June 3, the S&P 500’s P/E ratio was 16.4 compared to 18.3 a year earlier. Most stocks look like a fair value right now.³

The economy is still growing. The Federal Reserve’s latest Beige Book and the twin PMI indices from the Institute for Supply Management both signal this. In fact, the ISM service sector index showed the growth of that sector accelerating in May.⁴

Homebuying could be poised to pick up. Sustained high unemployment isn’t going away this year, but some silver linings are emerging that bode well for the housing market. Moody’s Analytics says that the ratio of home prices to income is now 20.9% below the average ratio from 1985-2010. Mortgage interest rates are at levels unseen since the early 1960s. There are also indications that prices may be approaching a bottom in metro areas not rampant with short sales and foreclosures. Real estate analytics company CoreLogic found that home prices were down 7.5% year-over-year in April, but only down 0.5% when distressed sales were factored out.⁵

Hang in there. The bull market is maturing; QE2 is ending. We haven’t yet seen a correction, just a pullback. Mays and Junes have brought more than a few of those.

 

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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.

1 – blogs.wsj.com/marketbeat/2011/06/10/were-going-streaking/ [6/10/11]

2 – blogs.wsj.com/marketbeat/2011/06/10/q2-earnings-and-revenue-estimates-remain-upbeat/ [6/10/11]

3 – smartmoney.com/invest/stocks/why-the-market-worrywarts-are-wrong-1307117379674/ [6/3/11]

4 – ism.ws/ISMReport/NonMfgROB.cfm [6/3/11]

5 – online.wsj.com/article/SB10001424052702304563104576361522020024248.html [6/4/11]

6 – montoyaregistry.com/Financial-Market.aspx?financial-market=money-and-happiness&category=29 [6/12/11]

Weekly Economic Update, June 13, 2011

NEW BEIGE BOOK SHOWS GROWTH MODERATING
At last week’s International Monetary Conference, Federal Reserve Chairman Ben Bernanke conceded that the pace of the recovery had become “frustratingly slow.” While the Fed’s latest Beige Book showed solid economic growth in eight of 12 Fed districts (with growth accelerating in the Dallas region), growth had moderated in the Philadelphia, Atlanta, Chicago and New York districts. Broadly, the Fed snapshot revealed some slowdown in manufacturing but steady service sector expansion.¹

2-YEAR NOTES NOTCH 9-WEEK WIN STREAK
This hasn’t happened since February 2008. The yield on the 2-year Treasury fell to 0.40% and the yield on the 10-year note slipped to 2.97% Friday, even with the sunset for QE2 on the horizon. Friday, the Fed said it would end that bond-buying program by purchasing $50 billion in Treasuries by the end of the month.²

Mortgage RATES EASE FOR EIGHTH STRAIGHT WEEK
Freddie Mac’s latest Primary Mortgage Market Survey estimates the average interest rate on a 30-year fixed-rate mortgage at 4.49%, compared to an average of 4.72% across 2010. Rates on the 15-year FRM averaged just 3.68% in the June 9 survey.³

GOLD, SILVER & OIL PRICES DECLINE
Gold prices slipped 0.5% last week, ending three weeks of advances; the good news is that gold is up roughly 5% over the last five weeks. Silver prices dropped 3.2% Friday to $36.32 per ounce on the COMEX. Oil lost 0.9% last week, aided by Saudi Arabia’s move to ramp up production for customers in Asia; prices settled Friday at $99.29 per barrel on the NYMEX.^4,5

LITTLE ENTHUSIASM FOR STOCKS
The Dow closed under 12,000 Friday; its losing streak now stands at six weeks. (We have four weeks until the next earnings season.) The performances for June 6-10: DJIA, -1.64% to 11,951.91; NASDAQ, -3.26% to 2,643.73; S&P 500, -2.24% to 1,270.98.⁶

THIS WEEK: Nothing major is scheduled for Monday. Tuesday, we have the May PPI and government reports on May retail sales and April business inventories. The May CPI is released on Wednesday along with data on May industrial output. On Thursday, we have the latest initial and continuing claims reports from the Labor Department and the report on May housing starts from the Census Bureau. Friday brings the Conference Board’s May index of leading indicators and the University of Michigan’s preliminary June consumer sentiment survey.

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 6/10/11^6,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

---

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The 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 Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx^®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 – marketwatch.com/story/growth-slowing-in-four-of-12-districts-beige-book-2011-06-08?dist=countdown [6/8/11]
2 – bloomberg.com/news/2011-06-10/treasury-yields-near-2011-low-on-prospect-fed-to-keep-interest-rates-low.html [6/10/11]
3 – online.wsj.com/article/SB10001424052702304259304576375700263962290.html [6/10/11]
4 – reuters.com/article/2011/06/10/us-markets-precious-idUSTRE7592IU20110610 [6/10/11]
5 – cnbc.com/id/43347432/ [6/10/11]
6 – cnbc.com/id/43358833 [6/10/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F10%2F10&x=0&y=0 [6/10/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F10%2F10&x=10&y=18 [6/10/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F10%2F10&x=0&y=0 [6/10/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F9%2F06&x=0&y=0 [6/10/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F9%2F06&x=0&y=0 [6/10/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F9%2F06&x=0&y=0 [6/10/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F11%2F01&x=0&y=0 [6/10/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F11%2F01&x=0&y=0 [6/10/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F11%2F01&x=0&y=0 [6/10/11]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/10/11]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/10/11]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]
10 – montoyaregistry.com/Financial-Market.aspx?financial-market=money-and-happiness&category=29 [6/12/11]

Auto-Enroll 401(k)s

More companies are offering them. Will they fix our retirement savings blues?

