<ul><li>Actions You Can Take in a Volatile Market </li></ul>Now more than ever, you need a plan Bruce Gillen, CFP ® 6/21/2...
Today’s agenda <ul><li>How we arrived where we are today </li></ul><ul><li>Putting today’s markets in historical perspecti...
Ameriprise Financial <ul><li>What we learned in our 115-year history </li></ul><ul><li>More people come to Ameriprise Fina...
Our four cornerstones
What’s been driving recent  market volatility? <ul><li>An oversupply of lending which drove up home values and resulted in...
I read the news today <ul><ul><li>Real estate prices collapse </li></ul></ul><ul><ul><li>Largest one-day loss in the Dow J...
The “flaw” of averages <ul><li>S&P 500 Annual Returns 1926-2009 </li></ul>Source:  Ibbotson for 1926 to 1969; Standard & P...
Measuring volatility <ul><li>S&P 500 stock index 1979-2009:  </li></ul><ul><li>Average return is about 11% </li></ul><ul><...
The stock market has delivered over  the long term <ul><li>From 1970 through 2009, the S&P 500 has returned an average of ...
Historical range of returns of S&P 500: 1970-2009 Source: Standard and Poor’s 500 Index. The Standard & Poor’s 500 Market ...
Returns by decade Source: Standard & Poor’s 500 Index (S&P 500). S&P 500 Index returns assume reinvestment of all dividend...
Where we stand in the current decade -9% 30 25 20 15 10 5 0 -5 -10 -15 -20 -25 -30 -35 -40 -12% -23% 28% 11% 5% 16% 5% 26%...
Comparing this decade to others Annualized performance of the S&P 500 20 15 10 5 0 -5 Source: Standard and Poor’s 500 Inde...
Long-term investing strategies  <ul><li>Diversify to manage business, market, and interest rate risk </li></ul><ul><li>Reb...
Historic volatility by standard deviation S&P 500 Stock Index 1976-2009 11% 26% 41% -4% -19% Barclays Capital Aggregate Bo...
Diversification options <ul><li>Asset classes (stocks, bonds, cash, real estate, etc.) </li></ul><ul><li>Investment produc...
Diversification can temper  market volatility <ul><li>Performance of Stocks, Bonds and 50/50 Mix 1990 to 2009 </li></ul>Ba...
Rebalancing can keep you on plan Initial allocation Rebalance back One year later Diversification helps you spread risk th...
Dollar-cost averaging – price rises Average price: $15.00   Average cost:  $14.19 Invested amount:  $6,000.00 Ending value...
Dollar-cost averaging – market down,  then recovers Average price: $15.00   Average cost:  $13.85 Invested amount:  $6,000...
Dollar-cost averaging – market down, partial rebound Average price: $10.83   Average cost:  $9.73 Invested amount:  $6,000...
Three different markets —  three positive results <ul><li>Total invested – $6,000 in monthly $1,000 increments </li></ul>D...
Understanding emotional investing Source: Radarwire.com. A product of Simon Economic Systems, Ltd.  Optimism Relief Hope “...
The average equity investor lags  the market <ul><li>Equity market returns v. equity mutual fund investors’ returns </li><...
Benefits of a personalized financial plan <ul><li>Focuses on your goals, not short-term market conditions </li></ul><ul><l...
<ul><li>Steps you can take </li></ul>
Six steps to consider taking now <ul><li>1. Diversify, diversify, diversify </li></ul><ul><li>2. Rebalance or review your ...
Six steps to consider taking now <ul><li>1. Diversify, diversify, diversify </li></ul><ul><li>2. Rebalance or review your ...
Next steps
 
 
 
 
 
 
Let’s get started. Financial planning services and investments offered through Ameriprise Financial Services, Inc. Member ...
Upcoming SlideShare
Loading in...5
×

Actions You Can Take In A Volatile Market

557

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
557
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
11
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • [PRESENTER STANDS OFF TO THE SIDE OF THE ROOM.] How was [lunch/dinner]? [WALK TO THE KNOWLEDGE SPOT, WHICH IS FRONT AND CENTER OF THE ROOM.] I’d like to thank you for taking the time to attend today’s program. I also want to thank my staff [CALL OUT BY NAME IF PRESENT] and the team at [HOTEL OR RESTAURANT NAME] for helping put this event together. My name is [name] and I’m a [title] with Ameriprise Financial. Like you, I’m an individual with short- and long-term goals. It goes without saying that the markets have been hard on all of us lately. Those of you who have some experience with investing know that we’ve encountered similar episodes of market volatility in the past. We’ll take a look at how the environment today compares with those of other volatile market periods, and discuss different ways you can respond to the challenges that exist in today’s market. What I hope you come away with is a better perspective about what is going on in the market, how it affects you and your portfolio and steps you can take to make sure you stay on track to plan to achieve your financial goals. Let me remind you that Ameriprise Financial cannot guarantee future financial results and doesn’t provide tax or legal advice. You should seek the advice of your tax or legal advisors. I’ll do my best to address your concerns [today] [tonight], and I will answer questions after my presentation. Before we get started, I’d like to tell you a little more about myself. [APPROPRIATELY DESCRIBE CREDENTIALS, DEPENDING ON AUDIENCE: DEGREES, DESIGNATIONS, LICENSES, YEARS OF EXPERIENCE, COMMUNITY ORGANIZATIONS, ETC. USE INFORMATION FROM YOUR APPROVED BIOGRAPHY AS A GUIDE.] [ADVANCE SLIDE]
  • Let me outline for you the key issues we will discuss [TODAY] [TONIGHT] . We’ll start with some brief background on what has brought about the most recent challenges in the markets. Then, we’ll focus on giving you some perspective – how today’s environment compares to other periods we’ve been through over the years. We’ll lay out a number of fundamental strategies that can be particularly effective in times like these – including diversification, dollar-cost averaging and portfolio rebalancing. Along with looking at what appear to be logical approaches to investing, I’m also going to spend a few minutes on something that can become a driving factor when markets are at their most volatile – emotions. We’ll talk about the importance of keeping emotions in check as you make investment decisions. Coping emotionally in these turbulent times highlights the importance of financial planning and the benefits of having a knowledgeable advisor you can work with to help stay on track to meet your goals. We’ll talk about that as we close out today’s presentation. So let’s get started. [ADVANCE SLIDE]
  • [Let me share with you what we have learned in our long history, our current standing, our philosophy for helping clients succeed, our view on the markets today, and actions we believe you can take in this turbulent environment. [AFSI only ] With 115 years of history, Ameriprise Financial has been through many up and down markets. In the 1970s we helped pioneered financial planning and have used it to help our clients ever since. We serve millions of clients by providing financial solutions to help them reach their goals. Along the way we’ve learned a lot. I look forward to sharing some of what we have learned with you. More people come to Ameriprise for financial planning than any other company. As a result, we are America’s largest financial planning company.* It is important to know that Ameriprise operates from a position of relative strength compared with some of the firms recently in the news: We consistently maintain substantial excess capital and liquidity to help us weather difficult times. The vast majority of assets owned by Ameriprise Financial hold investment-grade credit ratings. Ameriprise Financial is not immune to today’s difficult financial conditions. However, we have a history of managing our firm, assets and expenses prudently and choosing our investing opportunities carefully. [AASI only] With 115 years of history, our parent company, Ameriprise Financial has been through many up and down markets. In the 1970s we helped pioneered financial planning. We serve millions of clients by providing financial solutions to help them reach their goals. Along the way we’ve learned a lot. I look forward to sharing some of what we have learned with you. It is important to know that Ameriprise operates from a position of relative strength compared with some of the firms recently in the news: We consistently maintain substantial excess capital and liquidity to help us weather difficult times. The vast majority of assets owned by Ameriprise Financial hold investment-grade credit ratings. Ameriprise Financial is not immune to today’s difficult financial conditions. However, we have a history of managing our firm, assets and expenses prudently and choosing our investing opportunities carefully. [ADVANCE SLIDE] *Based on the number of financial plans annually disclosed in Form ADV, Part 1A, Item 5, available at adviserinfo.sec.gov as of December 31, 2008, and the number of CFP ® professionals documented by the Certified Financial Planner Board of Standards, Inc.
