Market Commentary March 19,2009

MARCH 19, 2009

Unexpected news from the latest meeting of the Federal Reserve drove the stock market higher on Wednesday,

pushing the rebound in the Dow Jones Industrials and the S&P 500 indexes up close to 15% from their 12-year

lows only a week or so before. The volume of trading, heaviest for the year, contributed new hope to some

investors that the rally was a sign that the bottom of this market downturn had been established. They also point to

other economic indicators over the past week that at least things were becoming “less bad”; the needed signals

before hope for recovery can begin. Some data suggest retail sales, home building and manufacturing were

declining more slowly. Because the stock market can be an early indicator of the economy’s direction, those

waiting to see jumped at the chance for some kind of positive news.

The recent Fed announcements were initially seen as further help for those areas that remain the keys to getting

things straightened out --- the credit system and housing. Reaffirming their support for the many independent

Treasury programs, the Fed’s actions to push more money into the system are primarily meant to drive interest rates

lower for all parts of the economy. By buying Treasury bonds from the market, the Fed reduces the attractiveness of

the bonds returns, making investing and lending to other riskier businesses and individuals more attractive for

banks. In essence, it will help to free up the still clogged lending machinery. The housing market should be a

particular beneficiary as mortgage rates are tied most closely to the 10-year Treasury rates. It could be an important

help if first day results are an indication. On the Fed news the Treasury bond yield dropped to approximately 2.5%

from 3.0%, while the 30-year fixed mortgage rates fell to 4.75% from over 5.0%. 1

The Fed’s bold action, although discussed by analysts as a possibility for months, was seen more negatively by

some; as a need for more urgent action to turn the economy. Gold rose and the dollar fell. If the economy remains

weaker than expected, the market’s rebound could be temporary. However, for many investors, while it may take

longer, the action is further encouragement that the Treasury and the Federal Reserve continue to support each

other in solving the basic problems. Market movements will likely continue to be tied to developments in

Washington and could remain quite volatile in the short-term.

1

Wall Street Journal, 3/19/09

Prepared by: Martin J. Cosgrove, CFA, Director of Investment Research

Research Department/ING Advisors Network

The views are those of Martin Cosgrove, Director of Investment Research, Research Department, ING Advisors

Network, and should not be construed as investment advice. All information is believed to be from reliable

sources; however, we make no representation as to its completeness or accuracy. All economic and performance

information is historical and not indicative of future results. Investors cannot invest directly in indices. Please

consult your financial advisor for more information.

While diversification may help reduce volatility and risk, it does not guarantee future performance.

ING Financial Partners, Inc, its affiliates and subsidiaries and/or their officers and employees may from time to

time acquire, hold or sell a position in the securities mentioned herein.

"Securities offered through ING Financial Partners, member SIPC."

Corban Financial and Insurance Services, Inc.

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Phone (626)330-4050

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Travel Through...

Despite the recent swell of intense summer heat, we are steadily approaching autumn, accompanied by the greatly anticipated holiday season.

Crimson apples enrobed in chewy caramel. Wet stockings set to dry beside a blazing fire. Foggy, grey days and golden leaves crackling underfoot—these are the images that, for me, are evoked by the holidays. For others however, this time of year may also herald emotions of acute anxiety. There are those who luxuriate in staying put to visit family and check off to-do lists—but there are also those who travel a great distance to “go home for the holidays,” or simply ache to “get away from it all,” as far away as possible.

For these folks, the traditional travel spike during Thanksgiving and Christmas may prove to be a mightier roadblock than anticipated, as questions and uncertainties abound.

“Should I book tickets now, or wait for last-minute deals?” “Which airline will be most lenient about flight-change fees? “What’s the best day to fly out for Thanksgiving/Christmas?” And my personal favorite: “50 bucks for an extra carry-on luggage?!”

