Download Washington Mutual – largest bank failure in US history

Events Leading up to the Crisis
10/15/07
3/16/08
Citigroup announces $6.5 billion in losses
JP Morgan Chase buys out Bear Stearns
9/15/08
Lehman Brothers bankruptcy
9/21/08
Goldman Sachs & Morgan Stanley convert to traditional
bank holding companies
9/25/08
Washington Mutual – largest bank failure in U.S. history
12/1/08
NBER officially declares a recession
Feb. 2009
Bank of America takeover offer to Merrill Lynch
Unemployment nearly doubled since February 2008
Consumer Confidence Index reaches all-time low
Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis.
A History of Financial Crises—and Recoveries
$12,078
$15,230
Oil Crisis & Recovery
• OPEC raises oil prices and
restricts certain shipments
• As a result, oil prices quadruple
by 1974
$8,060
12/31/71
12/31/6712/31/69
12/31/76
12/31/79
12/31/89
12/31/99
12/31/08
Data Source: Ned Davis Research, 1/09.
Market low for each crisis
The S&P 500 Index is a composite of the 500 largest companies in the United States.
INDEX PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. This illustration is for illustrative purposes only, and does not represent the performance of The Hartford Mutual Funds,
The Hartford variable annuities, or any particular investment. The S&P 500 Index is unmanaged. You cannot invest directly in the S&P 500 Index. Assumes reinvestment of income and no transaction cost.
Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis.
A History of Financial Crises—and Recoveries
$32,208
$20,764
Severe Recession & Recovery
• Worst recession since Depression;
unemployment at 10.8%
$19,453
• Inflation: 13.5% in 1980
• 6-month CD rates: more than 13%
8/31/80
12/31/6712/31/69
3/31/84
12/31/79
12/31/89
12/31/99
12/31/08
Data Source: Ned Davis Research, 1/09.
Market low for each crisis
The S&P 500 Index is a composite of the 500 largest companies in the United States.
INDEX PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. This illustration is for illustrative purposes only, and does not represent the performance of The Hartford Mutual Funds,
The Hartford variable annuities, or any particular investment. The S&P 500 Index is unmanaged. You cannot invest directly in the S&P 500 Index. Assumes reinvestment of income and no transaction cost.
Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis.
A History of Financial Crises—and Recoveries
$87,802
Savings and Loan (S&L)
Crisis & Recovery
$66,340
• Unsound real-estate lending by S&Ls
• Bank failures peak in 1988 and 534
banks close
$51,953
• Resolution Trust Corporation created to
acquire and sell real-estate investments
3/31/87
12/31/6712/31/69
12/31/79
12/31/89
12/31/89
12/31/99
12/31/08
Data Source: Ned Davis Research, 1/09.
Market low for each crisis
The S&P 500 Index is a composite of the 500 largest companies in the United States.
INDEX PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. This illustration is for illustrative purposes only, and does not represent the performance of The Hartford Mutual Funds,
The Hartford variable annuities, or any particular investment. The S&P 500 Index is unmanaged. You cannot invest directly in the S&P 500 Index. Assumes reinvestment of income and no transaction cost.
Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis.
A History of Financial Crises—and Recoveries
Accounting Scandals,
9/11 Attacks & Recovery
$535,260
$430,578
• Enron declares bankruptcy; other
companies cited
• Market down leading to SarbanesOxley reforms
$262,973
• 9/11 – markets close for four days
10/31/99
12/31/6712/31/69
12/31/79
12/31/89
6/30/07
12/31/99
12/31/08
Data Source: Ned Davis Research, 1/09.
Market low for each crisis
The S&P 500 Index is a composite of the 500 largest companies in the United States.
INDEX PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. This illustration is for illustrative purposes only, and does not represent the performance of The Hartford Mutual Funds,
The Hartford variable annuities, or any particular investment. The S&P 500 Index is unmanaged. You cannot invest directly in the S&P 500 Index. Assumes reinvestment of income and no transaction cost.
Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis.
A History of Financial Crises—and Recoveries
$535,260
The Credit Crunch
$332,392
• JP Morgan Chase buys out Bear Stearns
• Washington Mutual – largest bank failure in
U.S. history
• Unemployment almost doubles; Consumer
Confidence Index dropped to new low.*
6/30/07
12/31/6712/31/69
12/31/79
12/31/89
12/31/08
12/31/99
12/31/08
Data Source: Ned Davis Research, 1/09.