  • Much of what we will talk about [today] [tonight] has to do with not just what is happening in the markets, but also how we try to help our clients more holistically through times like these. We believe in a Four Cornerstones approach. These concepts or cornerstones are the foundation of how we help clients manage through good times as well as tough times. This involves managing cash and liabilities to address your cash-flow needs and secure financing for immediate and long-term needs; solutions to protect what you have, your ability to earn income, and manage risk; leveraging tax-advantaged strategies to manage taxes and of course, the focus of today’s discussion, managing investments. This includes fundamentals like the value of diversification, taking a long-term view, reviewing and rebalancing your portfolio on a periodic basis, and dollar-cost averaging. Let me make myself clear however, we believe that a well rounded financial plan that addresses all four cornerstones is critical. This is foundational to what we believe helps our clients plan for their financial goals over the long term. [ADVANCE SLIDE]
  • I imagine many of you have been closely following what has been happening lately in the markets, but let’s talk for just a few minutes about what has transpired. As is the case in any volatile market, there are a number of factors contributing to our current environment, but let’s focus on some of the most important. The events of the last few months have been brewing for a while. The oversupply of credit back in 2003/2004 had resulted in unprecedented spending resulting in the overvaluing of many assets and eventually undermined the creditworthiness of many businesses. The U.S. housing market faltered first. Housing values which had risen dramatically on a nationwide basis for a period of years, saw a significant reversal. That turnaround began to occur in 2006, gained steam in 2007 and continued into 2008. Subprime mortgages were another factor. A number of these mortgages were given to borrowers who, as it turns out, were not able to live up to the terms of the transaction. The problems spread because a number of financial institutions invested significant sums of money in securities backed, at least in part, by subprime mortgages that turned out to be worth less than their face value. This problem has continued on. The effects of this problem have been felt on a global basis. Many overseas firms invested in these securities, and this has helped to spread the problem to other markets. As a result, many firms relied on to provide credit to help financial institutions and businesses operate, have been reluctant to issue credit as freely as they did in the past. Hence, the credit crisis has created a situation that has required government intervention to help keep markets working smoothly. With that as background, now let me bring you up to speed on more recent market developments. [Note to advisor: At this point insert brief, up-to-date market commentary as posted weekly to Seminar Site on AdvisorCompass ® portal.] [ADVANCE SLIDE]
  • We all know there have been difficult times before, but every so often, we hear people on TV or in conversation say, “but this time is different.” So let’s talk about the environment that has made things so different today: As we noted earlier, real estate prices collapsed. The Dow Jones Industrial Average had its largest one-day loss. The sub-prime bond market fell apart, the housing market is struggling, credit is becoming hard to get and a number of large savings institutions faced severe problems. The government approved a bailout package, putting billions of dollars of taxpayer money to work to deal with troubled financial firms. The economy began its slide then, which of course, has triggered even more fear in the markets and another decline in stocks. Sounds like we just described the last few months, doesn’t it? But in fact… [ANIMATION REVEALS 1987-1991] … .we’re talking about the period from 1987 to 1991. We had a downturn in real estate, the crash of October 1987, of course, severe problems with junk bonds, the savings and loan scandal that required government intervention and eventually, a recession in 1990 and 1991. The point is that while it may seem different today, we’ve seen troubled markets before. [ADVANCE SLIDE]
  • Historically, the S&amp;P 500 has returned close to 10% per year over time. Of course, that is just an average. And an average is just a number that falls between two or more other numbers that typically are higher or lower than the average. Going back to 1926, if you look at this chart, you see a number of years when stocks finished well above 10%, and other years where it was below 10%, or in some cases, even in negative territory. Only twice over the last 82 years has the market finished right at the 10% mark, both of those were more recent, in 1993 and 2004. Just remember that on an annual basis, the average does not mean much. That’s what we mean by the “flaw of averages.” Year-by-year, you will experience a wide range of returns . Taken together, they should amount to an annualized return close to the historical average. That means owning stocks for the long term provides the best opportunity to achieve the historical average. A financial advisor can help you determine what return you need to help you reach your goals over time. [Advance Slide]
  • We’ve been looking at volatility in the stock market. Now, how do we specifically measure volatility? We do it by a concept called standard deviation. It defines a range of returns you can expect to see over time in a given investment or in a portfolio. In this example the average return between 1979 and 2009 is 11% [POINT TO SOLID BLUE LINE] with volatility, or standard deviation of about 15%. This means that typically, in any given year, you will see returns of between 26% and -4%. There are years when the returns are even more dramatic, and when those extremes occur, you will typically find returns falling between 41% on the positive side and -19% on the negative side [ POINT TO DOTTED ORANGE LINES] . In 5% of situations, the returns will fall outside of even those wide ranges, [POINT TO SOLID ORANGE LINE] but that is an exception. Chances are, your portfolio does not consist of all stocks, so it is likely that the actual volatility in your portfolio is less than this. You have probably heard the term “risk tolerance.” What we mean when we talk about that is your ability to cope with volatility and potential for investment loss. For example, if you are not comfortable with the possibility that stocks might go down 20% in a given year, you may want to reconsider whether you should be invested in all stocks. A financial advisor can help you review your risk tolerance level and work with you to determine what’s most appropriate for your situation. [Advance Slide]