The best way to combat holiday-induced stress is to, first and foremost, begin EARLY when searching for cheap ticket prices. Remember to compare with different airlines, make quick decisions when regarding sales, and look for alternate travel dates if possible (USAToday). Also, don’t forget to check for lower prices even after you’ve booked your ticket. Oftentimes, the price of a flight may drop after a few days, and it’s possible to get the difference refunded—a commodity offered by Alaska, JetBlue, and Southwest.

The good news? Airfare has decreased considerably from last year. According to MarketWatch, $327 is the national median for a roundtrip ticket during Thanksgiving; this is down 20% from 2008, said Bing Travel.

Personally, I’m finding it enough hassle to make the 2-hour drive down South to San Diego—a trip I’ve been dying to make for the past 2 months.

To be honest, I am quite satisfied with flying out just once—in the middle of December—and staying in sunny Southern California for the remainder of the year. I’ve never had a high tolerance for frigid weather, anyway. Snowboarding on artificial snow in 65 degree weather, here I come!

If you’re not one for staying at home much, however, I leave you with the “Top 5 Off-Peak Destinations for Fall 2009” (USAToday). Enjoy!

By Tiffany Sun

Twenty...

When I think of the number “20,” these are some of the most striking images that come to mind: crisp 20-dollar bills, 20/20 (perfect) vision, Matchbox Twenty—and there’s more, but the list goes on. Recently however, a new “20” has been brought to my attention.

The “G-20,” formally known as the Group of Twenty Finance Ministers and Central Bank Governor is an association of finance ministers and bank governors of 20 countries. Although the title itself is quite a mouthful, their primary objective is simply to better the global economy/financial system.

According to The Economic Times, these officials pledged on Saturday (September 5) to bolster the global economy by sustaining stimulus programs. World markets had feared that countries would withdraw their programs after budding indications of economic recovery, but the G-20 promptly calmed those fears.

Due to their efforts, we watched European and Asian stocks rise an average of 1 percent, said The Economic Times—which signifies optimism on the financial horizon, as we endure “the worst of the most severe financial crisis since the Great Depression of the 1930s” (CNN.com),

CNN Money verifies this bit of heartening news. Stocks have been progressively climbing up for 6 ½ months, they said on Friday, September 18; “Since bottoming at a 12-year low March 9, the S&P 500 has gained 58% and the Dow has gained 50%.”

Now hold on just a minute. The Dow? What is that—some sort of religion? I could see how that might work. It’s not hard to imagine a Dow temple, resting on some distant hill, acquiring a 50% increase of believers.

In reality, the Dow (Dow Jones Industrial Average) is a well-known stock market index that evaluates America’s industrial economy. It, along with the NASDAQ Composite and the S&P 500 Index, is one of the most scrutinized indices tracing stock proceedings.

When I worked as an intern in Washington, D.C., I was placed alongside our Virginia County reporter. He was very helpful, albeit slightly intimidating, and frequently entertained our corner the newsroom with droll remarks—and every morning, without fail, he would comment on how much the Dow had dropped.

But it seems that those days will soon be over. Federal Reserve Chairman Ben Bernanke gave us another snippet of good news on Tuesday. “The worst recession since the 1930s is probably over,” he said. However, he made sure to remind his audience “pain—especially for the nearly 15 million unemployed Americans—will persist” (USA Today).

By Tiffany Sun

Birthday party 529 plan funding

Parents let's get real about life does your child really need more toys. How about encouraging your friends and family to fund your education plan. $10-$20 goes a long way especially when 20 to 30 people fund it. Most of the times kids will want 30 toys but sometimes the smart thing to do might be funding your kids education fund. Providing them with two to three toys might be the answer. We have advised our clients to do this and it has been a pretty successful way to fund the child's education. Give a gift that will last a lifetime!

ID Theft is the number #1 crime

Just a quick word on the recent identity theft scandal:

On August 17, 2009, officials declared the most significant case of credit and debit card theft in the history of the U.S., said the Associated Press. 130 million credit accounts had been swiped, in addition to over 40 million credit and debit cards previously stolen and sold in 2008.

