Be Patient with the market report

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Be Patient with the market report

  1. 1. RES-5357-U AUG 2009 U K S t r a t e g y r e p o r t patIeNCe aND perSpeCtIVe Since 1963, the total return from the FTSE All-Share has If you look at 10-year annualised returns for the FTSE averaged 11.6%, which includes reinvested dividends and All-Share, they vary less than those for one year. In price changes. However, there are only a few years that are addition, the years cluster more tightly around the average, as illustrated in the chart below. The yearly gains long-term average of 11.6% per annum. Whilst no one and losses for the FTSE All-Share, as shown on the histogram, can predict short-term returns, consider staying invested help provide a good perspective on the wide range of over time to help you achieve the results you expect. actual returns for the UK market. Keep in mind that: Please note that: ❚❚ The FTSE All-Share has a positive return in about twice ❚❚ No 10-year period showed a loss. as many years as a decline. Of the 46 years shown in the chart, 34 had positive returns. ❚❚ Twenty decades, or 54%, had annualised returns between 5% and 15%. ❚❚ Whilst the annual average return was 11.6%, no year matched the average and only 10 years, or 22%, were ❚❚ Decades with low average returns were followed by high between 5% and 15%. average returns. Since 1963, the lowest 10-year-period return (1965-74) was followed by the 10-year period ❚❚ Years with significant losses were frequently followed by with the highest annual average return, which was 32% years with substantial gains. between 1975 and 1984. FTSE ALL-SHARE TOTAL RETURN % CHANGE 1963 - 2008 FTSE ALL-SHARE TOTAL RETURN % CHANGE–1963 - 2008 FTSE ALL-SHARE TOTAL RETURN 1963 2008 2003 1-year Total Return 2004 1999 2003 1998 2004 1997 1999 1-year Total Return 2000 2007 1988 2005 1998 1997 1993 1995 1977 1994 2000 2006 2007 1981 1988 1996 2005 1992 1986 1995 1993 1989 1975 1977 2008 2001 1994 1970 1990 1987 2006 1979 1981 1972 1996 1991 1983 1992 1986 1980 1989 1971 1975 1974 2008 2002 1973 1969 1964 1966 2001 1990 1970 1976 1987 1978 1965 1979 1963 1972 1991 1983 1984 1980 1985 1982 1967 1968 1971 Return 1974 -40% -35% -30% 1973 2002 -15% 1969 1964 1966 -25% -20% -10% -5% 0% 1976 1978 5% 10% 1965 1963 15% 20% 1985 1982 1984 1967 25% 30% 35% 40% 1968 + 40% Band Return -40% -40% -35% -35% -30% -25% -20% -15% -10% -10% -5% -30% -25% -20% -15% -5% 0% 0% 5% 5% 10% 10% 15% 15% 20% 20% 25% 25% 30% 30% 35% 35% 40% 40% + Band -40% -35% -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 92-01 10-year Annualised Total Return 90-99 92-01 98-07 87-96 91-00 90-99 10-year Annualised Total Return 97-06 98-07 85-94 89-98 87-96 91-00 96-05 97-06 73-82 88-97 85-94 89-98 95-04 96-05 72-81 86-95 73-82 88-97 94-03 95-04 71-80 84-93 72-81 86-95 80-89 93-02 94-03 70-79 83-92 71-80 84-93 79-88 80-89 69-78 93-02 68-77 82-91 70-79 83-92 78-87 79-88 99-08 69-78 66-75 67-76 81-90 68-77 82-91 77-86 78-87 65-74 64-73 99-08 66-75 63-72 74-83 67-76 81-90 76-85 77-86 75-84 Return -40% -35% -30% -25% -20% -15% -10% -5% 0% 65-74 64-73 63-72 74-83 5% 10% 15% 20% 76-85 30% 75-84 40% 40% + 25% 35% Band Return -40% -35% -30% -25% -20% -15% -10% -10% 0% -40% -35% -30% -25% -20% -15% -5% 5% 0% 5% 10% 15% 5% 10% 15% 20% 20% 25% 30% 35% 25% 30% 35% 40% 40% + Band -40% -35% -30% -25% -20% -15% -10% 5% 0% 5% 10% 15% 20% 25% 30% 35% Source: Bloomberg, Edward Jones. The FTSE All-Share is an unmanaged index and cannot be invested in directly. Past performance is not a guarantee of future results. Over a 10-year period, investors achieved positive returns Schedule an appointment for a portfolio review with your but they did not earn an average return year after year. Edward Jones financial adviser today. This can help you They earned actual returns for each year, which varied. To determine whether the investments you currently own receive the potential benefit of the positive long-term make sense to achieve your long-term goals. A properly average, you need to stay invested for the entire duration, constructed, well-diversified mix of investments can help during both up and down years. you stay invested in equities over time. Edward Jones Limited is authorised and regulated by the Financial Services Authority and is a member of the London Stock Exchange. Registered in England and Wales No. 3403976. 11 Westferry Circus, Canary Wharf, London, E14 4HH. © 2009. Kate Warne, ph.D., CFa Market Strategist www.edwardjones.com

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