for the Long Term
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Invest for the Long-Term
Stay the Course Through Ups and Downs
History shows that the market goes up and the market goes down. While there may be short-term losses, historically the market tends to rebound and reward long-term investing by moving even higher. If you stay fully invested, you may benefit from rebounds. Long-term investors realize the market’s resiliency and the benefits of staying the course. No investment strategy ensures a profit; investment returns will fluctuate. It is possible to lose money in any investment. The following chart shows the growth of $1 since 1926.
Buy Right and Sit Tight
Market Timing Doesn’t Work
No one knows when market gains will occur and missing just a few of the market’s best days can lower your return substantially. To take advantage of market gains, stay fully invested and don’t try to time market moves. However, even staying fully invested cannot ensure a profit.
This information is for illustrative purposes only and is not intended to represent any particular investment. Past performance is no guarantee of future results.
Know Your Opportunities
Keep Emotions in Check
Historically, market volatility has caused investors to make emotional decisions. As a result, investors tend to buy high and sell low based on emotions rather than the proven tactic of staying the course.
Looking at the past 12 years, one of the largest equity inflows occurred in the first quarter of 2000, at the same time the market peaked. Then, one of the largest equity outflows occurred in the third quarter of 2002, which coincided with a market bottom. More recently, the largest equity outflows occurred in the fourth quarter of 2008, just weeks before the market reached a low point in March 2009.
Equity mutual fund flows include both domestic equity and international equity. Net flows are for illustrative purposes only and are not indicative of the performance of any particular investment.
This information is for illustrative purposes only and is not intended to represent any particular investment. Past performance is no guarantee of future results.
History Shows Bear Markets are often Followed by Positive Returns
Why Diversification Matters
A mutual fund’s portfolio may differ significantly from the securities held in the indices. These indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the active management of an actual portfolio.
This information is for illustrative purposes only and is not intended to represent any particular investment product. Diversification does not ensure a profit or protect against a loss in a declining market. It is possible to lose money. Past performance is no guarantee of future results.
Capitalize on Market Declines
Bear markets and corrections are normal occurrences, happening about once every two years since 1942. Wise investors know that bear markets and corrections may be great buying opportunities. By adding to investments after the market drops, you can take advantage of lower stock prices, although this does not ensure a profit.
The chart above covers the time period from January 1, 1942, through June 30, 2011. The annualized rate of return for the S&P 500 Index from January 1, 1942 through December 31, 2010 (69 Years) was 7.48% (does not include reinvestment of dividends). Definitions: The S&P 500 Index is a capitalization-weighted index of 500 widely-traded stocks. Created by Standard & Poor’s, it is considered to represent the performance of the stock market in general. It is not an investment product available for purchase. A bear market is defined as a 20% decline in an index from its previous peak. A bear market ends when the index reaches its low and subsequently rises by 20%. A bull market is defined as a 20% rise in an index from its previous low. A bull market ends when the index reaches its high and subsequently declines by 20%. A correction is a decline of at least 10%, but not more than 20%, in an index. Corrections only occur during bull markets. In the current bull market, which started on March 9, 2009, there has been one market correction thus far (as of June 30, 2011). The date of that correction was April 23, 2010, through July 2, 2010, at which time the S&P 500 declined 16%.
Past performance is no guarantee of future results. Investment returns will fluctuate and it is possible to lose money.
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