Albert “Soupnazi” Gonzalez, previously an informant for the U.S. Secret Service, is the man on whom we pin the responsibility for this crime. According to MSNBC, Gonzalez broke his own record for I.D. theft by hacking into the retail networks 7-Eleven, Inc., Hannaford Brothers, Co. Inc., and Heartland Payment Systems (New Jersey). If convicted, Gonzalez faces a life sentence.

It is suspected that Gonzalez worked closely with eleven others in order to execute this crime. The eleven face charges that will include “conspiracy, fraud, and identity theft,” said ABC News. Part of their scheme involved hacking into the wireless networks of major retail companies, as well as what is commonly referred to as “war driving.”

In essence, “war driving” entails driving around with a laptop computer, browsing for open wireless networks. The moment hackers are able to uncover a particularly weak one, they install “sniffer programs,” which detect credit and debit card numbers.

The details of this crime are well nigh worthy of being written as the storyline for next summer’s movie blockbuster. If I were to create the tagline, it’d probably sound something like this:

“11 madcap hackers. 9 retail giants. One leading mastermind. The theft that changed history.”

…But perhaps it’s best I’m not pursuing a career as a movie tagline writer.

According to Kevin Mitnick, infamous ex-hacker now turned security consultant, the total cost of the thefts is substantial and could potentially result in damage in the millions (NY Daily News).

“They got in major brands, which shows the vulnerability on the Internet,” Mitnick added.

Personally, I’m already paranoid enough, even when it comes to punching in PIN numbers at the supermarket. But according to the AP, “restaurants are among the most common targets for hackers, experts said, because they often fail to update their antivirus software and other computer security systems.’ With this and the recent ID theft case, I think I’ll be twice as vigilant when it comes to giving out information.

Managing Debt!

When it comes to managing personal finances, many of us hesitate to launch into what we anticipate to be a dull and grueling process.

Thankfully, personal-finance pundit Andrew Tobias, author of The Only Investment Guide You'll Ever Need (2005), -I'll include a link here- has condensed the procedure into three simple steps:

1. Destroy all your credit cards.

2. Invest 20% of all that you earn. And never touch it.

3. Live on the remaining 80%, no matter what.

Implausible as these steps may may seem, Tobias has a point - and many consumers seems to agree (ABC News). Credit cards are currently not as trendy as they once were, what with credit limit cutbacks, high interest rates and all the repercussions that come with owning one. Or three.

But let's get serious. I personally do not wield an expansive knowledge of budget management, but I know enough to recognize the call to "destroy all credit cards" as a bit of a stretch. Perhaps a more practical method would be to leave your credit card(s) at home--this way, the temptation to use them would be highly curtailed.

Besides, splitting the lunch bill with friends would be significantly less troublesome. None of this "separate checks" nonsense! Simply pay your share in cash, and save everyone--including the server--from severe headaches.

Speaking of avoiding difficult circumstances, I recently learned a lot from a good friend of mine. He was offering financial advice to a recently graduated high school senior deciding whether or not to attend UCI (University of California, Irvine). The graduate had already been accepted, but was wrestling with the fact that, not being a resident of California, he had to pay much more. He was toying with the idea of attending UCI for a year, and then transferring to a junior college if he wasn't satisfied. Giving me a wry look, my friend suggested attending junior college BEFORE a university. He proposed only the most appealing aspects of such a choice, focusing on cheaper tuition, housing, and transportation.

"It wouldn't make much sense for you to waste thousands of dollars, when you could transfer to any university in the country once you've completed your general education requirements," he said. Ultimately, I think he had the high school graduate convinced.

For step two, merely one simple phrase is necessary: "the magic of compound returns." 

I'm not yet a passionate advocate of this investment guide, but Tobias certainly knows how to make an argument. With the achievement of steps one and two, step three can come about quite painlessly. And then, by slowly scaling down your expenses and reducing spending will save you hundreds of white hairs in the future.

By Tiff Sun