Seven time-tested strategies for guiding investors through today’s challenges and toward tomorrow’s goals.
Investors should start early by saving more, investing with discipline and having a plan for their future.
People who are 65 today have a very good chance of living to 80 or 90. But studies reveal many of us have not saved enough for the retirement years.
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Average life expectancy at age 65
Probability one person in a couple reaches 85 years old
Invest in America's fastest growing companies with the
and perhaps, saving and investing more
%
89
$134,000
PLAN ON LIVING
A LONG TIME
1
and it doesn’t earn what it used to
$837
1990
$5,000
$8,000
2019
Income earned by $100,000
investment in a 6-month CD
Income Builder Fund
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The average rate on a traditional savings account is still well below the rate of inflation, yet more than $16 trillion in cash still sits on the sidelines.
Investors often think of cash as a safe haven during volatile times, or even as a source of income. However, despite a more hawkish stance by the Federal Reserve, nominal and real yields are still low relative to history. Investors should be sure an allocation to cash does not undermine their long-term investment objectives.
CASH ISN'T ALWAYS KING
2
Dec. 2021
Dec. 2021
$208,215
$114,272
Return with
dividends reinvested
There is no guarantee that companies will declare, continue to pay or increase dividends.
Return,
price only
Equity Income Fund's
The
conservative approach to equities pays dividends
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An initial investment of $10,000 in the S&P 500 over the last 20 year
Compounding can make an exponential difference over time, compared to stock price appreciation alone.
Reinvesting dividend payments allows that money to continue to grow.
and have them working for you
HARNESS THE POWER OF DIVIDENDS AND COMPOUNDING
3
AVOID EMOTIONAL BIASES BY STICKING TO A PLAN
Diversification does not guarantee investment returns and does not eliminate the risk of loss. Diversification among investment options and asset classes may help to reduce overall volatility.
Dalbar's study titled "Quantitative Analysis of Investor
Behavior" credits these numbers in part to badly timed -
and often emotionally driven - investment decisions.
Returns in a 60/40 stock/bond
portfolio
Average investor returns
Over 20 years
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%
7.4
%
3.6
A portfolio that included bonds saw reduced losses during the pandemic-related sell-off, enabling these diversified portfolios to recover much faster than a portfolio of stocks alone.
Investors often lament that a diversified portfolio has failed keep up with the stock market during bull markets. However, as the chart shows, a 60/40 portfolio is your friend during the worst of times. Over the last 20 years, a 60/40 portfolio saw reduced daily losses on the S&P 500’s bottom decile days
and avoid the urge to time the market
Average U.S. investor - Equity
United States
global GDP
The United States accounts for only a small fraction
of global GDP, yet the majority of U.S. investors are
putting their money into U.S.-based assets.
%
75
%
24
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Though the U.S. accounts for only ¼ of global capital markets, Americans concentrate 75% of their equity allocation at home and an even greater 84% of their bond allocation at home.
Another costly and common investing bias: investing in what’s familiar.
Don’t let biases—home-country or otherwise—sway your better judgment.
AVOID EMOTIONAL BIASES BY STICKING TO A PLAN
Global Allocation Fund
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4
%
75
ended in
positive returns
Of the last
42 years
Hedged Equity Fund
Hedge the equity market without timing it with the
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Volatility is unlikely to derail a long-term allocation. Investors therefore need a plan for riding out volatile periods instead of reacting emotionally.
Every year has its rough patches. However, despite the many pull-backs, 75% of those years ended with positive returns.
and plan on riding it out instead of reacting emotionally
Volatility is normal, so don’t let it derail you
6
5
on a well-diversified portfolio,
over the past 15 years.
Annual return
%
Global Allocation Fund
Diversify your bonds with the
6.1
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Through it all, a diversified portfolio of stocks, bonds and other uncorrelated asset classes proved itself a winner.
