Condor Capital ... Condor Capital Investment Management info@  Condor Capital 1973 Washington
Condor Capital ... Condor Capital Investment Management info@  Condor Capital 1973 Washington
Condor Capital ... Condor Capital Investment Management info@  Condor Capital 1973 Washington
Condor Capital ... Condor Capital Investment Management info@  Condor Capital 1973 Washington

Condor Capital ... Condor Capital Investment Management info@ Condor Capital 1973 Washington

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  • Condor Capital Investment Management

    Condor Capital

    1973 Washington Valley Martinsville, NJ 08836

    (p) 732-356-7323 (f) 732-356-5875

    Third quarter full of volatility

    Fed cuts rates 50 basis points

    Growth outperforms value

    October 2007

    In this issue:

    Condor Capital Reviews 3rd Quarter 2007

    How Long Will You Live? And Why Does It Matter?

    Do You Need More Liability Protection?

    Ask the Experts

    Condor Capital Reviews 3rd Quarter 2007

    While global equity markets managed to end the third quarter in positive territory, the period was characterized by heightened volatility. Stocks began the quarter on a strong note, with many major indices surging to multi-year highs by mid-July. However, stocks proceeded to sell-off sharply over the following four weeks, as sub-prime mortgage default concerns, combined with further softening of the U.S. housing market, prompted global banks to tighten credit. These events led to investor concern that housing woes may negatively affect the broader U.S. economy. While the financial and homebuilding sectors bore the brunt of the pain, the correction was very broad-based, with most major global equity indices shedding about 10% of their value.

    The good news is that stocks reversed course almost as quickly as they plummeted, as investor confidence gradually improved, with a little bit of help from the Federal Reserve. At its September 18th meeting, the Federal Reserve surprised many investors by lowering its key target rate by 50 basis points to 4.75%. This marked not only the first adjustment to the Federal Funds Rate in more than twelve months, but also the first rate cut in over four years. This aggressive move by the Fed signaled to investors that it will ensure that adequate liquidity is available in order to prevent the credit crunch from pushing the U.S. economy into recession. In response, equities recouped practically all of their losses by quarter-end.

    In addition to the rate cut and increased volatility, the third quarter experienced some other divergences from recent trends. As the aforementioned concerns sent the market into a tailspin, investors preferred to seek out more stable, less-risky assets. For example, while the large company dominated S&P 500 Index finished the quarter with a return of 2.0%, the Russell 2000 Index, a measure of small-cap stocks, posted an overall decline of 3.1%. Large cap, multinational companies continued to outperform as the weaker dollar boosted their exports. Meanwhile, in terms of investment style, growth-oriented stocks outpaced their value-oriented brethren for the second consecutive quarter. Specifically, the Russell 1000 Value Index, which had been leading the large-cap realm for several years, shed 0.25% during the quarter, in contrast to

    the Russell 1000 Growth Index's relatively robust gain of 4.2%. Year-to-date, as of September 30th, the Russell 1000 Growth Index is up 12.7%, more than double the Russell 1000 Value Index's return of 6.0%.

    Internationally, developed markets generally traded in tandem with their U.S. counterparts, with the broad-based MSCI EAFE Index gaining 2.3% during the period. Emerging markets resumed their stellar outperformance, as the economies of rapidly developing nations such as China and Brazil continued to expand at a brisk pace, leading the MSCI Emerging Markets Index to a return of 14.5%.

    The flight to quality observed in the domestic equity market was not limited to stocks, as it was equally prevalent within the fixed income sphere. While higher-rated corporate bonds exhibited some resilience, lower-quality, higher-yielding bonds generally gave back more ground, as investors shied away from more economically sensitive issues in favor of risk-free Treasuries. By the end of the period, the Lehman Brothers Aggregate Bond Index had actually outpaced several equity indices, posting a solid return of nearly 3.0%. Meanwhile, the yield curve steepened during the quarter, as bonds at the shorter end of the curve experienced a stronger rally in response to looser monetary policy relative to long-term bonds. The steeper yield curve indicates investors' fear over a recession has gradually subsided, reflecting optimism over stronger economic growth going forward.