The trend could become the norm. Human resources firm Aon Hewitt surveyed 120 large U.S. companies in 2010 and found that 60% of them automatically enrolled workers in defined contribution retirement plans such as 401(k)s. In Aon Hewitt’s 2006 survey, only 24% of companies had bothered to do so.¹

Does automatic enrollment lead to plan participation? It seems to greatly encourage it. The Aon Hewitt study found that 85.3% of auto-enrolled workers were participating in the retirement plans, bringing overall defined contribution retirement plan participation to 75.8% of the workforce.¹

It may encourage growth investing. When you auto-enroll in a 401(k), you are often presented with a suggested asset allocation including target-date funds. Younger plan participants seem to be embracing this choice and ramping up their ownership of equities. A new Vanguard study shows that equity allocations for the typical 20-year old plan participant went from 40.7% to 84.7% between 2003 and 2010, and there was also a notable increase in equity ownership for plan participants aged 20-30 in that period. Last year, 61% of Vanguard plans offered workers default investment choices; 89% of these plan sponsors picked target-date funds as the default choice.²

Are the set contribution rates too low? Aon Hewitt found that 76% of auto-enroll plans had set contribution rates of 4% or less. This automation might be a hindrance: while employees in the auto-enroll plans deferred an average of 6.8% of their pay, workers who had actively enrolled in their company retirement plans put 7.8% of their salaries away.²

Will we see auto-IRAs? In 2010, President Obama proposed requiring any employer in business for more than two years with 10 or more employees to sponsor direct-deposit Roth IRAs, with 3% of employee salaries going into the accounts. The National Small Business Association (NSBA) called the idea “unfair” to small businesses and “very problematic”. No momentum seems to be building for its revival.³

Is automatic enrollment “the answer”? Workers need to save more for retirement, and auto-enroll 401(k)s at least force them to be acquainted with the awesome potential of these retirement savings vehicles. The Aon Hewitt study seems to show a path from enrollment to interest to investment.

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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 – ir.aon.com/phoenix.zhtml?c=105697&p=irol-newsArticle_print&ID=1567166&highlight= [5/24/11]
2 – blogs.smartmoney.com/encore/2011/05/26/a-retirement-savings-cure-all [5/26/11]
3 – shrm.org/hrdisciplines/benefits/Articles/Pages/AutoIRAs.aspx [2/3/10]
4 – montoyaregistry.com/Financial-Market.aspx?financial-market=401k-companies&category=2 [5/30/11]

Weekly Economic Update, June 6, 2011

HIRING TAPERS OFF IN MAY
Wall Street braced itself Friday for a subpar jobs report, and that was what arrived. Non-farm payrolls grew by just 54,000 in May – and if McDonald’s hadn’t added 62,000 fast-food positions last month, net hiring would have been negative. Payrolls had expanded by an average of 220,000 positions a month in the previous three months of data. The unemployment rate ticked north to 9.1% in May; the percentage of people without a job for six months or longer rose to 45.1%, nearly a record.^1,2

ISM: Some GOOD NEWS, SOME BAD NEWS
The Institute for Supply Management’s manufacturing sector index slipped a troubling 6.9% to 53.5 for May. However, ISM’s service sector PMI rose 1.8% in May to 54.6, and new orders increased by 4.1%. Expansion continues in both sectors.³

YEAR-OVER-YEAR HOME PRICES RETREAT
The newly released March edition of the S&P/Case-Shiller Home Price Index found home prices across 20 metro areas down 3.6% from March 2010. Overall, prices were 33.1% below the index’s peak in July 2006 and at levels last seen during the middle of 2002.^4,5

CONFIDENCE FALTERS
The Conference Board Consumer Confidence Index came in at 60.8 for May, notably beneath the 66.0 reading for April. The poll’s Expectations Index decreased to 75.2 from April’s 83.2 reading.⁶

A DOWNDRAFT ON WALL STREET
A major selloff last Wednesday contributed to the Dow extending its losing streak to five weeks. Here was how it went during the four market days from May 31-June 3: DJIA, -2.33% to 12,151.26; S&P 500, -2.32% to 1,300.16; NASDAQ, -2.29% to 2,732.78. The Dow has not had a five-week losing streak since July 2004.⁷

THIS WEEK: The calendar is pretty light. Monday, Treasury Secretary Timothy Geithner speaks at the International Monetary Conference in Atlanta. Tuesday afternoon, Federal Reserve Chairman Ben Bernanke speaks at the same event. The Fed puts out a new Beige Book on Wednesday. Thursday, Wall Street will watch the Bank of England and the European Central Bank as both will have announcements on interest rates; a report on April wholesale inventories also comes out. No major economic releases are scheduled for Friday.

