10-Year Returns Recently Turned Positive
At the close of the 2000s, investors who held U.S. stocks throughout the previous 10 years experienced near 0% returns, based on the S&P 500 Index. However, at the end March 2011, those who had been in stocks during the past decade could finally claim they made money, albeit very little. For the 10-year period ending Mar. 31, 2011, the S&P 500 rose an annualized 3.3%.

Worst Decades Have Preceded Rebounds
More importantly, history shows there may be significantly more upside ahead. A look back at previous poor decades shows that 10-year periods of sub-par performance typically have been followed by decades of improving—and eventually above-average—returns (see chart, above). For example, after the worst 10-year periods in the 1930s and 1970s, the market rose 9% and 15%, respectively, on an annual basis over the subsequent 10 years.

Still Room for Improvement Despite Strong Recent Gains
Stocks have appreciated by more than 100% off their lows set in March 2009, yet performance during the past 10 years (3.3%) is still quite low by historical standards (in the bottom 10% of returns for all 10-year periods since 1926). These long-term patterns may not provide many hints about the short-term trajectory of the stock market, but history has shown that entering the market while 10-year trailing performance is below average has tended to be better than entering after periods of above average performance.

Footnotes
The Market Analysis, Research and Education (MARE) group, a unit of Fidelity Management & Research Co. (FMRCo.), provides timely analysis on developments in the financial markets.
Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk.
Past performance is no guarantee of future results.
Investing involves risk, including the risk of loss.
Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments.
Diversification does not ensure a profit or guarantee against loss.
All indices are unmanaged and performance of the indices include reinvestment of dividends and interest income, unless otherwise noted, are not illustrative of any particular investment and an investment cannot be made in any index.
The S&P 500®, a market capitalization-weighted index of common stocks, is a registered service mark of the McGraw-Hill Companies, Inc. and has been licensed for use by Fidelity Distributors Corporation. Brokerage products and services and workplace savings plan products and services offered directly to investors and plan sponsors provided by Fidelity Brokerage Services, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917.
Investment and workplace savings plan products and services distributed through investment professionals provided by Fidelity Investments Institutional Services Company, Inc., 100 Salem Street, Smithfield, RI 02917.

Financial Planning Corner

Caring for your aging parents

How to care for elderly parents is a major concern of many families.  Ensuring good health care, finding the right living situation, and handling financial and legal issues can often be complicated.  It can be physically and emotionally overwhelming to both the parent and child.  Nonetheless, the family who has discussed the options and agreed on plans will be better able to handle whatever happens. 

Mom? Dad? We need to talk
The first step is to start talking to your parents about the situation and the possible need for change.  A gentle and honest discussion about their wishes and their options is typically the best approach. The conversation needs to cover a range of topics and doesn’t need to take place all at once.  Regardless of your good intentions, some parents are simply not willing to talk to you about their future.  This may be because they are afraid to face it or because they resent your interference.  In some cases, you may need to do as much planning as you can without them or even step in anyway if their safety or health is in danger.
 
Preparing a personal data record
Once you’ve opened the lines of communication, your next step is to prepare a personal data record. A personal data record is a document that lists information that you might need in case your parents become incapacitated or die.  This record should be kept in an easy-to-reach location.  The information included should consist of:

• Financial information: Bank accounts, investment accounts, real estate holdings
• Legal information: Wills, durable power of attorneys, health-care directives
• Medical information: Health-care providers. Medication, medical history
• Insurance information (life, health, long-term care, etc): Policy numbers, company names
• Location of other important records: Keys to safe-deposit boxes, real estate deeds

Where will your parents live?
Depending on your parent’s age and current health, living situations may need to be altered.  If they desire to stay in their current home, you may need to find them home care.  This can include assistance with household chores, driving around town, and healthcare aids.  Alternatively, a move to a retirement community, such as an independent living facility, assisted living facility, or nursing home may be more appropriate.  On the other hand, you may want them to move in with you.  In this case, it is essential to not only know what your parents are anticipating from you, but also what you are expecting from your parents.  Overall, it is important when investigating housing options to completely understand the cost and services provided.

Staying on Track!
There may come a time when your parents have difficulty keeping track of their finances. If your parents need help managing their finances, you may need to contact professionals whose advice both you and your parents can trust.  You can contact your financial planner, investment counselor or accountant for help regarding any financial information.  Legal advisors can also play a big part in planning for your parent’s future.  There are a number of legal documents that can allow your parents to put their wishes in writing.  In addition to a Will, the preparation a Durable Power of Attorney, Medical Directive, and Living Will can be a major weight off your shoulders and put your parents’ minds at ease.  Many states provide funds for the delivery of free legal services to the elderly and many attorneys specialize in elder law, so locating legal advice should not be difficult.
 
Financial planning for you
Caring for the elderly can be quite expensive and you may want to provide financial assistance.  However, the amount of financial assistance must be balanced against your other financial obligations.  Before you can determine the best way to help your parents financially, you’ll have to look at your own financial picture.  Not only will you need to consider your current expenses, but you need to look down the road a few years and make sure you are not jeopardizing your own retirement or your child’s education by overextending yourself to help your parents.  If you find yourself supporting your parents financially, you may be eligible for certain federal income tax breaks and should seek out assistance from a tax professional. 
 
Get support and advice
Caring for your aging parents is not only an emotional burden for you but may be a financial one as well.  It is often worthwhile to seek help from an eldercare professional.  Don’t be afraid to ask questions, as you can’t be expected to know everything.  Some advice may even be free.  If you don’t know where to find help, contact your state’s department of eldercare services.  You can also call (800) 677-1116 to reach the Eldercare Locator, an information and referral service sponsored by the federal government that can direct you to resources available nationally or in your area.