Planmark Capital Management

The Markets

As the magic of Harry Potter reached its frenzied climax last Friday night, stock market investors were digesting another run in record territory.

Although the market closed down for the week, it briefly closed in record territory last Thursday as the Dow Jones Industrial Average squeaked by the 14,000 level. Since both the stock market and Potter-mania reached new peaks last week, we thought it’d be fun to see how closely the Harry Potter books and the stock market performed over the course of those seven books.

According to Amazon.com, the first Harry Potter book published in the United States was Harry Potter and the Sorcerer’s Stone, and it dates to September, 1998. Let’s just assume the book was released on September 1 so we can use the Dow Jones Industrial Average’s closing price of 7,539 on August 31 of that year as our starting point. Fast forward to last Friday, July 20, and we see that the Dow closed at 13,851, according to Yahoo! Finance. Using our handy dandy HP 12c calculator, the Dow has compounded at an annual rate of approximately 7.1% over that nearly nine-year period, excluding reinvested dividends.

So what can we say about a 7.1% average annual return before dividends? By comparison, for the 30 years ending August 31, 1998, the Dow rose at an annualized average rate of about 7.4% before dividends, according to data from Yahoo! Finance. The conclusion? The Dow had an average return while Harry Potter’s 9-year run, with 325 million books sold and billions in box office receipts, was extraordinary and unlikely to be repeated in our lifetime.

Yes, the Potter saga is over but the stock market continues and as always, we will do our best to master it, while it does its best to beguile us.

Returns Through 7/20/07	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Dow Jones Industrials	-0.4	11.1	27.4	11.1	12.3	5.8
Nasdaq Composite	-0.7	11.3	33.0	12.2	16.1	5.8
Standard & Poor's 500	-1.2	8.2	23.7	11.9	13.6	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.

WHAT’S SMALL ENOUGH THAT IT CAN BE RUN BY THREE MOTHERS in a neighborhood, or large enough to involve numerous communities and require incorporation as a non-profit and a staff? A giving circle. With more than 400 operating nationwide, a giving circle is formed when individuals pool their charitable dollars, decide where to give their money and volunteer time, and learn together about their community and philanthropy.

And we’re not talking about spare change. The 160 giving circles responding to a recent survey by the Washington, DC-based Forum of Regional Associations of Grantmakers have raised more than $88 million for community needs, granted nearly $65 million, and engaged more than 11,700 donors. In 2006 alone, giving circles granted $13 million for community needs. Members’ individual donations range from less than $100 to more than $100,000 each year.

From small towns like Moscow, Idaho to big cities like Chicago, the Forum’s database lists giving circles in 44 states and the District of Columbia. At a time when we seem increasingly disconnected from each other, giving circles provide a chance to learn and make decisions together. You can visit www.givingforum.org for more information.

SURE, THERE’S A GAP between average Americans and millionaires, but did you know that the gap’s even greater between millionaires and America’s ultra-rich?

Of course, that’s not to say that millionaires are doing poorly. In fact, the 2007 World Wealth Report by Merrill Lynch and Cap Gemini showed a record number 9.5 million millionaires worldwide in 2006, collectively controlling $37.2 trillion in wealth. (Millionaires were defined as people with financial assets of $1 million or more not including primary residences.)

While the millionaire population increased 8.3% between 2005 and 2006, that’s nothing when compared to the growth of the ultra-wealthy, individuals who have financial assets of $30 million or more. The global super-rich club grew 11.3% worldwide last year and their total wealth grew by an even more astounding 16.8% to $13.1 trillion.

The lesson here? Yes, the rich get richer, and the ultra-rich get richest, but the bottom line is capital begets capital. Remember, the power of compound interest works for any investor, no matter what his or her net worth.

Weekly Focus -- Is Ginormous a Word?

Two years after a majority of visitors to Merriam-Webster OnLine declared it to be their “Favorite Word (Not in the Dictionary),” the adjective ginormous (now officially defined as “extremely large: humongous”), has earned a legitimate place in the 2007 copyright update of Merriam-Webster's Collegiate® Dictionary, Eleventh Edition. This year, ginormous was one of approximately 100 new words to win inclusion.

Here are other new words now deemed ginormous enough to be included in the 2007 edition.

* 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 Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.

* The Nasdaq Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

Brain Teaser Answer: It contains the numbers one to nine, in alphabetical order.