Morningstar Advisor Catalog 2008 - 5

1 866 391-4730 http://global.morningstar.com/SBBIKit View sample chart. Purchase online. Ibbotson SBBI Stocks, Bonds, Bills, and Inflation 1926–2007 ® ® Ibbotson SBBI Stocks, Bonds, Bills, and Inflation 1926–2007 10,000 10,000 $15,091 $15,091 $3,246 1,000 $3,246 Compound Annual Return Small Stocks Large Stocks Long-Term Govt Bonds Treasury Bills Inflation 12.5% 10.4 5.5 3.7 3.0 1,000 Compound Annual Return Small Stocks Large Stocks Long-Term Government Bonds Treasury Bills Inflation 12.5% 10.4 5.5 3.7 3.0 100 $79 $20 $12 10 100 $79 $1 Start of low inflationary period Fed targets monetary supply May Day, the deregulation of brokerage fees Tet offensive in Vietnam Glass-Steagall Act Securities Exchange Act Gramm-Leach-Bliley Act Crude oil hits high of $98.18 General Agreement on Tariffs and Trade U.S. Treasury-Federal Reserve Accord Stock market crash Stock market crash JFK assassinated Sputnik launched Arab oil embargo Start of Gulf War 0.10 1926 Pearl Harbor $20 $12 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 September 11th 2005 10 Hypothetical value of $1 invested at the beginning of 1926. Assumes reinvestment of income and no transaction costs or taxes. This data is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. $1 Start of low inflationary period Fed targets monetary supply Securities Exchange Act General Agreement on Tariffs and Trade U.S. Treasury-Federal Reserve Accord Stock market crash Stock market crash Glass-Steagall Act Sputnik launched 0.10 1926 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 September 11th 2005 Hypothetical value of $1 invested at the beginning of 1926. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. Government bonds and Treasury bills are guaranteed by the full faith and credit of the U.S. government as to the timely payment of principal and interest, while stocks are not guaranteed and have been more volatile than the other asset classes. Furthermore, small stocks are more volatile than large stocks and are subject to significant price fluctuations, business risks, and are thinly traded. Source: Small Stocks—represented by the fifth capitalization quintile of stocks on the NYSE for 1926–1981 and the performance of the Dimensional Fund Advisors, Inc. U.S. Micro Cap Portfolio thereafter; Large Stocks—Standard & Poor’s 500 , which is an unmanaged group of securities and considered to be representative of the stock market in general; Government Bonds—20-year U.S. Government Bond; Treasury Bills—30-day U.S. Treasury Bill; Inflation—Consumer Price Index. Underlying data is from the Ibbotson SBBI Yearbook, by Roger G. Ibbotson and Rex Sinquefield, updated annually. ©2008 Morningstar, Inc. All rights reserved. 1 866 391-4730 http://global.morningstar.com/MarketCharts View sample images. Purchase online. Stocks and Bonds: Risk Versus Return 1970–2007 13% Return Maximum Risk Portfolio 100% Stocks Asset Class Winners and Losers Annual asset class returns from highest to lowest 1988 Highest Returns 28.6% 1989 31.5% 1990 7.8% 1991 44.6% 1992 23.3% 1993 32.9% 1994 8.1% 1995 37.4% 1996 23.1% 1997 33.4% 1998 28.6% 1999 29.8% 2000 21.5% 2001 22.8% 2002 17.8% 2003 60.7% 2004 20.7% 2005 14.0% 2006 26.9% 2007 11.6% 12 Crude oil hits high of $98.18 Tet offensive in Vietnam May Day, the deregulation of brokerage fees Gramm-Leach-Bliley Act JFK assassinated Arab oil embargo Start of Gulf War Pearl Harbor 80% Stocks, 20% Bonds 60% Stocks, 40% Bonds 11 50% Stocks, 50% Bonds 22.9% 18.1% 6.2% 30.5% 8.1% 21.0% 3.9% 34.5% 17.6% 22.8% 20.3% 27.3% 5.9% 3.8% 1.6% 39.2% 18.4% 7.8% 16.2% 9.9% Minimum Risk Portfolio 25% Stocks, 75% Bonds 10 16.8% 10.8% –3.2% 19.3% 7.7% 18.2% 3.1% 31.7% 6.4% 15.9% 13.1% 21.0% –3.6% 3.7% –13.3% 28.7% 10.9% 5.7% 15.8% 5.5% 100% Bonds 9 10% Risk 11 12 13 14 15 16 17 9.7% 10.2% –21.6% 12.5% 3.5% 10.0% 1.3% 11.6% 5.2% 5.3% 4.9% 4.7% –9.1% –11.9% –15.7% 1.4% 8.5% 4.9% 4.8% 4.7% This data is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. Lowest Returns 6.3% 8.4% –23.2% 5.6% –11.9% 2.9% –7.8% 5.6% –0.9% 2.1% –7.3% –9.0% –14.0% –21.2% –22.1% 1.0% 1.2% 3.0% 1.2% –5.2% Stocks and Bonds: Risk versus Return Probability of Meeting Income Needs Various withdrawal rates and portfolio allocations over a 25-year retirement Small Stocks Large Stocks Long-Term Government Bonds Treasury Bills International Stocks This data is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 85% Chance of meeting needs 97% 97% 94% 92% 4% Withdrawal Rate 33% 73% 83% 83% 81% 5% Asset Class Winners and Losers 4% 30% 57% 66% 68% 6% 0% 6% 31% 47% 54% 7% 0% 0% 13% 31% 41% 8% 100% Bonds 75%B | 25%S 50%B | 50%S 25%B | 75%S 100% Stocks Results may vary over time and each time the simulation is run. IMPORTANT: The projections or other information generated by Morningstar regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. No transaction costs or taxes are assumed. This data is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. Probability of Meeting Income Needs 5
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Morningstar Advisor Catalog 2008

Table of Contents for the Digital Edition of Morningstar Advisor Catalog 2008