    Outlook Looking ahead, our view of the markets remains positive. We are encouraged to see larger and more growth-oriented names returning to favor, with the belief that these issues may continue to gain investors' attention after many years of underperformance. The overall corporate environment remains strong, as earnings growth is expected to continue at a respectable rate through 2008. Despite sub-prime mortgage woes and the on-going housing correction, a solid labor market and a surprisingly strong consumer have continued to drive economic growth. We believe that the U.S. economy remains on stable footing and should continue to display its unparalleled resiliency over the long-term.

  • How Long Will You Live? And Why Does It Matter?

    Since the first baby boomers began reaching retirement age, attention has been focused on the growing number of older Americans. The news is both good--people can now expect to live many years in retirement--and bad--Social Security and Medicare will be strained, and people are saving less than they should.

    A look at some statistics may convince you that the graying of America is more than just media hype. Life expectancy is on a steady upward trend, and planning for a long retire- ment is more important than ever.

    Life expectancy trends

    Gains in life expectancy over the last century have been dramatic. According to the National Center for Health Statistics (NCHS), from 1900 through 2004 (the most recent year for which statistics are available), life expectancy at birth for the total population increased from 47 to 78. Much of the gain in life expectancy at birth came in the first half of the 20th cen- tury, as public health projects and scientific discoveries helped control many of the infec- tious diseases and unsanitary conditions that led to a high number of childhood deaths.

    Life expectancy for individuals who reach age 65 has also been steadily increasing. Accord- ing to the NCHS, life expectancy for older individuals improved mainly in the latter half of the 20th century, due largely to advances in medicine, better access to health care, and healthier lifestyles. Someone reaching age 65 in 1950 could expect to live approximately 14 years longer (until about age 79), while some- one reaching age 65 in 2004 could expect to live approximately 19 years longer (until about age 84).

    Reduce the odds of outliving your money

    Using life expectancy tables or calculators to estimate how long you'll live can help you plan for retirement. Once you understand how

    many years you might spend in retirement, it may be easier for you and your financial pro- fessional to put together a realistic plan to help ensure that your retirement funds will last for a lifetime.

    Here are some planning tips:

    • Prepare for several financial scenarios. For example, how much money will you need if you live to age 75? Age 85? Age 95?

    • Recalculate your life expectancy periodically. Statistically, life expectancy changes over time.

    • Consider your spouse's life expectancy as well as your own when determining your retirement income needs. According to NCHS statistics, women live 5 years longer than men, on average, although the gap is slowly closing.

    • Plan for the possibility of needing long-term care. The longer you live, the greater the chance that you'll need assis- tance with day-to-day tasks or even ex- pensive nursing home care that could wipe out your retirement savings.

    Current Life Expectancy


    Birth To age 77.2 To age 77.8

    Age 65 To age 82.6 To age 83.7

    Sources: Social Security Administration, Actuarial Study 120, Table 10; National Center for Health Statistics, Health 2006 (based on 2004 data for total population)

    According to the National Center for Health Statistics, approximately 45% of women will live to at least age 85.

    Life Expectancy: 1900 to 2004

    0 20 40 60 80

    1900 1920 1940 1960 1980 2004


    A ge

    According to the NCHS, the average life expectancy for a boy at birth is now age 75, while the average life expectancy for a girl at birth is now age 80.

    Page 2

  • Do You Need More Liability Protection?

    Liability insurance protects individuals and businesses in the event they're held financially responsible for injuring someone or causing property damage. You probably already have this important protection, but do you have enough?

    Personal liability insurance

    Despite the common belief that only people with substantial wealth or assets are the tar- gets of lawsuits, that's not necessarily the case. Accidents can happen anywhere, to anyone, and even people of modest means may be at risk. For example, here are some common situations that might result in a liabil- ity claim:

    • Your dog escapes from the house and bites a delivery person

    • A neighbor's child is hurt while jumping on your backyard trampoline

    • Your vehicle broadsides another, injuring the driver

    Unfortunately, if you're sued, your assets are potentially at stake--your savings, your invest- ments, and in most states, even your home