The term “financial literacy” is used often, but not always clearly defined. A recent editorial in InvestmentNews (“Setting a Standard for Financial Literacy,” March 4, 2012) drew attention to this fact, pointing out how several U.S. government organizations, including the Government Accountability Office, National Financial Educators Council and the President’s Advisory Council on Financial Literacy, all define the term “financial literacy” differently.

Having many definitions of “financial literacy,” the editorial argued, is “confusing and self-defeating for all those with an interest in making Americans become smarter about investing and managing money.”

It’s time for clarity. The Securities and Exchange Commission (SEC) has reportedly been mandated to study the existing level of “financial literacy” among retail investors and report its findings to Congress by July 21, 2012. (Source: SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64306; File No. 4–626] Comment Request on Existing Private and Public Efforts To Educate)

Meanwhile, two academic experts on the topic – Drs. Annamaria Lusardi and Olivia S. Mitchell – are working on clarifying how to measure financial literacy. In their report, “Financial Literacy Around the World: An Overview,” (Journal of Pension Economics and Finance, June 2011) they identify three economic concepts that individuals should understand when making financial decisions:

• Compound Interest

• Inflation

• Risk Diversification

Based on these three concepts, Lusardi and Mitchell developed three questions to measure financial literacy. According to their report, “financially literate” individuals are more likely to plan for retirement.

In the support of National Retirement Planning Week 2012, AXA Equitable is highlighting Lusardi and Mitchel’s three questions, and we hope you will take a minute to anonymously answer these questions. We will post the results of the survey and the actual answers next week.

One week isn’t enough to plan for retirement, but it’s enough to start. We hope our suite of retirement planning apps, tools and online resources will help.

GE 68144 (4/12)(Exp 4/14)

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News Brief from AXA Equitable: Highlights from recent notable market news reports
March 16, 2012

Better-than-estimated economic and corporate reports spurred the S&P 500 to rise above 1,400 this week for the first time in almost four years. The index is on pace for the best quarter since 1998.

So, where’s the party you ask?

Not so fast….By week’s end, both stocks and the sentiment of some experts seemed tempered by inflation concerns, fueled by rising oil and consumer prices.

“The bugaboo in the background is oil prices,” Madelynn Matlock, of Huntington Assets Advisors, told Bloomberg. “Things are improving at a slow, but steady pace. If oil prices pop up, it will be a different story.” (Bloomberg: “Most U.S. Stocks Decline as Oil Rally Bolsters Concern,” by Rita Nazareth, March 16, 2012).

Popping oil prices triggered the cost of living to increase in February by the most it has in 10 months, foreshadowing this week’s reports of consumer confidence unexpectedly falling in March.

Robert Arnott, chairman of Research Affiliates, a Pimco subadviser, warned in an InvestmentNews interview this week that the real story on inflation will soon be told.

“We’ve been protected by a sputtering economy,” he said. “If the economy regains traction and we get slow to moderate growth, we’ll see higher inflation sooner than we’d like.” (InvestmentNews: “Real Story on Inflation will soon be Told,” by Dan Jamieson, March 15, 2012)

IMPORTANT — AXA Equitable, AXA Advisors, LLC (member SIPC) and their affiliates do not provide tax/legal advice, or investment or market research. The quotes provided in this News Brief have been excerpted from media reports for general informational purposes only and do not represent the opinions of AXA Equitable, AXA Advisors or their affiliates, associates or employees. AXA Equitable and its affiliates make no representation as to the accuracy or completeness of any statements, statistics, data, opinions, forecasts, or predictions provided herein, nor will this information necessarily be updated or supplemented at any time. Any reference to market or index performance is for informational purposes only. It is not possible to invest directly in an index. This material is not intended, and should not be relied upon, as investment or financial advice and does not constitute an offer or solicitation of any kind.

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News Brief from AXA Equitable: Highlights from recent notable market news reports
March 9, 2012

The Sword of Damocles hangs less ominously over Europe, for the time being anyway. Stock markets tumbled early in the week but eventually regained footing as investors reacted to soft European economic data and nervously watched developments in Greece‘s debt drama.

European stock markets and U.S. financial shares in the S&P 500 edged higher, following private creditors’ acceptance of a Greek debt swap, paving the way for a sovereign restructure and avoiding a disorderly default.

