Recession
Bad news—or buying opportunity?
Good news during a recession:
          stocks are on sale.
          Recession—the very word causes confusion and uncerta...
Lord Abbett Affiliated Fund—
 Performance through Nine Recessions *
 As one of the oldest mutual funds in the United State...
In any period of market volatility, when peaks and valleys are                                    $10,000 investment (with...
$6,848,868




                                                                                                           ...
Generations of Stewardship
 As one of the oldest money management firms in the United
 States, Lord Abbett has consistentl...
Upcoming SlideShare
Loading in...5
×

Recession: Bad News - Or Buying Opportunity?

573

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
573
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Recession: Bad News - Or Buying Opportunity?"

  1. 1. Recession Bad news—or buying opportunity?
  2. 2. Good news during a recession: stocks are on sale. Recession—the very word causes confusion and uncertainty among investors. Yet, since the 1950s, the market has weathered nine recessions, but historically has recovered quickly, and has continued to grow over time. So it’s important to keep recessions in historical perspective. Consider: • What does it mean to be in a recession? A recession is generally defined as a decline in gross domestic product (GDP) for two or more consecutive quarters. • How often do recessions occur? Since the 1950s, the U.S. has experienced nine recessions, each lasting from six to 16 months. • When will I know if we are in a recession? A recession is usually announced months after it has already happened because economic numbers take time to compile. The last recession in 2001 wasn’t announced until six months after the market reached bottom. • What should I do as an investor? Typically, recessions have generated buying opportunities for investors. Often, this means investing when prices have fallen—buying low is not easy, but can potentially be very rewarding. We strongly recommend you consult your financial advisor on the best strategy for you. What follows is the performance of one of our oldest mutual funds through nine recessions. Investing involves risk, including the possible loss of principal. This material is provided for general and educational purposes only, is not intended to provide legal, tax, or investment advice, and does not account for individual investor circumstances. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon, and risk tolerance. Consult with your financial advisor before making any investment decisions. NOT FDIC INSURED–NO BANK GUARANTEE–MAY LOSE VALUE
  3. 3. Lord Abbett Affiliated Fund— Performance through Nine Recessions * As one of the oldest mutual funds in the United States, Lord Abbett Affiliated Fund has weathered every market cycle since 1934, posting one-year double-digit gains on the heels of eight of the past nine recessions. Investors who stayed invested in the Fund through these challenging market conditions were positioned to take advantage of the gains when the market recovered. $10,000,000 $5,000,000 $1,000,000 $500,000 Recession start: April 1960 1960 $100,000 Duration: 8 months Recession start: Aug. 1957 1957 Market bottom: Oct. 1960 Recession start: July 1953 Duration: 8 months 1953 Duration: 10 months Market bottom: Oct. 1957 $50,000 Returns from market bottom: Market bottom: Sept. 1953 After 1 year: 34.20% Returns from market bottom: $10,000 investment after 10 years: $21,619 Returns from market bottom: After 1 year: 36.21% Average annual return for 10-year period: 8.01% $10,000 investment after 10 years: $35,161 After 1 year: 27.28% Average annual return for 10-year period: 13.40% $10,000 investment after 10 years: $37,983 Average annual return for 10-year period: 14.28% $10,000 $5,000 ’50 ’51 ’52 ’53 ’54 ’55 ’56 ’57 ’58 ’59 ’60 ’61 ’62 ’63 ’64 ’65 ’66 01/01/50 Inception1 Calendar year ended Dec. 31 DIVIDENDS 579 646 708 728 808 887 970 1,053 1,137 1,164 1,374 1,420 1,586 1,714 1,989 2,299 2,284 TOTAL VALUE REINVEST ED VA L U E AT 2 12,281 14,404 16,396 16,710 22,072 24,825 26,114 26,054 37,466 42,301 44,773 56,263 51,758 61,631 71,901 80,842 75,901 YEA R-END TOTAL 22.87% 17.29% 13.84% 1.91% 32.09% 12.47% 5.19% -0.23% 43.80% 12.90% 5.84% 25.66% -8.01% 19.08% 16.66% 12.44% -6.11% RET U RNS * Performance of the Lord Abbett Affiliated Fund is measured beginning with the first trading day of the month following the market low. All performance is calculated at net asset value and includes reinvestment of all distributions. Peak and trough dates are from NBER (National Bureau of Economic Research) Website. Market bottom dates are from Ned Davis Research. LORD ABBETT AFFILIATED FUND AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH 5.75% MAXIMUM SALES CHARGE AS OF 09/30/08 AND INCLUDING THE REINVESTMENT OF ALL DISTRIBUTIONS: 1 YEAR: -28.06% 5 YEARS: 3.78% 10 YEARS: 5.03% EXPENSE RATIO: 0.81% (GROSS); N/A (NET) Sharp market fluctuations can materially change the character of a mutual fund’s track record.
