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nu is the Celtic goddess of plenty, of prosperity.

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Market Commentary January 28, 2013 The Markets


They say that optimism is catching. The performance of markets across the globe last week certainly supported the idea. During the second week of January, there was reason for optimism about the housing market as data showed that housing starts exceeded economists expectations and home construction appeared to be on the rebound. Last week, the National Association of Realtors disclosed that very low mortgage rates, falling unemployment, and one of the most affordable housing markets on record helped make 2011 the best year for home sales since 2007. In addition, earnings season the period of each quarter during which public corporations announce their quarterly earnings to the public moved into high gear. Generally solid corporate earnings drive markets higher. This helped the Standard & Poors 500 Index close above 1,500 for the first time in more than five years. Across the pond, the European Central Bank announced that banks plan to repay 137 billion Euros next week much earlier than many had expected. Markets interpreted the news as a sign that European financial systems may be on the mend. Global stock markets gained strength and the Euro reached its highest level in nearly a year against the U.S. dollar. Interest rates in Italy and Spain, some of the weaker links in the Eurozone economy in recent years, fell significantly during the week offering further evidence that investors optimism and appetite for risk was on the rise.

Data as of 1/25/13
Standard & Poor's 500 (Domestic Stocks) 10-year Treasury Note (Yield Only) Gold (per ounce) DJ-UBS Commodity Index DJ Equity All REIT TR Index

1Week
1.1% 2.0 -1.7 -0.6 1.3

Y-T-D
5.4% N/A -2.0 1.1 5.0

1Year
2.0 0.6 -3.4 18.5

3Year
3.6 14.9 1.3 21.5

5Year
2.5% 3.6 12.6 -5.6 7.4

10Year
5.9% 3.9 16.2 2.0 12.9

13.3% 11.1%

Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barrons, djindexes.com, London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

TRADITIONAL OR ROTH RETIREMENT PLAN CONTRIBUTIONS? A provision of the


American Taxpayer Relief Act of 2012 (ATRA) allows many people with savings in workplace retirement plans to make in-plan Roth conversions. They can move savings from traditional, before-tax 401(k), 403(b), or 457 plan accounts to Roth plan accounts without a distributable event (such as death, disability, or reaching age 59) as long as the employer offers both options.

Traditional contributions In general, traditional contributions to retirement plan accounts are made with before-tax dollars so they reduce current income. Any earnings in these accounts grow tax-deferred until assets are withdrawn. Generally, thats at retirement. Distributions from Traditional accounts generally are taxed as ordinary income. Roth contributions Contributions to Roth retirement plan accounts are different. They are made with after-tax dollars so they do not reduce taxable income today. Any earnings in Roth accounts grow tax-free. Distributions from a Roth account are tax-free and penalty-free as long as the five-year participation period requirement is met and the distribution is taken for a qualified purpose, such as reaching age 59 or becoming disabled. How do I decide whether a conversion is right for me? The decision about whether to convert a Traditional workplace retirement plan account to a Roth workplace retirement plan account should be based on criteria that are similar to the criteria used when deciding whether to convert a Traditional IRA to a Roth IRA. These include: Tax brackets now and in the future: If you think youll be in a higher tax bracket during retirement than youre in today, then a Roth conversion may make sense. Assets available to pay the taxes due: When you convert from a Traditional to a Roth plan account, you will owe taxes on the assets you convert. If you have non-retirement savings available to pay these taxes, a Roth conversion may be a good choice. Legacy and estate planning goals: If a Roth 401(k) account offers estate planning opportunities that suit your needs, conversion may be a good choice. Income needs during retirement: If having a source of tax-free income to supplement taxable income during retirement could boost retirement income, then a Roth conversion may make sense.

Source: Investment News

Its important to recognize a retirement plan conversion is different from an IRA conversion. Plan conversions do not allow a do-over while IRA conversions can be revoked for a certain period of time. If you have any questions about this topic, please give us a call.

Weekly Focus Think About It


Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence. --Helen Keller, the first deaf and blind person to earn a Bachelor of Arts degree

Best regards,

Patty Loris, MBA, CFP LPL Financial Advisor

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* This newsletter was prepared by Peak Advisor Alliance. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association. Precious metal investing is subject to substantial fluctuation and potential for loss. * The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Past performance does not guarantee future results. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. * To unsubscribe from the Patty Loris Weekly Commentary please reply to this e-mail with

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