Reshaping The Investor Experience

Transcription

1 Reshaping The Investor Experience 1

2 Secular Market Movement History shows that the market typically moves in cycles. In the past 117 years through 2013, there have been four bull markets and four bear markets. Investment strategies that work in bull markets may not be effective in flat or bear markets. Secular bull markets are often characterized by a general increase in stock prices, relatively short lived declines, lower levels of volatility and a generally favorable investment environment. Guggenheim Investments is not affiliated with RiskPro and does not endorse, sponsor or promote RiskPro. Secular bear markets are often characterized by a general challenging environment, and may include: significant market moves (both up and down), and flat to negative returns over extended periods of time. 2

3 The Impact of Volatility on Investor Returns 3

4 The Impact of Volatility on Investor Behavior In investing, what is comfortable is rarely profitable. -Robert Anott, Chairman, Founder of Research Affiliates Morningstar Direct and Research Affiliates are not affiliated with RiskPro and do not endorse, sponsor or promote RiskPro 4

5 S&P 500 Index Year-by-Year Total Returns from Determining how much downside we can tolerate Helps us determine a fair share of the upside. More than 20% -20% to -12% -12% to -8% -8% TO 0 0 to 8% 8% to 12% 12% to 20% More than 20% Source: Ibbotson Associates and Standard & Poor s. Ibbotson data beginning 12/31/26 through 12/31/70. Standard and Poor s data beginning 1/1/71 through 12/31/12. The S&P 500 Index is comprised of 500 widely held common stocks varying in composition and is not available for direct investment. Past performance does not guarantee future results.performance is calculated assuming reinvestment of all dividends and capital gains on a daily basis. Ibbotson Associates and S&P Dow Jones Indices LLC are not affiliated with DiskPro and do not endorse, sponsor or promote DiskPro

6 Disclosures: ProTools, LLC ProTools is the developer of RiskPro. ProTools is not an investment adviser and does not provide investment advice. Pacific Financial Group, LLC (PFG) is an affiliate of ProTools and is an investment adviser registered with the Securities and Exchange Commission. PFG serves as the exclusive distributor of RiskPro. *30-year Annualized Returns by Asset Class Ending 12/31/16: Average investor performance results are based on a DALBAR study, Quantitative Analysis of Investor Behavior (QAIB), DALBAR is an independent, Boston-based financial research firm. Using monthly fund data supplied by the Investment Company Institute, QAIB calculates investor returns as the change in assets after excluding sales, redemptions and exchanges. This method of calculation captures realived and unrealived capital gains, dividends, interest, trading costs, sales charges, fees, expenses and any other costs. After calculating investor returns in dollar terms, two percentages are calculated for the period examined: Total investor return rateand annualived investor return rate. Total return rate is determined by calculating the investor return dollars as a percentage of the net of the sales, redemptions, and exchanges for the period. The Dow Jones Industrial Average (DJIA) is a price weighted index based on the average price of 50 of blue chip stocks that are generally industry leaders. The FTSE NAREIT Equity REIT Index is an unmanaged index considered representative of U.S. Real Estate Investment Trusts (REIT). yold is generally considered a hedge or harbor against economic, political, or social crises (including investment market declines, burgeoning national debt, currency failure, inflation, war and social unrest). The gold market is subject to speculation as are other markets, especially through the use of futures contracts and derivatives. The Standard & Poor s 500 Index ( S&P 500 ) is an unmanaged stock market index based on the market capitalivations of the 500 large companies that trade on the New York Stock Exchange ( NYSE ). West Texas Intermediate Index ( WTI Index ) is a grade of crude oil that is used as a primary benchmark in oil pricing. WTI futures and options are the mostly actively traded energy product and plays an important role in managing risk in the energy sector due to liquidity and pricing transparency. The Barclays Capital U.S. Aggregate Index is a broad index representing the U.S. bond market. The Consumer Price Indexes (CPI) program produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. Indexes are unmanaged and do not take transaction costs or lees into consideration. It is not possible to invest directly in an index. There are risks inherent in investing, including the potential loss of principal. Past performance is not a guarantee of future results. Diversification does not guarantee against loss of principal. This document is for informational purposes only. The information and data presented herein has been prepared on the basis of publicly available information, internally developed data or other third party sources. The information contained herein is not and shall not constitute an offer to sell or a solicitation of an offer to buy any of the products referred to herein. Information contained in this document includes information that is subject to change. Disclaimer: This material contains confidential and proprietary information of ProTools, LLC and Pacific Financial Group, LLC (Pacific), and is intended for the exclusive use of the person to whom it is provided. It may not be modified, sold or otherwise provided, in whole or in part, to any other person or entity without prior written permission from ProTools, LLC and/or Pacific. The information contained herein has been obtained from sources believed to be reliable. Neither ProTools, LLC nor Pacific provides any representation or warranty as to the accuracy of such information, and accepts no responsibility or liability (including for indirect, consequential or incidental damages) for any error, omission or inaccuracy in such information and for results obtained from its use. Information and opinions are as of the date indicated, and are subject to change. RESHAPING THE INVESTOR EXPERIENCE 6