and the ceo of harlem success academy. should education be treated like a buness? and knocking down roadocks to retirement. how to get your portfolio back on track. when is it time to break down? and what if you're caught in the middle? the "wall street journal report" begins right now. >> thiss america'sumber one financial news program, the "wall street journal rort." now maria bartiromo.

>> here is a look at what is making news as we head into a new week on wall street. the marketsrapped uphat is traditionally a serable month r stockwith a speacular performanc the dowones indtrial averag having its best september in 71 ar rising more tn 0 points for the month. the other major indes were impressive as well. thp 500 upette tha 8% on the month. the nasd up more than12%. th week, meanwhile wasess spectacular than the month the dow fell about50 points on nd, rebounded tuesday, and was soft dweek. on friday, the markets re. insurance giant aig reaching an agreement in principle to repay the federal government for its rescue in 2008. initially, though, the government will own 92% of aig. eventual it plans to bin selling that stock ithe open ma. home prices ar upor the fourth straightmth, according to the&p case-shiller me index. they still remain about 28% below the peak in july of '06.

and jpmorgan chase will delay more than 56,000 foreclosure proceedings because of paperrkerrors that comes on the heels of g-mac halting foreclosures and evictions in 20 states for similar reasons. it certainly has been an extraordinary september for the markets. what is next and where do we go from here? joining us is doug cliggott. great to have you on the program. so the besseember for the stocmark since1939. really surpris everybody. >> it's stunning. >> doyou think the momentum continues into october? >> ink it will be tough to keep it going. we like to look a quarterly data, anen whatou see is when in any particularquarter, if o asset class does a lot better than another, stocks did much, much better an bonds in the third quarter, yo tend to see a reversal at the beginning of the next quarter. if weoo backward, if can remember thesecond quarter was pretty tough. ocks went down a lot, bonds

did well. so you got a revsal of that in july. we're looking for the same thing in october, where essentially people wl take gains, we think. >> and of crse we are goin to start hearing enings. we've got the earnings forhe third quarteroming outn the next couple of weeks. do y think the earnings will be strong? is that pd into themket? what are you expecting? we're expecting a pretty significant meration in earnings growth. we try to link economic data to the enings data. and ther is lot of da points that sut the u.s. economy really did slowwn in and wethk thatslowdown tha , really wve bee living throh, that's gog to show u in earnings when compans start reporting them. we don't think they're going to be terrible, but we think they're going to be more mixe it sounds like i should b lightening up on stocks, my exposure to stocks here? >> well, i tnk oneof our themes is that you should a patientinvestor. you should try to resist the

urge to reallyove your asset allocation aroa lot. i guess i'd rather sa we wouldn't bencouraging people putew mono work in the equity markeright no >> i see, okay. so should i sta selling? >> well, depends on how much exposure you already have. i think we've got acouple themeshat we think bo relevant n d could be revant for a cple of years. we reallyike the es of e markethere compans have a high dividend yield and relativelyow volatity, areas like telecom services and consumer staes. but some of the highly cyclical areas that have done very well say li retailers, we would recommend reducing exposure there now. >> i see, okay. so we're approaching the midterm elections. obviously another catalyst for this market. >> ye >> what kind of ampact are you expectinfrom the mterms? >> whe we looked at midterm tcomes ithe past, weooked at data really going back

to 1930. so we' got 20 midterm eltions. at see the mariet usually doellhe of them, d then not mu hapns afterwar. so to use the jargon, market buys the rumor. it buys the hope of change. and then when it actually happens, not much happen >> andhat is irrelevant, irrespective, raer, of what haens in the midterm? >> well, i think wha you ten to see in a midterm is youove in from an extreme. and sometimes that's good. in th '90s, it was great because the american economy was doing fantastically well. you didn't need much to happen in washington for it to continue. 's hard to argue the u.s. economy is doingantastly well, now. so gridlock i don't thinkis going to be a great thing. >> and of course that is why you're seeing this move into gold. a fear trade in so regard, or perhaps the dollar mement also

moving money io gold. would u recommend getting into mef these commodits that havelready been such big movers? >> they've moved so much, maria. i think a divsifi ptfolio is a reay good g. having a small portion of your portfoliin gold makes nse. adding new mey to it n is a tough o. you know, in our ew, the stng move in gold,ort of gold going up, the dollar going down, even oil has moved up a lot, we see that as related to the belief that e federal reserve is going to do ather rounof assetpuhases. in asense, make an even easier monetary policy. and in tha eironment, commodities tend to do welwhen the feds generating as easy a policy as humanely possible. >> you know, it's interesting, becae the fed keeps saying, look, we're going to b there if the economy deterrates further. and on the one hand, you wld say okay, all of this easing is

positive. but onhe other hand, it's a result of a we economy. and so the fundamental backdrop isot very good. >> well, how does -- how does fed policy give us growth fed policy gives us growth by manipulating behavior so that we borrow more. a l of amerins don't want to borrow more. righ >> so it's really hard for the federal reserve to do anything to generate job growth and stronger economic growth. >> great to have you on the program. >> thank you, maria. >> we so appriateour time today. doug cliggott joining us from edit uisse. > up next on "wl street journal report," we're going back to school,discussing edation reform and the growing business of charter schools. an saving enough for tirent. w boue bacwh your rtfolio s hit a bump in t road. we ke areak, aook at hothe stock maet ended t week. [ mom ] my son ryan didn't know his voulez-vous

