Principia Presentations & Education The 2008 Principia Presentations & Education library encompasses a collection of communication resources developed to assist advisors during client interactions. Specialized Microsoft PowerPoint presentations, formerly known as Ibbotson s Asset Allocation Library, introduce time-tested investment principles. Investor brochures, available as PDF files, address common retirement risks, while Web-based professional training explores the practical application of asset allocation methodologies. Advisors can also search and download white papers on a broad range of research relevant to the creation of the presentations and brochures. Key Features Presentation length ranges from nine to 20 slides each (totaling more than 250 slides), ready for personalization with the speaker s name or a company logo Pre-written speakers notes save time and help clarify complex topics during presentations Brochures range from two to nine pages each and address a variety of retirement risks for investors Brochures are available as PDF files so that they can be printed and distributed or sent in electronic format All presentations and brochures are reviewed by FINRA for use with the public The Advanced Asset Allocation Short Course prepares advisors to explain the value of asset allocation to investors Advisors can complete the course at their own pace in about four hours and demonstrate their comprehension through the final exam Look for the symbol throughout this document to designate what content is new for 2008 Professional Presentations Pg# Client Handouts Pg# Education Pg# Downturns and Recoveries 2 Longevity Risk 45 Advanced Asset Allocation- Web Training 46 Exchange-Traded Funds 3 Solvency Risk 45 White Papers from Morningstar and Ibbotson 46 Global Investing 5 Savings Risk 45 Methodology Papers 46 Growth and Value Investing 8 Inflation Risk 45 Investing for Retirement 10 Market Volatility Risk 45 Investing in Commodities 12 Retiree Spending Risk 45 Investing in Emerging Markets 15 Withdrawal Risk 45 Long-Term Investment Performance 18 Income Risk and the Use of Immediate Annuities 45 Mutual Fund Investing 20 Living Benefits 45 Portfolio Diversification 22 Risks in Retirement 45 Portfolio Performance 24 Principles of Investing 26 Real Estate Investing (updated July 2008) 28 Retirement Income 30 Risk and Volatility 33 Role of Immediate Annuities in Retirement 35 Sector Investing 37 Stocks and Bonds 39 Taxes and Investment Performance 41 Understanding Deferred Annuities 43 Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 1
Downturns and Recoveries Evaluate the characteristics of different asset classes during economic and market downturns and recoveries. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 2
Exchange-Traded Funds Examine the recent growth and performance of Exchange-Traded Funds. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 3
Exchange-Traded Funds (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 4
Global Investing Communicate the benefits and risks of investing globally. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 5
Global Investing (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 6
Global Investing (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 7
Growth and Value Investing Convey the importance of investing in both growth and value stocks by evaluating performance patterns among small-, mid-, and large-cap categories. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 8
Growth and Value Investing (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 9
Investing for Retirement Explain the benefits of tax-deferred retirement investments and the advantages of beginning early. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 10
Investing for Retirement (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 11
Investing in Commodities (new for 2008) Explore the benefits of investing in commodities and how such investments can be used to diversify portfolios and manage economic risks. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 12
Investing in Commodities (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 13
Investing in Commodities (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 14
Investing in Emerging Markets (new for 2008) Convey the attributes of emerging markets and the various benefits that these markets offer in comparison to developed markets. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 15
Investing in Emerging Markets (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 16
Investing in Emerging Markets (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 17
Long-Term Investment Performance Convey the value of staying in the market for the long term. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 18
Long-Term Investment Performance (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 19
Mutual Fund Investing Illustrate the growth and performance of mutual funds while explaining differences in risk, share class, and style. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 20
Mutual Fund Investing (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 21
Portfolio Diversification Explain why asset allocation is important and how diversification helps manage volatility. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 22
Portfolio Diversification (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 23
Portfolio Performance Explore the performance of various portfolio allocations over time. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 24
Portfolio Performance (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 25
Principles of Investing Graphically illustrate the basic concepts behind successful investing, such as compounding, reinvestment, rebalancing, and dangers of market timing. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 26