  • I find that this is another good way to help understand how returns can vary. This chart breaks out each year in the market from 1970 through 2009. As you can see, most of the time, the years in black, stocks went up. But in some cases, the years in red, they declined. Let me touch for a minute on the idea of depth and breadth of declines. There is no doubt that the recent action in the market has certainly created a deeper downturn. The next question is how long these losses will extend, the breadth of the decline. Nobody can say for certain, of course, but keep in mind that there have been a couple of instances when it did last awhile. Let’s look at 1973 and 1974, two consecutive years of down markets, and 2000 through 2002, three straight years of down markets. In each case, the S&amp;P 500 lost almost half of its value during the period of those declines. These aren’t happy memories, but they do serve as a reminder of what the market can do. And of course, we can’t forget that over time, the market has always bounced back. The ratio of years with positive returns versus years with negative returns is about two-and-a-half to one. So at times like these it is helpful to remember that there are a lot more years with the markets in the black than in the red. [Advance Slide]
  • This chart showing returns form the S&amp;P 500 Market Index, serves as a good lesson that the longer you hold your equity investments, the more predictable the returns. In any given year, based on the historical record, the range of returns of stocks is dramatic – here you can see that the worst 12-month period showed the stock market down 43%, while it was up 61% in the best year. Over a five-year period, annualized returns are a bit more predictable, and as you see, on an historical basis, by the time the holding period reaches 20 years, the group of stocks within S&amp;P 500 has not lost money. In general, the longer you hold an investment, the less likely it is that you will end up with negative returns. The longer you have to invest, the benefits are obvious. Returns even out. If you are retired or near retirement, this might be a time to take some volatility out of your portfolio and position it in a more conservative fashion. That being said, I must point out this example is not a guarantee of future results. A financial advisor can work with you to determine your tolerance for risk and help you build an appropriate strategy. [Advance slide]
  • Just another point to keep in mind – while long-range returns tend to average out, performance can vary even within a specific period of years. In this case, we’ve broken it out into decades, starting with the 1920s. As you can see, there is a lot of inconsistency here. But also a good reminder – historically, after a negative decade occurs, such as the 1930s, good things have followed. Historically, we’ve never had two weak performing decades in succession. [Advance Slide]
  • So where do we stand in the 2000s? As you can see, we started on a difficult note – with three consecutive down years, each worse than the previous one. Things improved dramatically in 2003 and we were a bit steadier, up until 2008. As it stands today, the 2000s will go down as one of the weakest decades. Could this also represent a tremendous opportunity? [Advance slide]
  • According the historic performance of the S&amp;P Market Index, you can see that, by decade, there are more highs than lows. [Advance slide]
  • Now let’s spend a few minutes talking about some fundamental strategies that can help you stay on the right course and more effectively manage today’s market environment. We’ll go over ways to reduce volatility in your portfolio through diversification – one of the fundamentals we believe in. We’ll also explain the value of rebalancing your existing portfolio, and how a fixed and systematic investment strategy – dollar-cost averaging – can help you continue to invest with confidence. Dollar-cost averaging involves continuous investment of fixed dollar amount in securities, regardless of fluctuating price levels. Investors should consider their ability to continue purchases through periods of low price levels. Diversification and asset allocation help spread risk throughout your portfolio, so that investments that do poorly may be balanced by others that do relatively better. Dollar-cost averaging, diversification and asset allocation do not guarantee overall portfolio profit or protect against loss in declining markets. Neither Ameriprise Financial nor its representatives or affiliates provide tax or legal advice. Consult with your tax advisor or attorney regarding specific issues. With any moves you make, we want to emphasize that you be aware of any possible tax ramifications. One more point – a critical part of being able to overcome these challenging periods in the market and to stay on track to meet your most important goals is to make sure that emotion doesn’t get the best of your investment decision making. We’ll talk more about that. [ADVANCE SLIDE]
  • We spoke before about standard deviation – the measure of volatility in a particular asset class or investment. We know from what we just saw on the quilt chart that performance can vary from year to year for a particular asset class. But the degree of variation can differ from one asset type to another. Here is a quick demonstration of what standard deviation looks like for two different types of investments – stocks and bonds. When you compare the average return and volatility of these two asset classes, there is a noticeable difference. The bar on the left shows that stocks return, on average, about 11% per year over an extended period of time, but the range of returns can be fairly wide. The bar on the right represents bonds. You can see that the average return is lower, but also notice how the variance in returns is significantly less than is the case with stocks. The important point here is that if you had stocks in your portfolio, which can be subject to a fair amount of fluctuation from year-to-year, you could temper that volatility somewhat by including bonds as part of the asset mix. This is where the concept of diversification comes into play. And diversification is a very important strategy to help you deal with volatile markets and negative economic developments. Let’s look at different ways you can protect yourself through diversification. [ADVANCE SLIDE]
  • You don’t want to own one stock or one mutual fund or have all of your money in cash. You want a diversified mix of assets that is consistent with your level of risk tolerance while still helping you achieve a return that makes your goals attainable. You should also own a mix of investment products. Depending on your circumstances, this could include mutual funds, maybe annuities or exchange-traded funds, or individual securities in some cases. This helps your portfolio handle market volatility better by spreading risk among multiple types of investments. Finally, there’s tax diversification, something that ties into one of the four cornerstones we mentioned earlier. Tax diversification is particularly applicable when you retire, but you need to plan ahead for it. For instance, if all of your retirement savings is coming out of a company 401(k) plan, it is very possible that every dollar will be taxable when you take a distribution. That means you will have to withdraw more money to both fund your retirement and pay the corresponding tax bill, and your assets will deplete more quickly. If you also have taxable assets, where no additional tax is due, or tax-free holdings like a Roth IRA, you may be able to more effectively manage your retirement income stream. Good planning is crucial to achieving good tax diversification. Working with an Ameriprise financial advisor, we can help you diversify at all these levels, each important in helping you achieve your goals. [Advance Slide]
