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“It’s only when
the tide goes out that you learn who’s been swimming
naked.”
-Warren Buffett
The Markets
Ah, summer. A time for relaxing,
a time for parties, and a time for Wall Street rollercoasters.
We'll keep things brief so you can enjoy the lighter side
of summer.
Last week’s
two percent drop in the stock market, as measured by the
S&P 500
index, was not pretty. Lingering concerns over subprime lending
woes and rising interest rates were frequently cited
as the culprits. The Bear Sterns
hedge fund problems increased fears that the problems will
spread and that there
will be forced write-downs of mortgage backed securities. Wall
Street ended the volatile week with a sharp decline on Friday.
High energy prices could translate to accelerating inflation
-- which investors fear the Fed may use as a reason to raise
interest rates
later in the year. The Fed is scheduled to meet this Wednesday
and Thursday.
| Returns through 06/22/07 |
1-Week |
Y-T-D |
1-Year |
3-Year |
5-Year |
10-Year |
| Dow Jones Industrials |
-2.1 |
7.2 |
21.6 |
8.7 |
7.6 |
5.8 |
| Nasdaq Composite |
-1.4 |
7.2 |
22.0 |
9.1 |
12.1 |
6.1 |
| Standard & Poor's 500 |
-2.0 |
6.0 |
20.7 |
9.8 |
8.6 |
5.5 |
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.
The inaugural High School Graduate Survey conducted by
Monster provides insights about graduates'
motivation and hard work. Two-thirds of those responding already have work
experience
under their belts.
What’s more, three-fourths of students continuing on to college plan
to work while they pursue their studies.
For these working eager beavers,
the Roth IRA is a sure fit—even if they’re in high school. Consider
this. If a 15 year-old works bagging groceries at the local grocery store
and contributes $1,000 into a Roth IRA each year until age 65, with a 9%
return, he would accumulate more than $800,000. That’s not a bad deal
considering he would have invested only $50,000.
In what might be wishful thinking, the Monster survey also
finds that 80 percent of students preparing for college plan to utilize scholarships.
Forty-eight
percent will rely on their parents and 46 percent will use their own income
as the primary means for tuition bills. Additionally, nearly 75 percent
of students plan to rely upon Federal financial aid assistance, while
34
percent
will look to private student loans to handle the rapidly increasing cost
of higher education.
Is that realistic? In “Trends in student Aid 2006,” the
College Board reports that almost two-thirds of full-time students receive
grant aid.
Additionally, millions of students benefit from federal tax credits
and deductions for college tuition.
In the 2005 to 2006 academic year, postsecondary students
received a total of $134.8 billion in student aid from federal and state governments,
colleges
and universities, and other private sources. About 44 percent of this
aid was in the form of grants and 51 percent was in the form of Federal
government
loans. Subsidies awarded through the income tax system and work-study
made up the remainder.
However, in each of the federal student aid programs, aid
per student was lower in inflation-adjusted dollars this year than earlier
in
the decade.
Both the total amount of Pell Grants awarded and the average Pell
Grant per recipient decreased this year from last year.
If you know someone planning to apply for aid, you might
suggest they check out a new online tool launched last month by Uncle Sam.
Modeled
on the government’s
official aid application, the Free Application for Federal Student Aid (FAFSA),
the newly launched FAFSA4caster estimates a family’s expected contribution
to college costs and notes whether they will qualify for the federal Pell
Grant program. All you need to get started at www.fafsa4caster.ed.gov is your
child’s Social Security number and your own tax and financial information.
An updated version of FAFSA4caster, due this fall, will include a feature
that estimates how much state and college aid a student might expect to receive.
 24
matches make up the figure shown to the left. Can you
remove 4 of these matches to make 5 squares of equal
size?
The
remaining
squares must be connected.
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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