By:  Kristin Guenthardt, WMS - Associate Vice President, Investments- Raymond James & Associates

On April 12, 2010 the market surpassed an important psychological barrier - the Dow Jones Industrial Average (an unmanaged index of 30 widely held stocks) closed above 11,000.  This was the first time the market had closed at this level since September 2008.  And while the 11,000 mark isn’t important in and of itself, it’s not entirely insignificant either. This is, after all, nearly 4,500 points above the 6,547 low that the Dow reached in March 2009, an increase of 68.1%, which serves as a testament to what investors believe is a recovering economy.

Behind the more or less steady rise of the market indices since early February are upbeat signs that the economy is recovering, though at a slower pace than most of us would like. There are positive job growth indicators, and new applications for jobless benefits fell by 24,000 in the week ended April 17.

Investor worries about Greece possibly defaulting on its national debt eased with the announcement that the other 16 countries that use the euro agreed to a $40.5 billion loan, and Greece’s call on Friday for the activation of a financial lifeline sparked a rally in both the Greek stock and bond markets.

There has also been some encouraging news from the real estate sector lately.  In March, purchases of new homes surged 27%, the most in almost five decades, and sales of previously owned homes rose for the first time in four months, climbing 6.8%, as buyers rushed to qualify for a government tax credit.    

It is reassuring that the markets are headed up instead of in the other direction, but remember that it is best to stick with investment fundamentals, and your long-term assessment of the value of the holdings in your portfolio, rather than focusing on arbitrary market benchmarks.

Investing involves risk, and investors may incur a profit or a loss. Past performance is not an indication of future results. Investors cannot invest directly in an index.

Kristin Guenthardt
Wealth Management Specialist
Associate Vice President, Investments
Retirement Plan Consultant

One Progress Plaza
Suite 165
Saint Petersburg, FL 33701
Phone: 727-896-0848

http://www.raymondjames.com/Kristin/