  • Here’s a real-world example of diversification with this chart which shows actual returns of two asset classes – stocks and bonds. Stock returns year-after-year are represented by the red line. Bond returns are the blue line. Both fluctuate in value, but you can see that bonds are less volatile than stocks. If we mix the two, the green line shows that the return is a bit more predictable than if we had just invested in stocks. This demonstrates how you can temper market volatility by taking advantage of diversification. This chart also helps us understand another key to diversification – combining assets that offer benefits in terms of how their performance correlates. In some periods here, we can see that stocks and bonds tended to track along the same path, but bonds generally were less volatile. Let’s look at this period from 2000 to 2009. Here, you see that stocks and bonds diverged quite significantly in performance. This is where the benefits of diversification become even more obvious. In that period from 2000 to 2002, when stocks were down, a portfolio that included bonds helped to smooth out the risk, and you can see by looking at the green line that a mix of stocks and bonds weathered that volatile period much more effectively than if you invested only in stocks. This example just shows a mix of large-cap stocks and bonds. Your advisor can work with you to determine a well-diversified mix of assets that can help you achieve an appropriate balance for your portfolio. [ADVANCE SLIDE]
  • When you have a diversified portfolio, another key discipline of successful investing is to regularly review that portfolio and, if appropriate, rebalance. Simply put, rebalancing has you take some gains off the table when an investment or asset class is performing particularly well, and buy another asset class that has been underperforming in your portfolio. For example, the first pie chart on the left shows the initial allocation in a portfolio of 50% stocks and 50% bonds. Let’s just assume in this instance that after one year, the stock portion has performed well enough that the portfolio composition has changed. Stocks now represent 60% of the mix and bonds are 40%. With rebalancing, you would sell enough of the stock position to be reinvested in bonds, so that the mix is again at a 50-50 split. This may seem counterintuitive. After all, if an investment is performing well, what is your natural instinct? [WAIT FOR RESPONSE] It is to buy more of it – just like the pattern we saw when we talked about emotional investing. And likewise, if an asset is not performing so well, you would be inclined to do the opposite, and sell it. With rebalancing, you sell a part of what’s working well and buy more of the other. The purpose is partly to put more money to work in an asset class that may be down, but could be poised for a recovery. The other reason is to manage risk. If an asset class like stocks, or maybe in a more diversified portfolio, an even more volatile asset class like small-cap stocks or international stocks, becomes overweight, you are suddenly taking on more risk in your portfolio than you may have planned for. Rebalancing allows you to make non-emotional decisions to buy low and sell high. This technique helps you maintain investment discipline, manage risk and keep emotions in check. Sometimes, rebalancing isn’t enough. You may also need to reallocate or readjust your target allocations as your situation changes. Again, working with a financial advisor can help you with this. [Advance slide]
  • We’ve talked about how diversification and rebalancing can help you manage your existing portfolio. But some of you may be wondering whether now is a good time to invest additional dollars. Using a strategy like dollar-cost averaging, the answer is “yes.” The concept is simple and straightforward – putting money into investments on a regular basis, regardless of market conditions. With dollar-cost averaging, when prices are low, your investment purchases more shares. When prices rise, you purchase fewer shares. Over time, the average cost of your shares will usually be lower than the average price of those shares. It’s a disciplined way to keep on saving without being concerned about what may be going on in the market. Best part is, it’s easy to do through your workplace retirement plan or other systematic investing program through your advisor. Let me explain how it can work. I’m going to show you three hypothetical scenarios. First, here’s what happens when stocks are going up. Let’s say Alex, putting in $1,000 per month, bought the stock at $10/share in the first month, paid $12/share in month two, and so on. The stock price went up every month. While Alex also would have benefited from a lump sum investment made in the first month, that would have required good timing. By making regular monthly investments, Alex still kept the actual cost per share he paid lower than the average price per share over that time, and still came out ahead, with a 41% gain during this period on his original $6,000 investment. [ADVANCE SLIDE]
  • Now let’s look at the same example but this time Alex is investing in a period when the market goes down a bit, but ends up flat. His $1,000 monthly investment is made over six months, with share prices starting at $20, then $15, down to $10 twice in a row, then back up to $15 and finally to $20. In the end, $6,000 was invested, just as in the previous example, but a 44% return was already achieved, thanks to the continuing investments made when the share price was lower. That allowed more shares to be purchased, which benefited Alex when the stock moved back up again to $20. [ADVANCE SLIDE]
  • Finally, here’s a hypothetical situation where the market goes down and stays lower a few months later. Alex started with share purchases at $20, then $15, $10, then $5 for two straight months and back up to $10/share. While the stock is down 50% over the six month period, Alex is ahead from the initial $6,000 invested with an ending balance of $7167. This is a great example of how you can benefit even in a down market by making consistent investments over time. As I move through this example please note, dollar cost averaging does not assure a profit or protect against loss in declining markets. This type of plan involves continuous investment in securities, regardless of fluctuating price levels. Investors should consider their ability to continue purchases through periods of low price levels. [ADVANCE SLIDE]
  • So let’s sum up the result of dollar-cost averaging in these three scenarios. First, let’s note that in each case, Alex generated a positive return. The first example involved making regular investments as the market moved straight up. This generated a 41% gain over the time period shown. The second example showed a market that first declined significantly, then regained all of that lost ground. But even though the market ended up right where it was at the start of the investment period, and went no higher, the total gain for the period compared to the amount invested was 44%. The third example shows what happens when investing in a market that does decline dramatically, but recovers only partially. Even though the market is still significantly below where it was at the start of the investment cycle, Alex is ahead by almost 3%. The point here is that while dollar-cost averaging can not guarantee against investment loss, in many scenarios, you still can benefit, even if the market is not always in your favor. So it’s important to continue to make regular contributions to your retirement plan at work and into any other savings vehicles available to you. [ADVANCE SLIDE]
