www.edwardjones.com Member SIPC Foundations of Investing 1
5 HOW CAN I STAY ON TRACK? 4 HOW DO I GET THERE? 1 WHERE AM I TODAY? MY FINANCIAL NEEDS 3 CAN I GET THERE? 2 WHERE WOULD I LIKE TO BE? 2
Develop a Strategy Stick with Quality Invest for the Long Term Diversify Focus On What You Can Control Why Leads to How 3
Rule 1 Develop a Strategy 4
REAL ESTATE SILVER FADS GOLD TECH O INTERNET IL DIGITAL Rule 2 Stick with Quality 5
Rule 3 Diversify 6
DIVERSIFY VARIETY Bonds 7
Why Bull & Bear? 8
BOUGHT SHARE OF STOCK FOR $20 COMPANY SHARES $10 CAPITAL GAIN $20 $30 SOLD SHARE OF STOCK FOR $30 Stocks 9
Dividends Are Important Average Annual Return 9.1% 2.5% Stocks Not Paying Dividends Stocks Paying Dividends Source: Ned Davis Research, 12/31/1971 12/31/16. Uses indicated annual dividends on a rolling 12-month basis. Past performance may not be an indication of future results. The S&P 500 is an unmanaged index and is not meant to depict an actual investment. Does not include transaction costs or taxes. Dividends can be increased, decreased, or eliminated at any point without notice. Further distribution prohibited without prior permission. Copyright 2016 Ned Davis Research, Inc. All rights reserved. Stick with Quality 10
Average Annual Return 20% 15% 10% 18.9% 17.0% Dividend-paying stocks Non-dividend-paying stocks 5% 0% -5% -10% -15% -20% -25% -30% -13.1% -25.5% Bull Markets Bear Markets Source: Ned Davis Research, 12/31/1971 12/31/2016. Uses indicated annual dividends on a rolling 12-month basis. Past performance may not be an indication of future results. The S&P 500 is an unmanaged index and is not available for direct investment. Does not include transaction costs or taxes. Dividends can be increased, decreased, or eliminated at any point without notice. Further distribution prohibited without prior permission. Copyright 2016 Ned Davis Research, Inc. All rights reserved. Quality Makes a Difference 11
GROWTH INVESTORS INCOME INVESTORS INVESTORS GROWTH & INCOME INVESTORS Packaged Investment Products 12
MULTIPLE COMPANIES Diversification Professional Management Benefits of Mutual Funds 13
BONDS = % INTEREST STOCKS = SHARE PRICE OF MUTUAL FUNDS DIVIDENDS $ CAPITAL GAINS $ DISTRIBUTION Mutual Funds Earnings 14
Rule 4 Invest for the Long Term 15
Systematically Investing vs. Lump-sum Investment Share Price $26 $24 $22 $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 Lump Sum $5,000 Average Price: $20/share Total Purchased: 250 Shares Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Share Price Dollar Cost Averaging $417/Month $26 $24 $222 19 19 $20 21 Average Price: $17/share 21 21 $18 24 $16 26 26 28 $14 28 $12 35 32 $10 $8 Number of Shares Purchased $6 $4 $2 Total Purchased: 300 Shares $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Edward Jones. These charts are for illustrative purposes only and are not intended to represent the performance of any security. These illustrations do not include commissions or fees. Past performance does not guarantee future results. Systematic Investing 16
Plan Budget Review Rule 5 Focus On What You Can Control MKD-7727C-A-SL EXP 28 FEB 2019 2017 EDWARD D. JONES & CO, L.P. ALL RIGHTS RESERVED. 17
You can control: Saving and spending habits Having an emergency fund Your level of debt You can t control: Stock market Tax laws Every investment has some risk MKD-7727C-A-SL EXP 28 FEB 2019 2017 EDWARD D. JONES & CO, L.P. ALL RIGHTS RESERVED. 18
Rule 1 Develop a Strategy 2 Stick with Quality 3 Diversify 4 Invest for the Long Term 5 Focus On What You Can Control Summary 19
& Questions Answers 20
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