Some U.S. Investors aren't Buying Stocks1
When putting together an asset allocation to meet long-term goals, a significant number of investors surveyed 1 believe they can leave out stocks.
Volatility has always been a part of equity investing. The S&P 500 Index has produced positive annual returns approximately 70% of the time and negative returns roughly 30% of the time. However, the results are even better over a longer timeframe, with positive returns occurring 95% of the time when measuring ten-year periods.3
Take stock of your plan to meet long-term goals. The best way forward will depend on your goals, time frame, and other details that make you a unique investor. Set up an appointment to discuss any changes to your portfolio with your financial advisor.
1. Source: 2013 Franklin Templeton Global Investor Sentiment Survey: conducted in partnership with ORC International. It includes 501 online responses from participants age 25 and older in the U.S. from January 14, 2013, to January 25, 2013.
2. Performance for the 35-year period ended 12/31/12. Source: © 2013 Morningstar. Stocks are represented by S&P 500 Index; Bonds are represented by Ibbotson Associates SBBI Long Term Corporate Index; Gold is represented by the S&P GSCI Gold Spot Index; and Cash Equivalents are represented by the P&R 90-Day U.S. Treasury Index. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
Cash equivalent instruments are considered to be low risk as they offer the most stability, but they have very little long-term growth potential. Treasuries, if held to maturity, offer a fixed rate of return and fixed principal value; their interest payments and principal are guaranteed. In general, the bond market is volatile and bonds incur interest rate risk. As interest rates rise, bond prices usually fall, and vice versa. Stocks generally have the highest potential returns but tend to be the most volatile. Their prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Gold is a hard asset and may tend to perform well during recessionary and inflationary times. The price of gold may be volatile, fluctuating substantially over short periods of time.
3. Source: © 2013 Morningstar. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed, and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions.
For more information on any of our funds, contact your financial advisor or download a free prospectus. Investors should carefully consider a fund's investment goals, risks, sales charges and expenses before investing. The prospectus contains this and other information. Please read the prospectus carefully before investing or sending money.
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