  • The strategies we’ve just discussed – diversification, rebalancing and dollar-cost averaging – are all disciplines of investing that allow you to make “non-emotional decisions” about your portfolio. That is not something that is always easy to do, especially when markets are gyrating the way they have been lately. What are the two great emotions in the market? [WAIT FOR RESPONSES] Maybe if you answered fear and greed, you’d be right. I’m using this illustration to talk about the risk that emotion becomes the driving force in your investment decisions. Emotion has its place, but generally speaking, it is probably not with an investment portfolio. Emotion is often driven by expectations. The series of slides we’ve just discussed, showing historical market performance and the history of volatility in stocks, was done for a primary purpose – to give you some perspective, and maybe if you need it, help adjust your expectations – that stocks will go down at times, but history has shown us that they have recovered. If expectation drives emotion, the next step is that emotion drives behavior – the actions you take. In the case of your portfolio, it is your buy-and-sell decisions. If you take a look at this, I think you’ll recognize the various stages of emotion that can come into play. [CLICK TO REVEAL POSTIIVE EMOTIONS]. On the way up, we have optimism, that turns into excitement, that creates a sense of thrills and finally outright euphoria. Those who were around in the last 1990s and the DOT-COM bubble, will remember this. At the peak, everybody wants in. Is that a good decision? [WAIT FOR REPLY] Of course not – when you look at it this way, it is clear as it can be that prices are outrageously high, and the risk is great. Then, the market turns, as it inevitably does. [CLICK TO REVEAL NEGATIVE EMOTIONS] You recognize these various stages of emotion on the way down – after all, for some of you, these might be hitting close to home today. Near the bottom, we reach capitulation. It feels like everybody is selling, and the price just sinks lower. This is the point when wise investors see opportunity. Nobody can predict exactly when that low point occurs, but emotionally it is a difficult time to buy. [CLICK TO REVEAL RETURN OF POSITIVE EMOTIONS] This is followed by the next move up. The great investor, Warren Buffet, has said often that when the market is greedy, be fearful, and when the market is fearful, be greedy. Fear and greed. We see the greed at the euphoria stage, and clearly, where we are at now, there is a lot of fear. So at times like these, there can be the potential for great opportunity – depending on your own personal circumstances of course. But keep in mind that a good financial plan and guidance from an advisor can help you stay on track when your emotions are telling you otherwise. [Advance Slide]
  • Investors acting on their emotions tend to get into trouble, and they tend to underperform the market. Let me show you what I mean. This chart is based on a recent study by a company that does research in the mutual fund business. Going back to 1986, it showed that the stock market returned almost 12% per year, through 2006. So does that mean investors earned 12% per year? Unfortunately, no. The average equity investor instead earned a little over 4%, barely better than the inflation rate. Why does this happen? Because too many of us let our emotions drive our decision-making. [Advance Slide]
  • [This slide for AFSI presenters only. Not for AASI use ] I’ve mentioned throughout our discussion today that a financial plan can go a long way toward helping you prepare for times like these. That isn’t just my opinion. A recent study* conducted jointly for Ameriprise Financial and the Financial Planning Association showed that those with a comprehensive financial plan, defined as a written plan prepared by a paid advisor that covers a minimum of three of the key areas of financial planning, are 50% more likely to feel their goals are financially secure than those without a plan. As those of you in this room who do ongoing planning with us can probably attest, that kind of preparation can be beneficial when the markets are testing us. A plan is so important to my clients because it gives them something more important to focus on than the day-to-day developments in the market – their own goals. We take time to help you assess your risk tolerance. Knowing this ahead of time is a great way to set expectations and help you avoid making emotional decisions about your money Through the years, our clients have benefited from our approach to investing, using time-tested disciplines that help them stay on track even through the worst of markets. These include regular rebalancing of portfolios, dollar-cost averaging, and taking advantage of good buying opportunities when they exist. We understand that good returns are also due, in part, to being tax smart. That means making smart money moves which may give you the opportunity to achieve a higher after-tax return. One of the real benefits of working with an advisor is to have somebody helping you watch over your portfolio, and making sure you are still on track to make your plan a reality. We know from our experience that if we do our job, we help you make informed, intelligent and rational decisions. And that is more important than ever at a time like this, when it is so easy for many investors to get carried away with their emotions and make critical mistakes. That may be one of the most important benefits of having a financial plan and a knowledgeable advisor – helping you avoid costly mistakes that can derail your investing strategy and your progress toward achieving your financial goals. [Advance Slide]
  • Now let’s talk about additional active steps you can take for where you are in your life. Does that sound fine? [WATCH FOR NODS.] Great. [Advance Slide]
  • [This slide for ASFI only. Not for use by AASI] So to summarize, here is what we suggest you consider doing to deal with the challenges we’re facing in the markets today. First, to be prepared for the inevitable – which is further market volatility, whether it happens next month, next year or in five years, make sure your portfolio is properly diversified. Second, review your portfolio and, as appropriate, rebalance it so you return it to the asset mix that you started with and that was determined to be appropriate for your level of risk tolerance, your timeframe, and your investment objectives. Third, if you have money to invest, consider doing so beginning now using a fixed systematic investment strategy – dollar-cost averaging. If you have a lump sum to invest, spread it out over six to twelve months. If you make regular investments in a retirement plan or college savings plan, continue to do so. That will give you the opportunity to put dollar-cost averaging to work for you. Avoid market timing. Too many investors get it wrong. Even the pros have a spotty track record when it comes to that. Success comes from a long-term commitment. But at the same time, be prepared to take advantage of opportunities when they appear. Next, don’t let your emotions send you down the wrong path on the road to your financial goals. Finally, if you don’t have a plan, you should get one to help put you on the right path. If you have one, it may be a prime time to sit down and review that plan with your advisor to make sure you are comfortable with your goals and strategy and, if necessary, make any adjustments. [ADVANCE SLIDE]