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you run seven in new york city, one of tm of course featured in the film. talk to us what is a charter school, and why you think your

autonomously managed charter schools are more effective than traditional sort of zone schools. >> sure. well charter schools are public schools by law. they are free from the bureaucracy of the district on the one hand, and from the work rules of the labor unions on the other hand. so we have the freom to ganize our school around a radical princle, which teaching and lening. so the schoo is not gad around teedsfadults per utaround the nee of achi and learning. >> isn't this amazing that this is so radical? >> it s. >> but we he bee sort of handicappe by some of tse issues, lor uons and ganizingched on what the adults see as most important. >> it really is true. and when you see the schools co-lated, so i aamco located in all seven schools, it almosteels unfair t the distct sools becse it's hard for them touced when they have life-time tenure, when

they hav to l off people based soly on seniority not merit. the principal is not allowed to take into account mer. that's a weird way to run a set of schools. >> it's a very weird way at the principal cannot really put the best athletes on the field, ifou will. lesley, charter schools are not the onlyossible solution to th challenges our publi education system faces, righ for example, they haveimited reurcefor students wi specneeds or disabilities. so how do apply the good things about charter schools to the entire system? i think the most important thing that we can learn from charter schools is we take the things that they're doing that are working, you know. as eva was saying, there is the freedom to choose your own team. so one of thethings tha we're really missing inmerica is we don't cultally value our teachers. it's not a prestigious position. now sure we vae some of them, but you don't have a lot of -year-olds growing up and sayinghat i really wanto do in life is become aeacher. d a t of the topcountries,

i useto t in jap en i wa younger. and i got so much respect and i was a young teacher. they're brought up with teachers are heroes, we need to respect them. it's one of the best possible jobsou can have in society. and chaer schools, one of the reasons they're doing so well is their teaching staff is so amazing. it's important to remember that about 90% of our kid are still inainstreamublic schools. i think when you look at that and we ask questions about tenure, and we ask questions about not being able to rard teachers and give them the professionalevelopment they need and not being able to evaluate them, to ask those questions isot to be agast anything. i mean the film, our goal was to create, reignite this national conversation around the issue and get all sides talkg to each other. and i think people need to go see the movie for themselves and judge and learn. >> so are we rewarding excellence then in terms of teaching? are we payg good teachers more

money? i mean saly should be going higher in some cases, right? >> right. and i think everyone agrees that teachers need to be paid more. i think that's in whatever kin of school, you know. we have to -- it's not community service. this is a professiona job. we say our childrenare ou future. well, if that's true, then we need to put the most qualified, lented person in the fnt of the classroom with them. so i thi there isome new union contractsn the relar public schools like th one in deer, r ample,here teachersre evaluate a there is anpportuty for met pay. and have llyook at es and i comptely agree with what lesley is saying, but i would just addhat the problem is not a lackf know-how. the problem is actually a political problem. we have th teacher unions having disproportional influenc in the state houses. many elecd officials are inflnced disproportionately by the special interest >> because the unions dever the votes for those people.

>> they also contribe e look at michle rhee in washingtond.c. the af put a million dollars into defeati mayor fenty, because she had the courage to take on the contract issues that lesley is so eloquently speaking about. so we're going to have to solve that proem. and i would like to seehe business commuty engaged in at iue we have --is is goingto take the entire country to solve this problem. this is not a problem, as the film points out, that simply affects the disadvantaged. the middle class are also affected like this. affected by this. we are 26 out of 29 industriized couries on the standardizedath and science st. othe cotriesn this mpetitivglal onomy are eating our lunch. and if this nation is going to survive economically, we are going to havetoolve this problem. >> lesley, isn't that a great point, though? when you loo math and science and where the u. is

versus our friends around the world, what can we do to insure that our students have the right skill sets to thrive in this new normal of an economy we're talking about? >> i think that we he to take a look at our standards and come up with these common core standards. and our standards have to be world-class. we have different standard state di state. and we need to come up with thes uniform standards. we need to value teacrs, like i was talkibout earlier. >> it's a gat pot. >> eva, lesley, great to have you on the program. >> thank you. >> we appreciate your time. up ahead,ow to forge a smooth road to retirement. strategies for clearing life's financial roadblocks and become a fann, andy

boomers staying on the job longer, many ericanfear not ving enough for t golden years. joining me with advice for geing back on trk, "moy" mazine's senior editor walter updegrave. great to have you on the program. everyone is focused on the 40k) and portfolios becaus these la few years have been really a wild ride. in many cases, a down rformance for so many investors. ow do you takeetiremt into accounthen your portfolio is still in recoveryin terms of savings? >> well, i think the first thin is people's natural reaction is to try toind investing way out of this. so they maybe sort of take a little more risk in their investment portfolio, and they may be sting themselves for a trap. really the first thing you want to do is bump up yr savin rate a little bit mo. that may be th least attractive, but it's really th most effecte. so for example, wehow our retirement issue how increasing your savings rate om 8% to

