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The Economy is slowly recovering through rebounding consumer confidence, but U.S. unemployment remains high at 9.6%2 (7.6% WI, 7.5% Fond du Lac). Unfortunately, from a historical perspective, labor tends to be one of the last areas to recover during recessions. The debt situation is still problematic with U.S. government debt rising at levels not seen since World War II.3 That deficit will ultimately cause higher taxes across the economy making tax-beneficial registrations (Roth/ Traditional IRAs) potentially even more valuable in years to come. Some positive recovery indicators seen over the past three quarters include continued low interest rates, price stability and solid corporate earnings.
Markets: The S&P 500 Index hit its highest point in history on 10-9-2007 and then bottomed on 3-9-09, -56% (a 13-year low). Since then, the market rallied significantly gaining +76.8% from its low.4 As of 8-20-10, that gain has been pushed down to +73.9% from its 2009 low. We expect more volatility of this nature to continue over the next 1-3 years and potentially one or more corrections as conditions quietly improve. Almost all areas across the globe have benefited from the turn-around, with smaller stocks and smaller economies leading the rebound.
Investment Strategies: If you have concerns over your portfolio here or accounts at other institutions (401k, 403b, etc.) please take some time out of your busy schedule so we can address the risk versus return and volatility of your portfolio. We could also review Roth IRA Conversion options that are available in 2010. This is especially important if you haven't sat down with one of us in the past year. That review can help access any specific questions or strategies that you may wish to go over or strategies that we are using that you may not be aware of.
For those nearing retirement or those who have had job changes in the past few years, current and former employer 401(k) accounts should also be reviewed at that time. Many plans allow for age 59 1/2 In-service 401(k) Rollovers which allow for more investment choices.1 In our opinion, more active risk management is vital due to the lack of advice most receive on these accounts.
Investors who have stepped up their IRA contributions within the past couple of years have benefited from buying when the market is low and when fear is high. If you have earned income, check your budget and try to squeeze an additional $25-50 per month into your IRA's using an automatic purchase from your checking or savings account.
With CDs and money market interest rates at historically low rates, let us know if you are looking for alternatives. As always, if you have friends or relatives that need any of our services, we appreciate your referrals.

Retirement account distributions are either taxable or not taxable (Roth IRA). Annuity distributions are fully taxable on the earnings only. Indices are unmanaged measures of market conditions and are not possible to invest into directly. Past performance is not a guarantee of future results. The performance information provided herein has not been verified or audited by NPC for accuracy. The calculations do not comply with Association for Investment Management and Research (AIMR) standards and should be used only as a general guide to performance. Investment decisions should be based on an individual's goals, time horizon and tolerance for risk. 1Restrictions specific to each plan should be carefully reviewed with a financial professional prior to making a decision. 2WI Dept. of Labor, 10-2010. 3Littman Gregory 1-10. 4Netxpro.com.