Market low for each crisis
*Data source: Bureau of Labor Statistics, 2/09; The Conference Board, 2/09.
The S&P 500 Index is a composite of the 500 largest companies in the United States.
INDEX PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. This illustration is for illustrative purposes only, and does not represent the performance of The Hartford Mutual Funds,
The Hartford variable annuities, or any particular investment. The S&P 500 Index is unmanaged. You cannot invest directly in the S&P 500 Index. Assumes reinvestment of income and no transaction cost.
Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis. Crisis.
Reacting to Crisis:
Short-Term Problem or Long-Term Opportunity?
Opportunistic—Adds $2,000 each time the market drops by 10% or
more in a month. Total investment: $20,000
$487,346
Systematic1—Invests an additional $10,000 over the entire period by
adding $20.45 at the end of each month. Total investment: $20,000
$443,913
Steadfast—Neither adds nor subtracts. Total investment: $10,000
Apprehensive—Moves $2,000 to CDs* each time the market drops by
10% or more in a month. Total investment: $10,000
$332,767
$228,033
Initial
Investment
$10,000
Opportunistic Investor
adds $2,000 to stocks
Apprehensive Investor
moves $2,000 to CDs
1/1/68 11/30/73 9/30/74
**
**
10/31/87
*
*
8/31/98
*
*
*
*
12/31/08
* CDs are FDIC insured up to $250,000 through 12/31/2009, offer a fixed rate of return, and are not subject to market volatility. Equity investments are subject to market volatility and have greater risk than CDs and
other cash investments.
1 Continuous or periodic investment plans neither assure a profit nor protect against loss in declining markets. Systematic investing does provide an easy, disciplined way to build contract /account value. Because
systematic investing involves continuous investing regardless of fluctuating price levels, you should carefully consider your financial ability to continue investing through periods of fluctuating prices.
Data Source: Ned Davis Research, 1/09.
The S&P 500 Index is a composite of the 500 largest companies in the United States.
INDEX PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. This illustration is for illustrative purposes only, and does not represent the performance of The Hartford Mutual Funds, The Hartford
variable annuities, or any particular investment. The S&P 500 Index is unmanaged. You cannot invest directly in the S&P 500 Index. Assumes reinvestment of income and no transaction cost.
How Risky are Stocks in the Long Run?
97%
Percentage of
Rolling Periods
With Positive
Returns for the
S&P 500 Index
88%
69 out of
71 periods
100%
66 out of
66 periods
67 out of
76 periods
12/31/28 – 12/31/08
Data Source: Ned Davis Research, 1/09.
The S&P 500 Index is a composite of the 500 largest companies in the United States.
INDEX PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. This
illustration is for illustrative purposes only, and does not represent the performance of
The Hartford Mutual Funds, The Hartford variable annuities, or any particular
investment. The S&P 500 Index is unmanaged. You cannot invest directly in the S&P
500 Index.
Assumes reinvestment of income and no transaction cost.
5-Year
10-Year
15-Year
The Confidence to Invest in Bear Markets
What You Would
Have Missed
Average Annual Returns
When Investing After a
20% Drop for the
Past 10 Bear Markets
6 months
6.76%
1 year
17.92%
3 year
10.97%
5 year
8.54%
10 year
9.18%
A bear market is defined by a 20% drop in the market.
Data Source: Ned Davis Research, 1/09. The first bear market examined began on 6/15/48 and the last one began on 3/19/02.
The S&P 500 Index is a composite of the 500 largest companies in the United States.
INDEX PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. This illustration is for illustrative purposes only, and does not represent the
performance of The Hartford Mutual Funds, The Hartford variable annuities, or any particular investment. The S&P 500 Index is unmanaged. You cannot invest
directly in the S&P 500 Index.
Assumes reinvestment of income and no transaction cost.
Personal Steps: What We’ve Learned


Work With a Financial Advisor
Understand the Importance
of Having a Financial Strategy

Diversify Your Investment Portfolio

Don’t Succumb to “Media Vision”
Diversification does not assure a profit nor protect against a loss.