Principles of Investing (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 27
Real Estate Investing Explore the benefits of investing in commercial property by comparing US REITs, direct investment in domestic property and foreign real estate securities. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 28
Real Estate Investing (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 29
Retirement Income (Winner of the InvestmentNews award for Retirement Income Retail Communications) Examine the challenges of investment planning in retirement, including longevity risk, savings risk, market risk, and withdrawal risk, using a combination of simple illustrations and Monte-Carlo simulations. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 30
Retirement Income (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 31
Retirement Income (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 32
Risk and Volatility Convey the risk and volatility characteristics of different asset classes. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 33
Risk and Volatility (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 34
Role of Immediate Annuities in Retirement Convey how fixed and variable immediate payout annuities can provide an income floor in retirement using a combination of simple illustrations and Monte-Carlo simulations. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 35
Role of Immediate Annuities in Retirement (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 36
Sector Investing A detailed look into the historical performance characteristics of sectors and their impact on asset allocation. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 37
Sector Investing (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 38
Stocks and Bonds Examine the risks and rewards of including stocks and bonds in a portfolio. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 39
Stocks and Bonds (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 40
Taxes and Investment Performance Show the effects of taxes on investment performance and the benefit of tax deferred investments. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 41
Taxes and Investment Performance (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 42
Understanding Deferred Annuities Compare the characteristics of fixed and variable deferred payout annuities, including illustrations on the basic mechanics behind popular living benefit options. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 43
Understanding Deferred Annuities (cont d) Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 44
Client Handouts These PDF Brochures range from three to six pages each and address a variety of retirement risks for investors. All handouts can be printed and distributed to clients, or sent in electronic format. Longevity Risk (2 pages) When planning for retirement, perhaps the first and most important decision you should make is how many years you are going to spend in retirement. This investor brochure discusses the risk of living longer than your portfolio. Solvency Risk (4 pages) Many investors nearing retirement plan for Social Security, Medicare, and defined-benefit pension plans to meet the majority of their retirement needs. This brochure shows investors why they need to rely more on their own savings to meet retirement needs. Savings Risk (3 pages) Most Americans are not saving enough for their retirement. This investor brochure describes the saving situation in the U.S. and illustrates the importance of saving early. Inflation Risk (2 pages) This brochure shows investors how rising prices erode purchasing power over time, and further discusses which asset classes can outpace inflation. Living Benefits (5 pages) Many variable annuity contracts1now offer a number of optional features you can select for an additional annual fee. Market Volatility Risk (3 pages) Managing downside risk can be as important as achieving growth potential. This investor brochure contrasts the volatility of stocks and bonds, and shows why a diversified portfolio can help weather down markets. Retiree Spending Risk (4 pages) This brochure highlights how significant income needs can be in retirement due to income replacement, medical expenses, and long-term care needs. Withdrawal Risk (4 pages) Many investors are concerned about the risk of drawing down assets too aggressively to meet their spending needs. This brochure shows what withdrawal rates have been sustainable in the past, and discusses the impact of taking withdrawals in different market conditions. Income Risk and the Use of Immediate Annuities (6 pages) Many people are appropriately concerned about outliving their assets. This brochure shows investors how they can use asset allocation and guaranteed income products to manage income risk. Risks In Retirement (9 pages) How well your portfolio provides for your retirement not only depends on how well you save before retirement, but how you manage funds during retirement. Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 45
Education Morningstar s robust set of educational resources include asset allocation training and reference materials. 1. Advanced Asset Allocation-Short Course, Web Training This self-paced online training course developed by Ibbotson Associates equips financial professionals who understand asset allocation methodology with knowledge they can use to build optimized portfolios. Note: this course is conceptual in nature and does not receive annual updates. 2. A full complement of relevant white papers and methodology documents are included from the research staff at Ibbotson and Morningstar. Screen shots from Advanced Asset Allocation-Short Course Note: Thumbnails included herein reflect sample data. Purchased content will reflect most recent year-end. Page 46