Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Corporate venture capital wikipedia , lookup
Environmental, social and corporate governance wikipedia , lookup
Rate of return wikipedia , lookup
Early history of private equity wikipedia , lookup
Hedge (finance) wikipedia , lookup
Socially responsible investing wikipedia , lookup
Short (finance) wikipedia , lookup
Stock trader wikipedia , lookup
Investment fund wikipedia , lookup
Cole E. Backstrom, CFP® Financial Advisor Cetera Advisor Networks Located at Novation Credit Union 500 Imperial Avenue Oakdale, MN 55128 651.735.9934 or 651.739.8080 | Fax: 651.739.0648 Securities and advisory services offered through Cetera Advisor Networks LLC, Member FINRA/SIPC. Cetera Advisor Networks and Novation Credit Union are not affiliated companies. NOT NCUA INSURED NO CREDIT UNION GUARANTEE MAY LOSE VALUE NOT INSURED BY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT About the Speaker Cole E. Backstrom, CFP® Financial Advisor with Novation’s in-house Investment Center Team from Cetera Advisor Networks Not FDIC Insured • May Lose Value • No Bank Guarantee Title (Arial 28pt. Bold) Presenter Name (Arial 14pt. Bold) Title (Arial 14pt.) Subtitle (Arial 24pt.) Presenter Name Title Month XX, 201X (Arial 12pt.) There Have Always Been Reasons Not to Invest World Events European Crisis Black Monday Fall of Dow Jones Industrial Average Black Tuesday Crash of New York Stock Exchange 10/19/87 Korean Conflict 1950–53 10/29/29 Vietnam War (U.S. Engagement) 1964–73 10/24/29 1962 Cuban Missile Crisis Subprime Lending Crisis 2007 10/27/97 Iran Hostage Crisis World War II 9/11/01 2009– 2011 1991 1979–81 1939–45 Black Thursday Plunge of New York Stock Exchange Operation Desert Storm Attacks on the World Trade Center and Pentagon 1988 2008 Bloody Monday Fall of Dow Jones Industrial Average Savings & Loan Crisis Global Credit Meltdown 2003–2010 Operation Iraqi Freedom 4 Step Back and Take a Long-Term View Growth of $10,000 European Crisis December 31, 1928–December 31, 2014 Bloody Monday Fall of DJIA $100,000,000 $10,000,000 $1,000,000 Black Thursday Plunge of New York Stock Exchange Cuban Missile Crisis Black Tuesday Crash of New York Stock Exchange World War II $10,000 Korean Conflict 1928 1941 1953 Vietnam War U.S. Engagement 1966 S&P 500 Index $24,124,067 Iran Hostage Crisis Black Monday Fall of DJIA $100,000 $1,000 Operation Desert Storm Submarine Lending Crisis Attacks on World Trade Center and Pentagon 1978 1991 Global Credit Meltdown Operation Iraqi Freedom 2003 2014 This chart is for illustrative purposes only and does not reflect the performance of any Franklin Templeton fund. Source: © 2015 Morningstar. Indexes are unmanaged, and one cannot invest directly in an index. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance does not guarantee future results. 5 6 “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” — Sir John Templeton Templeton Funds Founder and Former Chairman 7 5 Reasons to Be an Equity Investor in the Decade Ahead 5 Reasons to Be an Equity Investor in the Decade Ahead 1. History Favors a Return to the Mean 2. The World Is Getting Smaller (and More Prosperous) 3. Innovation Will Surprise Us...Again 4. Quality Companies Are Not Short-Sighted 5. Equities Help Protect Purchasing Power 9 History Favors a Return to the Mean History Favors a Return to the Mean Most Years Have Been Positive Calendar Year Returns for the S&P 500 Index, 1926–2014 Total Return Ranges 50% to 60% 1933 1954 40% to 50% 1928 1935 1958 30% to 40% 1927 1936 1938 1945 1950 1955 1975 1980 1985 1989 1991 1995 1997 2013 20% to 30% 1942 1943 1951 1961 1963 1967 1976 1982 1983 1996 1998 1999 2003 2009 10% to 20% 1926 1944 1949 1952 1959 1964 1965 1968 1971 1972 1979 1986 1988 1993 2004 2006 2010 2012 2014 0% to 10% 1947 1948 1956 1960 1970 1978 1984 1987 1992 1994 2005 2007 2011 -10% to 0% 1929 1932 1934 1939 1940 1946 1953 1962 1969 1977 1981 1990 2000 -20% to -10% 1941 1957 1966 1973 2001 -30% to -20% 1930 1974 2002 -40% to -30% 1937 2008 73% POSITIVE YEARS 65 27% NEGATIVE YEARS 24 -50% to -40% 1931 This chart is for illustrative purposes only and does not reflect the performance of any Franklin Templeton fund. Source: © 2015 Morningstar. Indexes are unmanaged, and one cannot invest directly in an index. Past performance does not guarantee future results. 11 History Favors a Return to the Mean The Same Goes for Decades 10-Year Rolling Returns for the S&P 500 Index Total Return Ranges 1935 2010 2011 2012 2013 2014 1936 1937 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1938 1939 2008 2009 This chart is for illustrative purposes only and does not reflect the performance of any Franklin Templeton fund. 95% POSITIVE 10-YEAR RETURNS 76 5% NEGATIVE 10-YEAR RETURNS 4 Source: © 2015 Morningstar. Indexes are unmanaged, and one cannot invest directly in an index. Past performance does not guarantee future results. 