The Hartford: Profile of an Industry Leader
Market Profile
• Named by Ethisphere Institute as one of the 2009 World’s Most Ethical Companies
• Winner of multiple DALBAR Service Awards in 2008: Annuity, Mutual Fund, Life Insurance,
Retirement Plans
Investments & Life Insurance
• #2 provider of broker-sold variable annuities, based on assets in U.S.– Morningstar,
December 2008
• #2 in variable universal life insurance sales – Tillinghast, December 2008
• #2 in group life sales – LIMRA, Sept. 2008
• #1 in new fully insured group disability insurance sales – LIMRA, September 2008
Property & Casualty Insurance
• #4 direct writer of personal lines – 2008 Financial Statements
• #2 for “Satisfying New Insurance Buyers with the Purchase Experience”
by J.D. Powers and Associates 2008 Insurance New Buyer Study
A History of Helping America Recover
Fire destroys New
York’s financial district
The Hartford’s president
travels 108 miles through a
blizzard to pay The Hartford's
fire insurance customers.
1835
A massive earthquake
in San Francisco
The Hartford pays
$11.6 million in claims.
1871
The Great Chicago Fire
The Hartford pays all claims,
totaling almost $2 million.
1906
San Francisco earthquake
& Hurricane Hugo
Terrorists attack
the World Trade
Center & Pentagon
The Hartford pays claims
to victims.
The Hartford pays more
than $850 million to
policyholders.
1989
2001
1992
2005
Hurricane Andrew
Hurricanes Katrina & Rita
The Hartford is there for
its policyholders.
The Hartford pays claims
totaling $140 million.
“Confidence will gradually
return to our financial
markets, and the result will
be a stronger financial
system that extends beyond
our nation’s borders.”
The Hartford’s
Chief Investment Strategist, Dr. Quincy Krosby
The views expressed here are those of Dr. Quincy Krosby. Dr. Quincy Krosby's views are
not necessarily those of The Hartford and should not be construed as investment advice.
You should carefully consider the investment objectives, risks, charges and expenses of The Hartford
Mutual Funds and Hartford variable products and their underlying funds before investing. This and
other information can be found in the prospectuses for the Mutual Funds and variable products and the
prospectuses for the underlying funds, which can be obtained from your investment representative or
by calling: 888-843-7824 for Hartford Mutual Funds, 800-862-6668 for Hartford variable annuities, or by
logging on to our Web site (www.hartfordinvestor.com) for Hartford variable life insurance. Please read
the applicable prospectus carefully before you invest or send money.
This information is written in connection with the promotion or marketing of the matter(s) addressed in this material.
The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not
intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your
own tax or legal counsel for advice.
The views expressed here are those of Dr. Quincy Krosby. Dr. Quincy Krosby's views are not necessarily those of The Hartford
and should not be construed as investment advice.
Hartford Mutual Funds are underwritten and distributed by Hartford Investment Financial Services, LLC.
Hartford variable annuities are issued by Hartford Life Insurance Company and Hartford Life & Annuity Insurance Company and
are underwritten and distributed by Hartford Securities Distribution Company, Inc.
Variable annuities are long-term investment vehicles designed for retirement purposes and are subject to market fluctuation,
investment risk, and possible loss of principal.
Taxable distributions (and certain deemed distributions) are subject to ordinary income tax, and if made prior to age 59½, may
also be subject to a 10% federal income tax penalty.
Early surrender charges may also apply. Withdrawals will reduce the death benefit and cash surrender value.
Hartford variable life insurance products are distributed by Hartford Equity Sales Company, Inc. (HESCO), a broker/dealer affiliate
of The Hartford.
“The Hartford” is The Hartford Financial Services Group, Inc. and its subsidiaries, including issuing company Hartford Life
Insurance Company and Hartford Securities Distribution Company, Inc. (“HSD”).
HSD (member FINRA and SIPC), a registered broker/dealer affiliate of The Hartford, has established certain service programs for
retirement plans, including defined contribution retirement plans, through which a plan or plan participant may invest in mutual
funds.
This seminar has been funded in whole or in part by PLANCO Financial Services, LLC, a broker dealer affiliate of The Hartford.
All information and representations herein are as of 5/09.
SEM_CTC 08-6977A ANN 12858 5/09