In the last 15 years, the world has endured a global pandemic, multiple natural disasters, and numerous geopolitical conflicts.
and it is a winning strategy over the long run
DIVERSIFICATION WORKS
STAYING INVESTED MATTERS
$2,441
$42,231
Missed 60 best days
-6.81% RETURN
7.47% RETURN
Fully invested
Seven of the best 10 days occurred within two weeks of the 10 worst days.
Market timing can be a dangerous habit. Sometimes, investors think they can outsmart the market; other times, fear and greed push them to make emotional, rather than logical, decisions.
and it is the most essential principle of all
STAYING INVESTED MATTERS
A blend of stocks and bonds has not suffered a negative return over any five-year rolling period in the past 70 years
70 Years
stocks
%
60
bonds
%
40
While markets can always have a bad day or even year, history suggests investors are less likely to suffer losses over longer periods.
and it is the most essential principle of all
67 Years
7
Get invested, stay invested with the
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STAYING INVESTED MATTERS
Hedged Equity Fund
DIVE DEEPER INTO THE DATA.
EXPLORE THE CHARTS.
Explore full Guide to the Markets
Explore full Guide to the Markets
EXPLORE FULL GUIDE
TO THE MARKETS
DIVE DEEPER INTO
THE DATA.
EXPLORE THE CHARTS.
Global Allocation Fund
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Get invested, stay invested with the
STAYING INVESTED MATTERS
7
67 Years
67 Years
50
%
bonds
50
%
stocks
Good things come to those who wait.
While markets can always have a bad day or even year, history suggests investors are less likely to suffer losses over longer periods.
It’s always darkest just before dawn.
By missing some of the market’s best days, investors can lose out on critical opportunities to grow their portfolio. Market timing can have devastating results.
Six of the U.S. market’s 10 best days occurred within two weeks of its 10 worst days.
Fully invested
7.20% RETURN
$40,135
Missed 60 best days
$2,834
Returns on $10,000 invested in the S&P 500:
January 1, 1998-December 29, 2017
STAYING INVESTED MATTERS
Diversify your bonds with the
Global Bond Opportunities Fund
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DIVERSIFICATION WORKS
6
Time and again, diversification serves its purpose.
In the last 15 years, the world endured multiple natural disasters and geopolitical conflicts and two major market downturns.
Through it all, a diversified portfolio of stocks, bonds and other uncorrelated asset classes proved itself a winner.
%
8
Annual return
on a well-diversified portfolio, over the past 15 years.
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Hedge the equity market without timing it with the
Hedged Equity Fund
5
VOLATILITY IS NORMAL; DON’T LET IT DERAIL YOU
Seeing through the noise.
Plan on riding out volatile market periods. Pullbacks hapeen.
Markets suffered double-digit declines in 21 of the last 38 years, yet still ended those years with positive returns 75% of the time.
Of the last
38 years
ended in
positive returns
75
%
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4
Seek a smoother ride in international equity markets with the
JPIN ETF
AVOID EMOTIONAL BIASES BY STICKING TO A PLAN
Don’t let biases—home-country or otherwise—sway your better judgment.
Another costly and common investing bias: investing in what’s familiar.
Though the U.S. accounts for only 1/3 of global capital markets, Americans concentrate 75% of their investments at home.
WATCH VIDEO
LEARN MORE
35
%
75
%
The United States accounts for only a small fraction
of global GDP, yet the majority of U.S. investors are
putting their money into U.S.-based assets.
United States global GDP
Where U.S.
investors are investing
In good times and bad, stay on course.
Investors pay a heavy cost when their feelings dictate (often poorly timed) decisions. Following a plan can cut losses when markets are down and quicken recovery when markets turn around.
A portfolio that included bonds saw reduced losses during the financial crisis, enabling these diversified portfolios to recover much faster than a portfolio of stocks alone.
2.3
%
6.9
%
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Over 20 years
Average investor returns
Returns in a 60/40 stock/bond portfolio
Dalbar's study titled "Quantitative Analysis of Investor
Behavior" credits these numbers in part to badly timed - and often emotionally driven - investment decisions.
