The Charts You Need to See It’s Impossible to Know How Investments Will Perform The Risk You Take by Not Investing in Every Asset Class Annual performance of 16 major asset classes and market sectors. Each color represents an asset and Market Sector class or market sector. As you can see, returns are random! Average annual return of a hypothetical portfolio equally weighted in 16 major asset classes and market sectors.

2009–2018 Best 2008–2018

8% 6% per year 6%

4% 2% per year 2%

0 Worst If you invested in If you missed the all 16 asset classes 3 best each year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 and market sectors

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Source: Morningstar. An index is a portfolio of specific securities (common examples are the S&P, DJIA, NASDAQ), the performance of which is often used as a benchmark in judging the relative performance of Source: Morningstar. An index is a portfolio of specific securities (common examples are the S&P, DJIA, NASDAQ), the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance does not guarantee future results. certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance does not guarantee future results. Why You Need to Maintain a Long-Term Focus The Stock Market Rises a Lot and Falls a Little Average Annual Return of the S&P 500 S&P 500 1949–2018

3/09–12/18 10/66–11/68 118 months 10/57–8/59 26 months 10/74–9/76 8/82–8/87 269% 22 months 48% 24 months 60 months 2013–2018 56% 74% 229% 6/49–8/56 10/90–3/00 86 months 5/70–1/73 114 months 267% 155% 32 months 10/02–10/07 16% 6/62–2/66 74% 3/78–11/80 60 months 12% 43 months 12/87–7/90 33 months 99% 80% 31 months per year 62% 12% 65%

8%

8/56–10/57 4% 14 months 7/90–10/90 -22% 8/59–6/62 2/66–10/66 1/73–10/74 3 months 0% 35 months 8 months 21 months -20% 3/00–10/02 10/07–3/09 per year -14% -22% -48% 31 months 17 months 0% -49% -52% Invested all 1,259 days Missed best 11/68–5/70 9/76–3/78 11/80–8/82 8/87–12/87 18 months 18 months 21 months 3 months that the stock market was 31 days If prices are rising, don’t be fearful -36% -19% -27% -34% open for business that a downturn might occur. If prices are falling, get excited about what’s coming next!

888-PLAN-RIC (888-752-6742) EdelmanFinancialEngines.com Source: S&P Capital IQ & Bloomberg. Source: Morningstar. An index is a portfolio of specific securities (common examples are the S&P, DJIA, NASDAQ), the performance of which is often used as a benchmark in judging the relative performance of An index is a portfolio of specific securities (common examples are the S&P, DJIA, NASDAQ), the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance does not guarantee future results. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance does not guarantee future results. The Importance of Rebalancing Poor Timing Causes Investors to Miss Most of the Markets’ Returns 30 Years of Consistent Underperformance

Annualized Returns 1/1/1989–12/31/2018 Different investment results to drift from its original and if the portfolio is not over time will cause a portfolio allocation into something rebalanced, it could become that starts like this . . . like this . . . riskier than when you started. Average Annual Return of 9.97% the S&P 500 Stock Index per year

Cash Average Annual Return of Cash Gov’t Investors of Stock Funds 4.09% Bonds per year Stocks Cash Stocks Gov’t

Stocks Average Annual Return of Bonds Gov’t the Bloomberg Barclays 6.10% Bonds Aggregate Bond Index per year Average Annual Return of 1.79% Investors of Bonds Funds per year

0 4% 8% 12%

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This is a hypothetical illustration meant to demonstrate the principle of portfolio drift. It is not representative of past or future returns of any specific investment vehicle. Source: Dalbar. An index is a portfolio of specific securities (common examples are the S&P 500, DJIA, NASDAQ), the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance does not guarantee future results. 888-PLAN-RIC (888-752-6742) EdelmanFinancialEngines.com

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Investing strategies, such as asset allocation, diversification, or rebalancing, do not assure or guarantee better performance and cannot eliminate the risk of investment losses. All investments have inherent risks, including loss of principal. There are no guarantees that a portfolio employing these or any other strategy will outperform a portfolio that does not engage in such strategies. Past performance does not guarantee future results. AM928144.