  4. 4. In any period of market volatility, when peaks and valleys are $10,000 investment (with dividends reinvested) in the evident, investors must evaluate their circumstances and risk Lord Abbett Affiliated Fund during various market cycles tolerance. While investors can enjoy the benefits of gains in from 01/01/50–12/31/07. their portfolios, they must also understand that they can suffer Of course, past performance is no guarantee of future results, losses when the market goes the other way. and there is no guarantee that the Fund will perform in a similar The chart below shows the results of a hypothetical manner under similar circumstances in the future. Recession start: Jan. 1980 1980 Duration: 6 months 1974 Recession start: Nov. 1973 Market bottom: March 1980 Duration: 16 months 1970 Recession start: Dec. 1969 Market bottom: Oct. 1974 Duration: 11 months Returns from market bottom: Market bottom: May 1970 Returns from market bottom: After 1 year: 40.18% $10,000 investment after 10 years: $48,437 Returns from market bottom: After 1 year: 29.92% Average annual return for 10-year period: 17.09% $10,000 investment after 10 years: $44,716 After 1 year: 33.44% Average annual return for 10-year period: 16.16% $10,000 investment after 10 years: $28,882 Average annual return for 10-year period: 11.19% ’67 ’68 ’69 ’70 ’71 ’72 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 3,133 3,509 3,910 4,156 4,304 4,494 4,983 5,701 6,446 6,878 8,036 9,083 11,564 14,691 18,464 21,076 21,715 25,416 30,037 33,806 42,050 93,979 111,491 95,009 97,629 106,392 119,793 112,926 94,887 134,573 181,223 169,146 175,437 226,956 282,491 283,420 351,358 441,070 471,204 597,816 734,990 758,454 23.82% 18.63% -14.78% 2.76% 8.98% 12.60% -5.73% -15.97% 41.83% 34.66% -6.66% 3.72% 29.37% 24.47% 0.33% 23.97% 25.53% 6.83% 26.87% 22.95% 3.19% Performance data quoted above are historical. Past performance is no guarantee Initial investment of $10,000 occurred on 01/01/50 when Affiliated Fund adopted its current investment 1 philosophy. The Fund commenced operations on 05/14/34. of future results. Current performance may be higher or lower than the performance Total value figure represents total account value, assuming the reinvestment of dividends and capital 2 data quoted. The investment return and principal value of an investment in the gains distributions. Fund will fluctuate so that shares, on any given day or when redeemed, may be Time magazine illustrations used with permission. worth more or less than their original cost. You can obtain performance data A Note about Risk: The value of investments in equity securities will current to the most recent month-end by calling Lord Abbett at 888-522-2388 or fluctuate in response to general economic conditions and to changes in referring to our Website at www.lordabbett.com. the prospects of particular companies and/or sectors in the economy. These factors can affect Fund performance.
  5. 5. $6,848,868 Recession start: March 2001 2001 Duration: 8 months Market bottom: Sept. 2001 Recession start: July 1990 1990 Duration: 8 months Returns from market bottom: Recession start: July 1981 1982 Market bottom: Oct. 1990 After 1 year: -17.28% Duration: 16 months $10,000 investment worth today: $16,916** Returns from market bottom: Market bottom: Aug. 1982 Average annual return: 8.78%** After 1 year: 28.00% Returns from market bottom: $10,000 investment after 10 years: $50,774 ** 09/30/01–12/31/07. Average annual return for 10-year period: 17.64% After 1 year: 41.67% $10,000 investment after 10 years: $43,433 Average annual return for 10-year period: 15.82% ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ‘05 ’06 ’07 41,821 44,714 44,394 45,695 48,171 44,997 46,911 49,807 56,292 62,380 55,828 60,886 68,835 76,021 68,771 70,562 71,838 74,639 81,071 91,035 855,621 1,056,961 1,001,679 1,222,061 1,373,511 1,554,986 1,618,110 2,131,046 2,558,324 3,202,027 3,663,632 4,282,020 4,934,626 4,542,668 3,688,985 4,828,520 5,436,783 5,617,857 6,606,904 6,848,868 12.81% 23.53% -5.23% 22.00% 12.39% 13.21% 4.06% 31.70% 20.05% 25.16% 14.42% 16.88% 15.24% -7.94% -18.79% 30.89% 12.60% 3.33% 17.61% 3.66% Class A shares purchased subject to a front-end sales charge have no contingent deferred sales charge (CDSC). However, certain purchases of Class A shares made without a front-end sales charge may be subject to a CDSC of AVERAGE ANNUAL TOTAL RETURN AT NET ASSET 1% if the shares are redeemed before the first day of the month in which the one-year anniversary of the purchase VALUE OVER THIS PERIOD: 11.92% falls. Please see the prospectus for more information on redemptions that may be subject to a CDSC. The CDSC is Average annual total return reflects the percent change in not reflected in the average annual total returns. If the CDSC was included, returns would have been lower. net asset value (NAV) of Class A shares and includes the Sources: Lipper, Inc. and Ibbotson. reinvestment of all distributions.
  6. 6. Generations of Stewardship As one of the oldest money management firms in the United States, Lord Abbett has consistently served the investment needs of generations of investors, financial advisors, and institutions, and continues to serve as a trusted steward of more than $87 billion* in client assets today. We would consider it a privilege to partner with you. * As of September 30, 2008. A prospectus contains important information about a fund, including its investment objectives, risks, charges, and ongoing expenses, which an investor should carefully consider before investing. To obtain a prospectus on any Lord Abbett mutual fund, contact Lord Abbett Distributor LLC at 888-522-2388, or visit our Website at www.lordabbett.com. Read the prospectus carefully before investing. Copyright ©2008 by Lord Abbett Distributor LLC. All rights reserved. for more information Lord Abbett Client Services Website 888-L-ABBETT www.lordabbett.com 888-522-2388 Lord Abbett mutual fund shares are distributed by LORD ABBETT DISTRIBUTOR LLC. RECESSIONBRO 90 Hudson Street, Jersey City, NJ 07302-3973 (10/08) NOT FDIC INSURED–NO BANK GUARANTEE–MAY LOSE VALUE

×