Diversification does not guarantee investment returns and does not eliminate the risk of loss. Diversification among investment options and asset classes may help to reduce overall volatility.
WATCH VIDEO
LEARN MORE
3
HARNESS THE POWER OF DIVIDENDS AND COMPOUNDING
Investing in risk assets—and reinvesting dividends—can be powerful moves.
Reinvesting dividends lets earnings continue to earn.
Compounding can make an exponential difference over time, compared to stock price appreciation alone.
An initial investment of $10,000 in 1970 in the S&P 500.
conservative approach to
The
equities pays dividends
Equity Income Fund's
Return,
price only
There is no guarantee that companies will declare, continue to pay or increase dividends.
Return with
dividends reinvested
$298,294
$1,247,297
Dec. 2017
Dec. 2017
2
CASH ISN'T ALWAYS KING
Cash (and equivalents, like CDs) don’t offer the “safe haven” they once did.
Ultra-low interest rates mean savings currently in cash are losing value by not keeping up with inflation, yet more than $15 trillion in cash still sits on the sidelines.
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Scour the world, find more yield with the
Income Builder Fund
Income earned by $100,000 investment
in a 6-month CD
2016
$8,000
$5,000
1990
$338
Even when, like now, a lot of people are relying on it.
Income generated
Income needed to beat inflation
1
PLAN ON LIVING
A LONG TIME
$120,000
64
%
And saving more for it.
Build a strong core with the
People who think they need more than 500k for retirement
Median value of retirement account
for ages 55-64
Global Allocation Fund
People who are 65 today have a very good chance of living to 80 or 90. But studies reveal many of us have not saved enough for the retirement years.
Investors should start early by saving more, investing with discipline and having a plan for their future.
WATCH VIDEO
LEARN MORE
Seven time-tested strategies for guiding investors and their portfolios through challenging markets and toward tomorrow’s goals.
$2,200
-6.11% RETURN
A blend of stocks and bonds has not suffered a negative return over any five-year rolling period in the past 67 years
When investors feel gloomy and worried about the outlook, their natural tendency is to sell risk assets in general and stocks in particular. However, history suggests that trying to time markets in this way is a mistake. Over the last 50 years, there have been eight distinct peaks and troughs in the University of Michigan Consumer Sentiment Index. On average, buying at a confidence peak yielded a return of 4.4% while buying at a trough returned 24.5%.
From the 1980s to 2000's, the income generated from a CD outpaced inflation.
1980s
1990s
2000s
$9,970
$5,500
$5,420
$3,010
$3,310
$2,570
Since the 2010s, the income from a CD has not been enough to beat inflation.
2010s
2020s
so far
$470
$1,770
$300
$6,000
THEN
NOW
Income earned on a $100,000 investment in a 6-month CD
Income needed to beat inflation
THEN
NOW
84
%
Average U.S. investor - Bonds
Where U.S.
investors are investing
Six of the U.S. market’s 10 best days occurred within two weeks of its 10 worst days.
Consumer Sentiment Index and
subsequent 12-month S&P 500 returns
From the 1980s to 2000's, the income generated from a CD outpaced inflation.
1980s
Consumer Sentiment Index and
subsequent 12-month S&P 500 returns
Avg. subsequent 12-mo. S&P 500 returns
8 sentiment peaks
+4.1%
8 sentiment troughs
+24.9%
Consumer Sentiment Index and
subsequent 12-month S&P 500 returns
Avg. subsequent 12-mo. S&P 500 returns
8 sentiment peaks
+4.1%
8 sentiment troughs
+24.9%
Average life expectancy at age 65
YEAR
WOMEN
MEN
DIFFERENCE
1990
84.0
80.0
4.0
2020
84.5
82.0
2.5
2090
89.3
87.2
2.1
Average life expectancy at age 65
YEAR
WOMEN
MEN
DIFFERENCE
1990
84.0
80.0
4.0
2020
84.5
82.0
2.5
2090
89.3
87.2
2.1