  • [This slide for ASSI only] So to summarize, here is what we suggest you consider doing to deal with the challenges we’re facing in the markets today. First, to be prepared for the inevitable – which is further market volatility, whether it happens next month, next year or in five years, make sure your portfolio is properly diversified. Second, review your portfolio and, as appropriate, rebalance it so you return it to the asset mix that you started with and that was determined to be appropriate for your level of risk tolerance, your timeframe, and your investment objectives. Third, if you have money to invest, consider doing so beginning now using a fixed and systematic investment strategy – dollar-cost averaging. If you have a lump sum to invest, spread it out over six to twelve months. If you make regular investments in a retirement plan or college savings plan, continue to do so. That will give you the opportunity to put dollar-cost averaging to work for you. Avoid market timing. Too many investors get it wrong. Even the pros have a spotty track record when it comes to that. Success comes from a long-term commitment. But at the same time, be prepared to take advantage of opportunities when they appear. Next, don’t let your emotions send you down the wrong path on the road to your financial goals. [ADVANCE SLIDE]
  • I’ve covered a lot of material [TODAY] [TONIGHT] and I hope I’ve gotten you thinking about why planning makes sense for just about everyone. I have time for three questions now. If you have something you’d like to ask me privately, please stay after the seminar. [WAIT FOR QUESTIONS.] Earlier, I mentioned two cards in your packet. Please take a moment to fill out the comment card and let me know how I did. Did you learn something from the presentation? Did it inspire you to take action? [For AAFI] If you think that what I do for my clients could help you, check this box on the comment card [HOLD UP CARD AND POINT TO BOX] to request a complimentary consultation. A complimentary consultation provides an overview of financial planning concepts, and gives us the opportunity to get to know each other. You will not receive any written analysis or recommendations at this meeting. [For AASI] If you think that what I do for my clients could help you, check this box on the comment card [HOLD UP CARD AND POINT TO BOX] to request a complimentary consultation. A complimentary consultation gives us the opportunity to get to know each other. You will not receive any written analysis or recommendations at this meeting. When you check the box, my assistant, [STATE NAME AND GESTURE TOWARD IF PRESENT] , or I will give you a call in a day or two to schedule an appointment to discuss your needs and those of your family. If, after that meeting, you decide I can be of help to you, we’ll start by working together to develop an estate plan that complements your overall goals. When you fill out the referral card [HOLD UP SECOND CARD ], let me know of friends, coworkers and, of course, family members who you think could benefit from hearing what you experienced [TODAY] [TONIGHT]. Also, let me know if you’d like information about other topics I’ll give you a minute now to complete the cards. [STAND TO THE SIDE AS CARDS ARE FILLED OUT.] [IF HOLDING A DRAWING FOR A STARBUCKS GIFT CARD OR OTHER PRIZE, GATHER THE CARDS AND CONDUCT THE DRAWING NOW. ALL DOOR PRIZE DRAWINGS MUST BE CONDUCTED IN COMPLIANCE WITH RIC 10.4.]
  • [NOTE to advisor: View in slide show mode to play filmstrip.]
  • [NOTE to advisor: View in slide show mode to play filmstrip.]
  • [NOTE to advisor: View in slide show mode to play filmstrip.]
  • [NOTE to advisor: View in slide show mode to play filmstrip.]
  • [NOTE to advisor: View in slide show mode to play filmstrip.]
  • [NOTE to advisor: View in slide show mode to play filmstrip.]
  • Thank you for giving me your time and attention today. Whether we meet again or not, please use the six steps we outlined [today] [tonight]. They’re great ways to get to what’s next in your future.
  • Actions You Can Take In A Volatile Market

    1. 1. <ul><li>Actions You Can Take in a Volatile Market </li></ul>Now more than ever, you need a plan Bruce Gillen, CFP ® 6/21/2010
    2. 2. Today’s agenda <ul><li>How we arrived where we are today </li></ul><ul><li>Putting today’s markets in historical perspective </li></ul><ul><li>Fundamental investment strategies to help you deal with and even find opportunity in volatile markets </li></ul><ul><li>Managing emotions as part of the investment process </li></ul><ul><li>Steps to consider taking now </li></ul>
    3. 3. Ameriprise Financial <ul><li>What we learned in our 115-year history </li></ul><ul><li>More people come to Ameriprise Financial for financial planning than any other company* </li></ul><ul><li>Ameriprise is America’s largest financial planning company* </li></ul>* Based on the number of financial plans annually disclosed in Form ADV, Part 1A, Item 5, available at adviserinfo.sec.gov as of December 31, 2007, and the number of CFP ® professionals documented by the Certified Financial Planner Board of Standards, Inc.
    4. 4. Our four cornerstones
    5. 5. What’s been driving recent market volatility? <ul><li>An oversupply of lending which drove up home values and resulted in the eventual collapse of the U.S. housing market </li></ul><ul><li>Repercussions from the subprime mortgage crisis which spread to global capital markets </li></ul><ul><li>The residual impact of the current credit crisis and the follow-on effect it has had on the global economy </li></ul>
    6. 6. I read the news today <ul><ul><li>Real estate prices collapse </li></ul></ul><ul><ul><li>Largest one-day loss in the Dow Jones Industrial Average </li></ul></ul><ul><ul><li>Sub-prime bond market collapses, real estate continues to decline, credit dries up, savings institutions weaken </li></ul></ul><ul><ul><li>Government bailout is enacted. Billions of taxpayer dollars spent to deal with failing lending institutions </li></ul></ul><ul><ul><li>Recession sets in leading to another stock market decline </li></ul></ul>1987-1991
    7. 7. The “flaw” of averages <ul><li>S&P 500 Annual Returns 1926-2009 </li></ul>Source: Ibbotson for 1926 to 1969; Standard & Poor’s, 1970 to present.
    8. 8. Measuring volatility <ul><li>S&P 500 stock index 1979-2009: </li></ul><ul><li>Average return is about 11% </li></ul><ul><li>Standard deviation (volatility) has been about 15% </li></ul><ul><li>Range of returns is about 41% to -19% </li></ul><ul><li>Probability range is 95% — returns can be worse (or better) than those shown here </li></ul>11% 26% 41% -4% -19% Source: S&P 500. The S&P 500 Index is an unmanaged index commonly used to measure stock performance. It is not possible to invest directly in an index. Past performance is not a guarantee of future results.
