How investment categories have performed over time

Investments offer varying levels of risk and return. Generally speaking, the more risk associated with an investment, the greater its potential return over time. So, you'll need to understand the inherent risks and rewards of each investment type and the strategies that can help you build a fully diversified portfolio within your policy that generates the highest potential return for the amount of risk you're willing to assume.

The graph below demonstrates how risk is tied to performance. Keep in mind, however, that historical performance is never a guarantee of future results.

Source: Ibbotson Associates – International Stocks are represented by Stanley Capital International – Europe, Australia, and Far East (Free) Index. Domestic Stocks are represented by the S&P 500. Diversified portfolio is 50% domestic stocks, 30% domestic bonds, 10% international stocks and 10% U.S. Treasury Bills. Domestic Bonds are represented by U.S. Long term Corporate Bonds. Money Markets are represented by U.S. Treasury Bills. Past performance is no guarantee of future results. The chart is for illustrative purposes only and is not representative of any particular investments.

Risk and reward potential determined by standard deviation of the portfolio. Portfolios have varying degrees of risk. Investments in micro-cap and small company stocks generally carry a higher level of volatility and risk over the short term.

The information provided in the Investment Basics portion of this web site is presented for general educational purposes only and should not be construed as investment advice. Before investing and periodically thereafter, you should read the prospectus and consider additional research to ensure that your investments satisfy your goals and objectives.

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