12 History Favors a Return to the Mean The Six Worst 10-Year Rolling Periods What Happened Next? S&P 500 Index—Worst 10-Year Returns and Subsequent 10-Year Returns This chart is for illustrative purposes only and does not reflect the performance of any Franklin Templeton fund. Source: © 2014 Morningstar. Indexes are unmanaged and one cannot invest directly in an index. For the 10-year periods ended 2010, 2011, 2012, 2013 and 2014, the S&P 500 Index returned 1.41%, 2.92%, 7.10% , 7.42% and 7.67% respectively. Past performance does not guarantee future results. 13 The World Is Getting Smaller (and More Prosperous) The World Is Getting Smaller and More Prosperous This Helps U.S. Companies Too Percentage of Revenues Generated Overseas 56% 85% 64% 64% 55% 60% 58% 99% Sources: Data is as of company’s latest financial statements: December 31, 2013 (3M Co., AVON Products, Inc., Chevron Corp. and The Coca Cola Company), April 30, 2013 (H.J. Heinz Company), May 31, 2014 (Nike, Inc.), September 30, 2014 (Apple Inc. and Qualcomm Inc.). Foreign Revenue is based on Total Revenue – Domestic Revenue. Logos are trademarks of their respective owners and are used for illustrative purposes and should not be construed as an endorsement or sponsorship of Franklin Templeton Investments. 15 The World Is Getting Smaller and More Prosperous Is Global Core to Your Everyday Life? U.S. Foreign Godiva Chocolatier Hershey Nestle CITGO Shell Oil Valero Budweiser Miller Beer Yuengling Bridgestone Tires Dunlop Michelin Callaway Cleveland TaylorMade 16 The World Is Getting Smaller and More Prosperous Is Global Core to Your Everyday Life? U.S. Foreign Godiva Chocolatier Turkey Hershey United States Nestle Switzerland X CITGO Venezuela Shell Oil Britain X X Valero United States Budweiser Belgium Miller Beer Britain Yuengling United States Bridgestone Tires Japan Dunlop United States Michelin France Callaway United States Cleveland Japan TaylorMade Germany X X X X X X X X X X X X 17 The World Is Getting Smaller and More Prosperous The Global Opportunity Potential for Increased Consumption Solid bars show current consumption of passenger cars, cell phones and the number of internet users. 1.4 Billion Population Shaded bars show potential based on population. 314 Million Population 92.7% 79.7% 77.9% 73.2% 72.0% 199 Million Population 38.3% 124.3% 20.9% 45.0% 1.8% UNITED STATES Population 1.2 Billion BRAZIL 10.1% INDIA 5.8% CHINA Source: © 2013 World Bank (World Development Indicators), ITU (International Telecommunication Union). As of 2012, most recent data available (2005–2012). Internet users are defined as having access to the world wide network. 18 Innovation Will Surprise Us…Again Innovation Will Surprise Us…Again “There is no reason why anyone would want to have a computer in their home.” — Ken Olsen President, Chairman and Founder Digital Equipment Corp., 1977 20 Innovation Will Surprise Us…Again A Look Back…What’s Next? The Beat Goes On Music Units (Millions) 1,521 1,600 1,400 DIGITAL MUSIC (2012) 995 CDS PEAK/1999 1,200 1,000 534 800 530 VINYL RECORDS PEAK/1977 CASSETTES PEAK/1990 600 134 400 8-TRACKS PEAK/1978 200 0 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 2013 Source: Recording Industry Association of America, as of December, 2013. (Most recent data available.) Digital includes Downloaded Singles, Downloaded Albums, Kiosks and Downloaded Music Videos. Total vinyl records, cassettes and CDs includes singles and albums. 21 Innovation Will Surprise Us…Again The World Is Changing Gene Therapy & Regenerative Medicine Nanotechnology Green Energy Robotics Cloud Computing 22 Quality Companies Are Not Short-Sighted Quality Companies Are Not Short-Sighted Leaders Can Emerge During Tough Times All of these companies were founded during recessions Average Recession Length: 12 MONTHS Source: Company websites. Recessions as identified by National Bureau of Economic Research (NBER). Logos are trademarks of their respective owners and are used for illustrative purposes and should not be construed as an endorsement or sponsorship of Franklin Templeton Investments. 24 Quality Companies Are Not Short-Sighted Dividends Make a Difference! Dow Jones Industrial Average Growth of a $10,000 Investment This chart is for illustrative purposes only and does not reflect the performance of any Franklin Templeton fund. Dividends can be increased, decreased or totally eliminated without notice. Source: Dow Jones & Company. Total return figures assume reinvestment of dividends. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. 25 Quality Companies Are Not Short-Sighted Dividends and Performance Average Annual Total Returns of S&P 500 Stocks by Dividend Policy 30-Year Period Ended December 31, 2014 10.73% 7.40% 2.68% 0.40% Dividend Strength has Historically Tied to STRONG PERFORMANCE -4.63% Top Decile of Dividend Payers by Dividend Yield Dividend Cutters & Non-Dividend-Paying Dividend Payers with Dividend Growers & Eliminators Stocks No Change Initiators Past performance does not guarantee future results. 