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"An
optimist stays up until midnight to see the new year in.
A pessimist stays up to make sure the old year leaves."
~ Bill Vaughn
The Markets
STOCKS SLIDE ON LAST DAY OF 2007, BUT
INDEXES POST ANNUAL GAINS
Wall Street closed out a bumpy 2007 on a down note as
the Dow Jones Industrial Average fell 101 points on the last
day of the year. However, solid first-half advances enabled
the Dow to post a respectable 6.4% annual gain. Significantly,
the Dow recorded the increase in spite of its worst fourth-quarter
drop in two decades. The Standard & Poor’s 500
Index and the Nasdaq Composite Index also took hits on December
31, but still managed to post annual gains. The S&P 500
fell 10.13 points to close the year with a gain of 3.5%.
The Nasdaq fell 22.18 points to post a 9.8% annual gain,
its best since 2003.
WHAT IS AHEAD FOR 2008?
Well, things
didn’t start out too well the first week
of this year. On the first trading day, the Dow had its largest
opening day of the year drop since 1983. It should be noted,
however, that the Dow went on to rise more than 20% in 1983—will
we see a repeat? Weak employment news from the Labor Department
and a contraction in manufacturing from the Institute for
Supply Management sent the major indexes down for the week.
Of course, three trading days does not make a trend. We have
more than 200 to go before the books
will be closed
on 2008.
| Returns through 12/31/07 |
1-Year |
3-Year |
5-Year |
10-Year |
| Dow Jones Industrials |
6.4 |
7.1 |
9.7 |
5.3 |
| Nasdaq Composite |
9.8 |
6.8 |
14.7 |
5.4 |
| Standard & Poor's 500 |
3.5 |
6.6 |
10.8 |
4.2 |
Source: Yahoo! Finance, Barrons
Past performance is no guarantee of future results. Indices
are unmanaged and cannot be invested into directly. Three-,
5-, and 10-year returns are annualized. Assumes dividends
are not reinvested.
Food Isn’t Cheap Anymore
Have you noticed that your grocery bill has been climbing?
It may go even higher.
Since spring of 2007, world wheat prices
have doubled and many other crops are commanding peak
prices. That’s
great for farmers, but not so great for consumers. In America,
the Consumer Price Index, a broad gauge of inflation, showed
that food costs were up almost 6 percent for the first nine
months of 2007, with the food inflation pace at a 25-year
high.
None of us are accustomed to rising food
prices—from
1974 through 2005, the cost of food (after inflation) fell
by three-fourths, according to The Economist. Unfortunately,
the downward trend appears to have shifted and higher prices
may be around for a while.
Why has food gotten more expensive?
There are many reasons for higher food prices. According
to the U.S. Department of Agriculture, just 19 cents of
every dollar that American consumers spend on food goes
to farmers. The other 81 cents pays for labor, fuel, transportation,
packaging, and other costs. As a result, higher fuel prices
have contributed to price increases. In addition, economists
say that water shortages and increased production of bio
fuels like ethanol, which is made from corn, are to blame.
Finally, demand in emerging countries, where consumers’ discretionary
incomes are increasing, is helping to drive prices higher.
Three
ways to keep your grocery bill under control
If higher food prices are interfering with your budget,
it may be a good time to develop some strategies for
keeping your grocery bill from taking an even bigger
bite out
of your pocketbook.
- Rethink convenience foods
It’s true. Frozen, pre-packaged and ready-made
foods can make meal preparation much easier. However,
the price
you pay can be significant. If you have time, cooking
from scratch can save a lot of money. When you plan
a meal, consider
whether you can do without prepared items that you may
normally include. Chopping vegetables and ripping lettuce
for salads
add just a few minutes of prep time.
When you have time
to do it, prepare meals on weekends and freeze them for
later in the week. If you’re making
spaghetti sauce or a casserole, double the recipe and
freeze one. Preparing dinner in a slow cooker is another
way to
avoid the need for pre-packaged food.
- Clip
some coupons
Coupon clipping is a time-honored tradition that has
saved Americans billions of dollars on grocery, healthcare,
and other bills. The Promotion Marketing Association’s
Coupon Council found that American consumers saved
about 11.5% on their grocery bills during 2006 by
using coupons.
There are lots of places to look for
coupons: the Sunday newspaper, coupon books, magazines,
and flyers
in the mail.
You should also take advantage of the coupons that come
with your receipt at the grocery store. If you are comfortable
online, you can register for reward and coupon programs
that provide members-only coupons. If you would like to
learn more about finding and using coupons effectively,
visit these websites: www.couponmonth.com or www.thegrocerygame.com.
One caution: Don’t get so carried away by the discounts
offered that you buy products you won’t use.
- Volunteer
at SHARE
Anyone who wants to save money on food, and help their
community at the same time, can volunteer at SHARE.
As a non-profit
food buying club, SHARE offers groceries at a reduced
cost through a volunteer-run, community-based distribution
system. Volunteers spend a couple of hours each week
helping to sort, package, and distribute food. In return,
they
can place orders through SHARE and realize savings themselves.
Saving
money at the grocery store requires a strategy, some time,
and discipline, but anyone can do it!
Can you unscramble these wine names?
1. Mfue Lnabc
2. Nopti Rnio
3. Lemtro
4. Ginslire
5. Lemsoel
6. Fizldenan
7. Bislcah
8. Nicneh Nabcl
9. Nebterca Govsauinn
10. Mervtuho
Click here for the answer.
Best Regards,
P.S. Please feel free to forward
this newsletter to family, friends, or colleagues.
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