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 6/3/11^7,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

---

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The 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 Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 – latimes.com/business/la-fi-jobs-report-20110604,0,3594048.story [6/3/11]
2 – cnbc.com/id/43267992 [6/3/11]
3 – ism.ws/ISMReport/NonMfgROB.cfm [6/3/11]
4 – nj.com/business/index.ssf/2011/06/home_prices_at_lowest_point_si.html [6/1/11]
5 – abcnews.go.com/Business/housing-prices-double-dip-downward-spiral/story?id=13723919 [5/31/11]
6 – conference-board.org/data/consumerconfidence.cfm [5/31/11]
7 – cnbc.com/id/43272370 [6/3/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F3%2F10&x=0&y=0 [6/3/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F3%2F10&x=10&y=18 [6/3/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F3%2F10&x=0&y=0 [6/3/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F2%2F06&x=0&y=0 [6/3/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F2%2F06&x=0&y=0 [6/3/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F2%2F06&x=0&y=0 [6/3/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F1%2F01&x=0&y=0 [6/3/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F1%2F01&x=0&y=0 [6/3/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F1%2F01&x=0&y=0 [6/3/11]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/3/11]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/3/11]
10 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]
11 – montoyaregistry.com/Financial-Market.aspx?financial-market=money-and-happiness&category=29 [6/5/11]

Weekly Economic Update, May 31, 2011

CONSUMER SPENDING SLOWS IN APRIL
Personal spending and personal incomes both increased by 0.4% last month – but the inflation-adjusted gains were minimal or non-existent. With inflation factored in, personal spending rose by 0.1% in April while personal incomes were flat. These latest numbers out of the Commerce Department aren’t very inspiring, especially since April’s small gains can be attributed to higher gas and food prices. However, many economists believe things will pick up in coming months, assuming gas prices moderate and more jobs appear.¹

EXPECTATIONS IMPROVE IN KEY CONFIDENCE POLL
The final May consumer sentiment survey is in from the University of Michigan. At 74.3, it shows a nice rebound from the final 69.8 mark for April. It also surpassed the 72.5 reading forecast by economists polled by MarketWatch. The 2011 high for the survey – 77.5 – was recorded in February before gas prices soared.²

MIXED NEWS FROM THE REAL ESTATE SECTOR
The Census Bureau said that new home sales improved by 7.3% in April. (Sales were 23.1% below the tax credit-influenced levels of a year ago.) The National Association of Realtors noted a dip in pending home sales: they fell 11.6% in April.^3,4

DEMAND LESSENS FOR HARD GOODS
Durable goods orders fell 3.6% in April, much more than the 2.5% slip anticipated by economists surveyed by Bloomberg News. Minus the volatile transportation category, hard goods orders still decreased by 1.5%.⁵

INVESTORS LEFT COLD BY TEPID INDICATORS
The latest economic reports suggest that the economy is going through a soft patch. They didn’t exactly trigger a wave of buying on Wall Street. Stocks pulled back for the fourth straight week, as follows: DJIA, -0.56% to 12,441.58; S&P 500, -0.16% to 1,331.11; NASDAQ, -0.23% to 2,796.86. One bright spot to note: the CBOE VIX retreated 8.15% for the week.⁶

THIS WEEK: Monday was Memorial Day, so U.S. financial markets were closed. Tuesday offers the latest edition of the S&P/Case-Shiller home price index and the Conference Board’s May snapshot of consumer confidence. June begins Wednesday, when we have the ISM May manufacturing index and a report on April construction spending. Thursday brings the latest initial claims figures and data on April factory orders. Friday is big – the April unemployment numbers are released and the ISM service sector index for May arrives.

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 5/27/11^6,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

---

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The 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 Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx^®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 – cnbc.com/id/43196816 [5/27/11]
2 – marketwatch.com/story/consumer-sentiment-rises-in-may-2011-05-27 [5/27/11]
3 – census.gov/const/newressales.pdf [5/24/11]
4 – seattlepi.com/realestate/article/Home-sales-deals-fall-in-nation-Seattle-area-1398967.php [5/27/11]
5 – dailyfx.com/forex/market_alert/2011/05/25/052411_US_Durable_Goods_Fall_Most_in_Six_Months.html [5/25/11]
6 – cnbc.com/id/43198036 [5/27/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F27%2F10&x=0&y=0 [5/27/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F27%2F10&x=10&y=18 [5/27/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F27%2F10&x=0&y=0 [5/27/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F26%2F06&x=0&y=0 [5/27/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F26%2F06&x=0&y=0 [5/27/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F26%2F06&x=0&y=0 [5/27/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F25%2F01&x=0&y=0 [5/27/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F25%2F01&x=0&y=0 [5/27/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F25%2F01&x=0&y=0 [5/27/11]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/27/11]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/27/11]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]
10 – montoyaregistry.com/Financial-Market.aspx?financial-market=401k-companies&category=2 [5/30/11]