November 2008
Issue: 63
Welcome
 
Greetings!

We have never seen a surge in the monetary base like we are witnessing today. On October 29, the Federal Open Market Committee lowered the Fed Funds Rate to 1%. This process created a title wave of liquidity. It's the equivalent of a rich relative dumping buckets of money at your doorstep, with a sign attached that says "Help Yourself". Year over year, the monetary supply is up by 48%. Unprecedented.

Money is used in most economic transactions. Increased money supply works by lowering interest rates, and putting more money in the hands of consumers. It creates investment. It makes consumers feel wealthier, which increases spending. It doesn't happen overnight. But as it unfolds businesses will respond to their increased sales by ordering more raw materials and increasing production. The spread of business activity increases the demand for labor and raises the demand for capital goods. Stock market prices will eventually begin to rise.

Over the last 82 years, the market has had positive returns 72% of the time. It has been down greater than 20% only 5 times. Markets typically post a 25% return in the 12 months following a correction.

From December 31, 1997 until December 31, 2007 the S&P 500 realized a cumulative return of 77.56%. But, if you were out of the market the results would be different.
  • If you missed the 10 best days of the market your annualized returned would have been: 1.12%
  • If you missed the 20 best days of the market your annualized returned would have been: (2.55%)
  • If you missed the 30 best days of the market your annualized returned would have been: (5.72%)
If you'd like to talk, give us a call.

Feel free to share this email with others.

Forward to a Friend


Time to Share. Create a Buzz.

"How much is this home really worth?"  Zillow calculates a ZestimateŽ home valuation as a starting point for anyone to see - for free - for most homes in the U.S. This service does not replace the expertise and experience of real estate agent however you sure can have fun looking up what you house might be worth...or maybe even your neighbors house. Zillow.com is an online real estate service dedicated to helping you get an edge in real estate by providing you with valuable tools and information.


Good news! Past issues of the WH Cornerstone Newsletter are available for your reading enjoyment. Read them today.

Plus, check out the WH Cornerstone Blog.

Investors' 5 biggest mistakes

The market starts tanking, so you panic and want to get out. You've added to your 401(k) for a few years and think it's enough. What other stupid ideas are on your mind?

Read on...

In This Issue
Investors' 5 biggest mistakes
Saving more through your 403(b) plan
Saving more through your 457(b) plan
A bear market history lesson
Stretch charitable dollars during this giving season
Fact or fiction: household remedies
About us
Saving more through your 403(b) plan

Known as one of the best lines of defense in planning for a comfortable retirement, 403(b) plans can be a powerful way to save. A recent tax law made gave permanent status to some important changes to 403(b)s that allow you to save more, consolidate retirement plan accounts and make up for lost time with extra contributions.

Read on...

Saving more through your 457(b) plan

In 2008, the regular pre-tax contribution limit is $15,500. After 2008, these contribution limits may be increased to factor in the effects of inflation.

Bottom line? If you haven't saved as much as you'd like, now's your chance.

Read on...

A bear market history lesson

It's easy to feel panicked in this kind of market. But history holds some valuable lessons. Here's some perspective.

Read on...

Eight smart tips to stretch charitable dollars during this giving season

With turmoil on Wall Street causing many to wonder how they can continue to support their favorite charities, Schwab Charitable released a series of tips to help donors stretch their charitable budgets -- even in tough economic times.

Read on...

Fact or fiction: household remedies

We've heard them, we've repeated them, and in some cases we even swear by them -- but do the household remedies we learned at Grandma's knee really work? The Good Housekeeping Research Institute staff put them to the test. Here, once and for all, are the surprising answers.

Read on...
About us

WH Cornerstone Investments, LLC provides wealth management services to a select group of clients. Regardless of their background or future vision, all of our clients commit to a plan that targets their long-term financial growth and stability. While some of our clients concentrate on one part of their investment strategy, others opt for a more holistic approach.

WH Cornerstone clients demand customized objective, expert advice, which they know can come only from a firm that is truly independent-a firm not tied to financial institutions. As an independent Registered Investment Advisory firm, we are completely fee-only and therefore free from any outside institutional influence.

Cheers
,

Paula Harris and Bill Harris, CFP
WH Cornerstone Investments
781.934.9154
www.whcornerstone.com