    9. 9. The stock market has delivered over the long term <ul><li>From 1970 through 2009, the S&P 500 has returned an average of 9.87% per year </li></ul><ul><li>Returns in a given calendar year ranged from -37% to +37% </li></ul>Source: Standard & Poor’s 500 Index. Standard & Poor’s 500 Index. It is not possible to invest directly in an index. Standard & Poor's 500 Index (S&P 500 Index) is an unmanaged list of common stocks which includes 500 large companies, and is frequently used as a general measure of market performance. The index reflects reinvestment of all distributions and changes in the market prices, but excludes brokerage commissions or other fees. Past performance is not a guarantee of future results. Below -20% -20% – -10% -10% – 0% 0% – +10% +10% – +20% Over +20% 2008 2001 2000 2007 2006 2003 1983 2002 1973 1990 2005 2004 1999 1982 1974 1981 1994 1988 1998 1980 1977 1993 1986 1997 1975 1992 1979 1996 2009 1987 1976 1995 1984 1972 1991 1978 1971 1989 1970 1985
    10. 10. Historical range of returns of S&P 500: 1970-2009 Source: Standard and Poor’s 500 Index. The Standard & Poor’s 500 Market Index (S&P 500) is an unmanaged list of common stocks frequently used as a measure of market performance. The index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. The highest return is represented by the top of each bar and the lowest annual return is shown at the bottom. The rolling 5-,10- and 20-year ranges are also shown. Over time, lower performing years will be offset by higher performing years and vice versa. Therefore the range of the historical returns over the entire period is narrower than the range of returns in any single year. Returns over 1 year in length are annualized. It is not possible to invest directly in an index. Past performance is no guarantee of future results. 1 year 5 years 10 years 20 years 61 30 19 18 7 -2 -7 -43
    11. 11. Returns by decade Source: Standard & Poor’s 500 Index (S&P 500). S&P 500 Index returns assume reinvestment of all dividends and capital gains. The S&P 500 Index is an unmanaged index commonly used to measure stock market performance. It is not possible to invest directly in an index. Past performance is not a guarantee of future results. Decade # of years down # of years up 0–18% # of years up 18%+ Average annual return for decade 1920s 3 2 5 8.77% 1930s 6 0 4 -0.05% 1940s 3 2 5 9.17% 1950s 2 2 6 19.35% 1960s 3 4 3 7.81% 1970s 3 3 4 5.86% 1980s 1 3 6 17.55% 1990s 1 3 6 18.20% 2000-2009 4 4 2 -0.94% Average 2.9 2.6 4.6 9.52%
    12. 12. Where we stand in the current decade -9% 30 25 20 15 10 5 0 -5 -10 -15 -20 -25 -30 -35 -40 -12% -23% 28% 11% 5% 16% 5% 26% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Standard and Poor’s 500 Index. Annual Returns of S&P 500 Index, 2000-2008, assuming reinvestment of dividends. The S&P 500 Index is an unmanaged index commonly used to measure stock market performance. It is not possible to invest directly in an index. Past performance is not a guarantee of future results. -37%
    13. 13. Comparing this decade to others Annualized performance of the S&P 500 20 15 10 5 0 -5 Source: Standard and Poor’s 500 Index. S&P 500 Index returns assume reinvestment of all dividends and capital gains. The S&P 500 Index is an unmanaged index commonly used to measure stock market performance. It is not possible to invest directly in an index. Past performance is not a guarantee of future results. 19% 20s 30s 40s 50s 60s 70s 80s 90s 00s (1925 – 1929) (2000 – 2009) 9% -0.05% 9% 8% 6% 18% -1% 18%
    14. 14. Long-term investing strategies <ul><li>Diversify to manage business, market, and interest rate risk </li></ul><ul><li>Rebalance your portfolio if it is appropriate </li></ul><ul><li>Consider the current and future tax ramifications of your actions </li></ul><ul><li>Dollar-cost average to keep your investment strategy on track </li></ul><ul><li>Manage your emotions by following a disciplined plan based on solid fundamentals, not emotion </li></ul>Dollar-cost averaging involves continuous investment in securities, regardless of fluctuating price levels. Investors should consider their ability to continue purchases through periods of low price levels. Diversification and asset allocation help spread risk throughout your portfolio, so that investments that do poorly may be balanced by others that do relatively better. Dollar-cost averaging, diversification and asset allocation do not guarantee overall portfolio profit or protect against loss in declining markets. Neither Ameriprise Financial nor its representatives or affiliates provide tax or legal advice. Consult with your tax advisor or attorney regarding specific issues.
    15. 15. Historic volatility by standard deviation S&P 500 Stock Index 1976-2009 11% 26% 41% -4% -19% Barclays Capital Aggregate Bond Index (formerly Lehman Aggregate Bond Index) 1976-2009 Stocks Bonds 20% 14% 8% 3% -3% Source: PAG. Past performance is not a guarantee of future results. Barclays Capital Aggregate Bond Index (formerly Lehman Brothers Aggregate Bond Index), an unmanaged index, is made up of a representative list of government, corporate, asset-backed and mortgage-backed securities. The index is frequently used as a general measure of bond market performance. Standard & Poor's 500 Index (S&P 500 Index), an unmanaged list of common stocks, is frequently used as a general measure of market performance. The index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. You can not invest directly in an index.
    16. 16. Diversification options <ul><li>Asset classes (stocks, bonds, cash, real estate, etc.) </li></ul><ul><li>Investment products (e.g. mutual funds, annuities, ETFs) </li></ul><ul><li>Tax characteristics (taxable, tax-deferred, tax-free) </li></ul>Diversification helps you spread risk throughout your portfolio, so that investments that do poorly may be balanced by others that do relatively better. Diversification and asset allocation do not guarantee overall portfolio profit or protection against loss.