“This is a story of isolating Greece and preventing a massive financial contagion,” Charles Schwab analyst Brad Sorenson told Bloomberg (Bloomberg: “S&P 500 Poised for Fourth Weekly Advance as Job Growth Exceeds Estimates,” by Rita Nazareth, March 9, 2012.)

Advances in U.S. stocks sent the S&P 500 toward its fourth weekly rally, bolstered by Department of Labor (DOL) payroll news that indicates the best six-month job growth streak since 2006.

“By any stretch, this is an encouraging report,” J.P. Morgan economist Anthony Chan told The Wall Street Journal, “more people are joining the labor force and the unemployment rate is not going up.” (Wall Street Journal: “Job Report Lifts Stocks,” by Christina Berthelsen and Chris Dietrich, March 9, 2012). This week’s DOL data release also showed that wholesale inventories increased in January, indicating that companies anticipate increased demand for products.

Birinyi Associates founder, Laszlo Birinyi, who correctly predicted the bull market would survive its 2011 mid-year correction, told Bloomberg this week that “the market is saying some very good thinks about the economy. While we may have stumbled for a day or two, I think the race is still on.” (Bloomberg: “Birinyi Still Bullish on U.S. Stocks,” by Whitney Kisling and Betty Liu, March 8, 2012)

IMPORTANT — AXA Equitable, AXA Advisors, LLC (member SIPC) and their affiliates do not provide tax/legal advice, or investment or market research. The quotes provided in this News Brief have been excerpted from media reports for general informational purposes only and do not represent the opinions of AXA Equitable, AXA Advisors or their affiliates, associates or employees. AXA Equitable and its affiliates make no representation as to the accuracy or completeness of any statements, statistics, data, opinions, forecasts, or predictions provided herein, nor will this information necessarily be updated or supplemented at any time. Any reference to market or index performance is for informational purposes only. It is not possible to invest directly in an index. This material is not intended, and should not be relied upon, as investment or financial advice and does not constitute an offer or solicitation of any kind.

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News Brief from AXA Equitable: Highlights from recent notable market news reports
March 2, 2012

Retail investors continue to appear largely aloof to the year’s stock market rally.

The S&P 500 has recorded its best start since 1991, and The Dow closed above 13000 on February 28 for the first time since May 2008. Individual investors, however, seem unconvinced that the recovery is real enough to merit diving into stocks.

Many retail investors remain on the sidelines or view the 2012 stock rally as an opportunity to sell not buy. The fund tracker EPFR Global reports that individual investors pulled $8.3 billion out of U.S. stock funds since the beginning of the year and put almost $10.6 billion into bonds funds (Wall Street Journal: “Investors’ Sell Signal: Surging U.S. Stocks,” by Joe Light, March 1, 2012).

Sam Stovall of S&P Capital IQ told the Journal that he sees the stock rally hinging on individual skeptics. “Markets may be at a tipping point. If individual investors decide to dive in, they have a lot of dry powder to drive the market higher. But if they don’t, it will be difficult for the rally to continue much longer.”

Defying the skeptics, the economy continued to show signs of improvement this week, buoyed by wage gains and improved consumer confidence (Bloomberg: “U.S. Wage Gains Signal Boost to Spending,” Shobhana Chandra, March 2, 2012).

The growing economy stirred Wells Capital to issue a report this week cautioning that 2012 “will be ‘lousy’ for Treasuries as the growing U.S. economy hurts bonds and supports stocks.” (Bloomberg: “Paulsen Predicts ‘Lousy Year’ for Treasuries,” Wes Goodman, February 28, 2012).

Wells’ chief investment strategist, James W. Paulsen, reportedly recommends underweighting ‘safe haven’ investments.

IMPORTANT — AXA Equitable, AXA Advisors, LLC (member SIPC) and their affiliates do not provide tax/legal advice, or investment or market research. The quotes provided in this News Brief have been excerpted from media reports for general informational purposes only and do not represent the opinions of AXA Equitable, AXA Advisors or their affiliates, associates or employees. AXA Equitable and its affiliates make no representation as to the accuracy or completeness of any statements, statistics, data, opinions, forecasts, or predictions provided herein, nor will this information necessarily be updated or supplemented at any time. Any reference to market or index performance is for informational purposes only. It is not possible to invest directly in an index. This material is not intended, and should not be relied upon, as investment or financial advice and does not constitute an offer or solicitation of any kind.

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