1. Source: © 2015 Ned Davis Research Group, Inc. Indexes are unmanaged and one cannot invest directly in an index. All stocks were categorized by the following methodology for the 12-month period ended 12/31/14: Top Decile of Dividend Payers by Dividend Yield represents the top 10% of dividend-paying stocks in the S&P 500 (ranked by dividend yield); Dividend Cutters and Eliminators represents stocks in the S&P 500 that have lowered or eliminated their dividend; Non-Dividend-Paying Stocks represents non-dividend-paying stocks of the S&P 500; Dividend Payers With No Change represents all dividend-paying stocks of the S&P 500 that maintained their existing dividend rate; and Dividend Growers and Initiators represents all dividend-paying stocks of the S&P 500 that raised their existing dividend or initiated a new dividend. 26 Quality Companies Are Not Short-Sighted Dividend Payers Risk/Return 30-Year Period Ended December 31, 2014 Average Annual Total Return 12% Dividend-Paying Stocks 8% Non-Dividend-Paying Stocks 4% 0% 12% 16% 20% 24% 28% Risk Past performance does not guarantee future results. 1. Source: © 2015 Ned Davis Research Group, Inc. The index is unmanaged, and one cannot invest directly in an index. Indexes represent the dividend-and non-dividend-paying stocks of the S&P 500 Index Geometric Equal-Weighted Total Return Index, which is calculated using monthly equal-weighted geometric averages of the total returns of all dividend-paying stocks and non-dividend-paying stocks. Risk is measured by annualized standard deviation. 27 Equities Help Protect Purchasing Power Equities Help Protect Purchasing Power Inflation Shrinks Your Buying Power1 U.S. Stamp1,2 Gallon of Milk1,3 New Car1,4 College Tuition1,5 1994 $0.29 $2.89 $17,803 $18,814 2014 $0.49 $3.82 $25,279 $31,231 2034 (E) $0.77 $5.99 $39,652 $48,987 1. Source: U.S. Bureau of Labor Statistics 2. Source: U.S. Postal Regulatory Commission. U.S. stamp prices are based on the year-end rate for the first ounce of a first-class letter. 3. Source: U.S. Bureau of Labor Statistics. Price per gallon of milk prior to 1995 is based on year-end price per half-gallon. Subsequent years' price per gallon of milk is based on yearend price per gallon. 4. Source: U.S. Department of Commerce. New car historical prices are based on average prices per year, due to seasonality. 5. Source: The College Board. Tuition prices are based on full-time students over a 9-month academic year for private, not-for-profit, 4-year universities. Prices are enrollment-weighted. 29 Equities Help Protect Purchasing Power After Inflation… December 31,1977–December 31, 2014 $18 $1 invested was worth: $16 STOCKS $16.74 $14 $12 60% STOCKS 40% BONDS $13.21 BONDS $8 $6.43 GOLD $1.93 $6 CASH EQUW. $1.76 $4 U.S. DOLLAR $0.26 $10 $2 $0 1977 1982 1987 1991 1996 2000 2005 2010 2014 This chart is for illustrative purposes only and does not reflect the performance of any Franklin Templeton fund. Source: © 2015 Morningstar. Stocks are represented by S&P 500 Index; Bonds are represented by Ibbotson Associates SBBI Long Term Corporate Index; Cash Equivalents are represented by the P&R 90-Day U.S. Treasury Index; Gold is represented by the S&P GSCI Gold Spot Index; U.S. Dollar is represented by the growth of the nominal dollar beginning in 1978, taking inflation into account. Inflation is calculated using the CPI. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. 30 5 Reasons to Be an Equity Investor in the Decade Ahead 1. History Favors a Return to the Mean 2. The World Is Getting Smaller (and More Prosperous) 3. Innovation Will Surprise Us...Again 4. Quality Companies Are Not Short-Sighted 5. Equities Help Protect Purchasing Power 31 What’s Your Vision of 2020? The Importance of Working with Your Advisor • Keeps emotions out of investing • Builds a long-term investment strategy that is appropriate for your risk tolerance and goals • Ensures you stay on course with regular reviews and adjustments to your investment strategy 33 What Are the Risks? All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Investments in fast-growing industries like the technology and telecommunications sectors (which have historically been volatile) could result in increased price fluctuation, especially over the short term. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size and lesser liquidity. These and other risk considerations are discussed in a fund prospectus. 34 Franklin Templeton Distributors, Inc. One Franklin Parkway San Mateo, California 94403-1906 (800) DIAL BEN®/342-5236 franklintempleton.com Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN/342-5236 or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money. © 2015 Franklin Templeton Investments. All rights reserved. 2020 PPT 02/15 Questions/Comments Thank You!