    17. 17. Diversification can temper market volatility <ul><li>Performance of Stocks, Bonds and 50/50 Mix 1990 to 2009 </li></ul>Barclays Capital Aggregate Bond Index (formerly Lehman Brothers Aggregate Bond Index) 1990 1999 50/50 Mix 2009 Source: Standard and Poor’s, Barclay’s Capital. Combined returns based on calculation of 50% of S&P 500 return, 50% of Barclays Capital Aggregate Bond Index return. Past performance does not guarantee future results. These examples do not reflect sales charges, taxes or other costs associated with investing. Barclays Capital Aggregate Bond Index (formerly Lehman Brothers Aggregate Bond Index), an unmanaged index, is made up of a representative list of government, corporate, asset-backed and mortgage-backed securities. The index is frequently used as a general measure of bond market performance. Standard & Poor's 500 Index (S&P 500 Index), an unmanaged list of common stocks, is frequently used as a general measure of market performance. The index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. You can not invest directly in an index. S&P 500 Index
    18. 18. Rebalancing can keep you on plan Initial allocation Rebalance back One year later Diversification helps you spread risk throughout your portfolio, so that investments that do poorly may be balanced by others that do relatively better. Diversification and asset allocation do not guarantee overall portfolio profit or protection against loss. 50% Bonds 50% Stocks 50% Stocks 50% Bonds 40% Bonds 60% Stocks
    19. 19. Dollar-cost averaging – price rises Average price: $15.00 Average cost: $14.19 Invested amount: $6,000.00 Ending value: $8,456.40 Dollar-cost averaging does not guarantee a profit or protect against losses in a declining market. Investors should consider their ability to continue investing during periods of low markets. This illustration is hypothetical and is not a forecast or guarantee of specific investment results. $25 $20 $15 $10 $5 $0 1 2 3 4 5 6
    20. 20. Dollar-cost averaging – market down, then recovers Average price: $15.00 Average cost: $13.85 Invested amount: $6,000.00 Ending value: $8,666.80 Dollar-cost averaging does not guarantee a profit or protect against losses in a declining market. Investors should consider their ability to continue investing during periods of low markets. This illustration is hypothetical and is not a forecast or guarantee of specific investment results. $25 $20 $15 $10 $5 $0 1 2 3 4 5 6
    21. 21. Dollar-cost averaging – market down, partial rebound Average price: $10.83 Average cost: $9.73 Invested amount: $6,000.00 Ending value: $7,166.70 Dollar-cost averaging does not guarantee a profit or protect against losses in a declining market. Investors should consider their ability to continue investing during periods of low markets. This illustration is hypothetical and is not a forecast or guarantee of specific investment results. $25 $20 $15 $10 $5 $0 1 2 3 4 5 6
    22. 22. Three different markets — three positive results <ul><li>Total invested – $6,000 in monthly $1,000 increments </li></ul>Dollar-cost averaging does not guarantee a profit or protect against losses in a declining market. Investors should consider their ability to continue investing during periods of low markets. This illustration is hypothetical and is not a forecast or guarantee of specific investment results. $10,000 $7,500 $5,000 Market goes up $8,456 Market down: full recovery $8,667 Market down: partial recovery $7,167
    23. 23. Understanding emotional investing Source: Radarwire.com. A product of Simon Economic Systems, Ltd. Optimism Relief Hope “ Things may be turning around.” Excitement Thrill Optimism “ Wow, I am making money. I feel good about this investment.” Euphoria A high point of financial risk Fear Denial “ This is just a temporary setback.” Desperation Anxiety Panic Capitulation Despondency “ I think I need to sell.” Depression A low point of financial opportunity
    24. 24. The average equity investor lags the market <ul><li>Equity market returns v. equity mutual fund investors’ returns </li></ul>0% 4% 8% 12% 16% Source: Dalbar, Inc., 2009 Quantitative Analysis of Investor Behavior for the period (1988 - 2008). Benchmark returns represented by total returns of the S&P 500. The Standard & Poor’s 500 Stock Market Index (S&P 500) is an unmanaged list of common stocks frequently used as a measure of market performance. You can not invest directly in an index. S&P 500 Index 8.4% 1.9% 2.9% Average equity Fund investor Inflation
    25. 25. Benefits of a personalized financial plan <ul><li>Focuses on your goals, not short-term market conditions </li></ul><ul><li>Assesses your risk tolerance </li></ul><ul><li>Employs time-tested disciplines to dampen market volatility, such as rebalancing, dollar-cost averaging and opportunity purchases </li></ul><ul><li>Takes taxes into consideration </li></ul><ul><li>Helps you neutralize the inclination to make emotional investment decisions </li></ul><ul><li>Provides for review and rebalancing on a regular basis </li></ul><ul><li>A financial plan can help you feel more on track during market turmoil* </li></ul>* The Financial Planning Association® (FPA®) and Ameriprise® Value of Financial Planning Study, was conducted by Harris Interactive in June/July, 2008 among 3,022 adults. While market volatility was significant during the study period, subsequent financial developments, which may have affected attitudes and behaviors, had not yet occurred. No estimates of theoretical sampling error can be calculated; a full methodology is available. Dollar-cost averaging involves continuous investment in securities, regardless of fluctuating price levels. Investors should consider their ability to continue purchases through periods of low price levels. Diversification and asset allocation help spread risk throughout your portfolio, so that investments that do poorly may be balanced by others that do relatively better. Dollar-cost averaging, diversification and asset allocation do not guarantee overall portfolio profit or protect against loss in declining markets. Neither Ameriprise Financial nor its representatives or affiliates provide tax or legal advice. Consult with your tax advisor or attorney regarding specific issues.
    26. 26. <ul><li>Steps you can take </li></ul>
    27. 27. Six steps to consider taking now <ul><li>1. Diversify, diversify, diversify </li></ul><ul><li>2. Rebalance or review your asset allocation </li></ul><ul><li>3. Dollar-cost average </li></ul><ul><li>4. Avoid market timing, but prepare for opportunities </li></ul><ul><li>5. Don’t let your emotions affect your financial future </li></ul><ul><li>6. Get or review your financial plan </li></ul>Dollar-cost averaging involves continuous investment in securities, regardless of fluctuating price levels. Investors should consider their ability to continue purchases through periods of low price levels. Diversification and asset allocation help spread risk throughout your portfolio, so that investments that do poorly may be balanced by others that do relatively better. Dollar-cost averaging, diversification and asset allocation do not guarantee overall portfolio profit or protect against loss in declining markets. Neither Ameriprise Financial nor its representatives or affiliates provide tax or legal advice. Consult with your tax advisor or attorney regarding specific issues.
    28. 28. Six steps to consider taking now <ul><li>1. Diversify, diversify, diversify </li></ul><ul><li>2. Rebalance or review your asset allocation </li></ul><ul><li>3. Dollar-cost average </li></ul><ul><li>4. Avoid market timing, but prepare for opportunities </li></ul><ul><li>5. Don’t let your emotions affect your financial future </li></ul>Dollar-cost averaging involves continuous investment in securities, regardless of fluctuating price levels. Investors should consider their ability to continue purchases through periods of low price levels. Diversification and asset allocation help spread risk throughout your portfolio, so that investments that do poorly may be balanced by others that do relatively better. Dollar-cost averaging, diversification and asset allocation do not guarantee overall portfolio profit or protect against loss in declining markets. Neither Ameriprise Financial nor its representatives or affiliates provide tax or legal advice. Consult with your tax advisor or attorney regarding specific issues.
    29. 29. Next steps
    30. 36. Let’s get started. Financial planning services and investments offered through Ameriprise Financial Services, Inc. Member FINRA and SIPC. © 2008-2009 Ameriprise Financial, Inc. All rights reserved. [Presenter name], [Presenter title] [Contact Information]
    1. A particular slide catching your eye?

      Clipping is a handy way to collect important slides you want to go back to later.

    ×