10%, oif youan get it up to 12% and have a really bigeffect on the eventual siz of your nest egg and increase your odds of being able to retire with security. so you've really got to take a la look at where you're spending money and start cutting back and pting that money to savings? >> exactly. and if you can do it on a autotic asis, you'r much better off. for example, more money in your 401(k) because it's coming out of your paycheck before youet ur s on it, things like maybe tting yourself a reminder putting someoney into an ira. when you're0 you havthe catch-up contbutions, extra $5500into the 401(k) and extra $1,000 into the ira. >> thas very interesting. thank you for making that point. many people think that they won'be able to stop working when they're carrying so much debt. what if you have a significant mortgage? do you tde down? >> if you have a substantial amnt of equityn your hou before youetire, you may want to consider downsizing to a smaller house. if you have enough where you could sell your house, buy somethin forash almost all

cash, you sort of avoid that mortge paymt,which is very niceoo into retiren withou that deb hanging over you. if you don't he much equity, you stil maye ab to geenough out where you ca put down a dn payment. u still ha maybe a mortgag buthe payment is much smaer an you would hav your regular ou. ase om that, ifouon't want to go that route,nd if u have enough money in savings, asid from what you need forergenc you may mortgeo at least is not going to last as lg i retirement. >> so you ecommend paying do as much of your mtgage as you can, even though perhaps your -- you know, you've got ose interest rates. it is more economical -- is it smaer idea to pay down the mogageven with rates where they are? >> well, the thing is when you pay down yr mortgage, you're essentlly locking in, assuming it's a fix-rate mortgage, a fixed rate of rern, and it's very sece because you know what that rate of return will be. the mortgage is fixed. a lot of times that's much better you'll get on a safe

investment today whe inrest rates are 1% or less than 1%. it all depends owhether or not you ha enough to do this without dipping into your retirement savings. >> kay. another common roadblock, pants juggling college expenses with their own retirement planning. how do you balance those two? >> this is a case that yo have to look athat is expected of me. what kind of contributionlso colleges expect from me there is aalculator onlinet coegeboard.com, thexpected family contrion. go there, see what kindf contributions expected you can then look at schools and see how much of the ne they're willing to meet. and not only that, but how they're going to meet that need. some schls will do it primarily through loans or work programs. other schools may be mor willing toive you scholarship grants. so youant to if yo can find with thegrant and that way you're payinout a littlbit less. you may have to rest to loans. inhacase, yo proba want to do the student loans rst, the staord sde loans and

then only sort to the paren pl loans. beforeou take t the loans, o a ccutor, make sure you understand what the paynt are going be because you're probably going to be making them in retent thesedays a lotf people are marry lar dheir kids areoing off to college just at e time when they're preparing for retirent or maybe in retirement. >> that's so common. great to have you on the progra thank you so mh. we appreciate it. walter updegrave joining us. up next on the "wall street journal report," we'll take a lo at the news this coming week tt wilhave an impact on your money. and

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for more on our show and our guests, che out our website,wsjr.cnbc.com and investor agda@cnbc.com. hope you will cck it out. no look at thetories in e week ahead tha may ve the ma ampact uroney th week. mond, more infortion about housin from theational asciation

realtors. the strength ofhe noanacturi segment of the economy. on thursday, third quarter eaings season kic off. dow cponentlcoa repting its thd quarter earngs as well as csumer antpsico. andn on friday, theig kahuna of ecom rorts, the september jobs reporwill be out. will learn how many jobshe economy created or lost in the last month. and finally today, ging a high-five to more eowing social network. launch at a pep rally in new york this week, the u.n. foundation's girl up campaign asksmerican teenagerso give a high-five to their peers in developing nations. the are $5 donations for school supplies, water, medicine, or other opportunities. there are more than one billion young people age 10o 19 globally. more than half are adolescent rls in developingnations. thatill do for today. thank you so mh r being with me. next week my guest former council of economic advisers

chair martin selsteen. have a great ek, everybody. i'll seeou ain next weekend. this kenmore elite multi-motion washer... how does that work? hit it! see, other machines only go in circles. this kenmore elite has multi-motions for a custom clean. it scrubs to help lift stains, rolls to wash gently, swings, steps, and tumbles. better than just circles, what! sorry. get a free stainless steel upgrade on top brands, and 20% off all appliances. plus save up to an additional $250 instantly