By: Joanna Alexander Kathy Ratajczak Will Prout Courtney Potter

What practices do money market funds currently employ? Provide investors with a relatively safe alternative to savings accounts by investing in only low risk commodities Provide investors with a relatively safe alternative to savings accounts by investing in only low risk commodities Funds encourage investors to believe they can never lose money Funds encourage investors to believe they can never lose money What does the SEC propose to regulate? Require money market funds to hold capital on the offchance that there are losses Require money market funds to hold capital on the offchance that there are losses Require money market funds to use a floating measure of their net asset value, making it more difficult for investors to withdraw cash Require money market funds to use a floating measure of their net asset value, making it more difficult for investors to withdraw cash Is what the SEC proposing beneficial?

Financial Markets held their breath on Tuesday as Italian Prime Minister Silvio Berlusconi’s reform shy government teetered on the brink. Rome has displace Athens as the epicenter of the euro zone’s sovereign debt crisis. Italy’s government bond yields have approached unsustainable levels. Italian 10 year borrowing costs touched a new record 6.71% on Tuesday raising the risk that Rome’s massive debt, the 2 nd highest in Europe at 120% of GDP could spiral out of control.

Do you think a Republican or Democratic victory effects the stock market differently?

Stocks have rallied after every mid-term since 1942! Stocks surge on average 18.3% in the 200 trading days after mid-term elections The S&P 500 chalked up its biggest 200 day gain, 30.5% in 1942, as the tide began to turn in WWII The smallest gain 3.9% came in 1946 as investors fretted that the economy would sink into another depression The market has been essentially neutral about party changes in one or both houses of Congress

Historically it has been a good predictor of stock performance. Since 1940 the S&P has returned a cumulative 9.3% on average in the first two years of presidential terms—slightly more than a third of the 25% cumulative return in the second two years! Recently though, the presidential-cycle indicator has fallen flat Bottom Line: Markets often find a way to upset our preconceived notions!

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