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Presenter Name (Edit on Title Master)Title (Edit on Title Master)June XX, 2006 (Edit in View: Header and Footer)
©2006 Lincoln National CorporationLFD0606-0995 (UBP-0012-06) 06/06For educational and informational purposes only.
Success is an attitude
Small steps to accomplish great things!
LFD0606-0995
For educational and informational purposes only.
Please read
This seminar is for Educational and Informational purposes only. It is intended to be accurate and authoritative in regard to the subject matter covered. Lincoln Financial Distributors, Inc. presents this seminar for informational purposes only. It is presented with the understanding that we are not engaged in rendering legal or tax advice.
While this seminar discusses general tax aspects and investment concepts, we make no representation as to suitability for individual clients. Interested parties should seek their own tax and legal advice before implementing a plan of the type described in this presentation.
For educational and informational purposes only.
“It is our attitude at the beginning of a difficult task which, more than anything else, will affect it’s successful outcome.”
William James
American philosopher
©2006 Lincoln National CorporationLFD0606-0995 UBP-0012-06 06/06
For educational and informational purposes only.
What would you like to get out of today?
©2006 Lincoln National CorporationLFD0606-0995 UBP-0012-06 06/06
LFD0606-0995
For educational and informational purposes only.
Agenda items
Types of common investments
Risks of investing
Simple ways to minimize risk
LFD0606-0995
For educational and informational purposes only.
Agenda items
Types of common investments
Cash
Cash equivalents (CDs, Treasury bills)
Bonds
Stocks
Mutual funds
Retirement accounts
LFD0606-0995
For educational and informational purposes only.
Types of investments
Cash• Checking account• Savings account
For educational and informational purposes only.
“The most powerful force in the universe is compound interest.”
—Albert Einstein
LFD0606-0995
For educational and informational purposes only.
Types of investments
Cash• Simple interest vs. compound interest
Which would you rather choose?
For illustrative purposes only and is not indicative of any particular investment or performance.
Investment $1,000
Time 20 years
Interest rate 7%
Simple interest account $2,330.00 after 20 years
Compound interest account $3,616.53 after 20 years
LFD0606-0995
For educational and informational purposes only.
Types of investments
Cash equivalents• Certificates of deposit• Treasury bills• Money market accounts
LFD0606-0995
For educational and informational purposes only.
Types of investments
Bonds• Corporate bonds• Municipal bonds• Government bonds
LFD0606-0995
For educational and informational purposes only.
Types of investments
Stocks
LFD0606-0995
For educational and informational purposes only.
Types of investments
Mutual funds
LFD0606-0995
For educational and informational purposes only.
Types of investments
Retirement accounts• Individual Retirement Account (IRA)• 401(k)• 403(b)
For educational and informational purposes only.
Agenda items
Risks of investingInvestment riskMarket riskLiquidity riskInterest rate riskCredit riskInflation risk
LFD0606-0995
For educational and informational purposes only.
Risks of investing
Investment risk
LFD0606-0995
For educational and informational purposes only.
Risks of investing
Market risk
LFD0606-0995
For educational and informational purposes only.
Risks of investing
Liquidity risk
LFD0606-0995
For educational and informational purposes only.
Interest Rates
Bond Prices
Risks of investing
Interest rate risk
LFD0606-0995
For educational and informational purposes only.
Risks of investing
Credit risk
LFD0606-0995
For educational and informational purposes only.
Risks of investing
Inflation risk• If over 30 years, the value of $1 decreases by 3% per
year*
*The average rate of inflation is 3% over the past 20 years. Inflation is represented by the Consumer Price Index.
$1.50
$3.00
$3.00
$7.28
$8.00
$19.42
Current average cost
Projected cost
LFD0606-0995
For educational and informational purposes only.
Agenda items
Simple ways to minimize risk
Diversification
Asset allocation
Rebalancing
*These concepts do not assure a profit or protect against an investment loss.
LFD0606-0995
For educational and informational purposes only.
Simple ways to minimize risk
Diversification*Diversification does not assure a profit or protect against an investment loss.
CashStocksBonds
LFD0606-0995
For educational and informational purposes only.
Simple ways to minimize risk
Asset allocation*Asset Allocation does not assure a profit or protect against an investment loss.
Younger investor Older investor
These examples are for illustrative, educational, and informational purposes only.
80% 50% 40%
40%20%
40%
10%10% 10%
LFD0606-0995
For educational and informational purposes only.
Simple ways to minimize risk
Rebalancing*Rebalancing does not assure a profit or protect against an investment loss
Stocks -$1,000
Bonds -$1,000
Stocks -$1,100
Bonds -$1,000
after one year
Stocks -$1,050
Bonds -$1,050
rebalanced
LFD0606-0995
For educational and informational purposes only.
Putting your knowledge to use
Jonah’s concerns:• losing the money he had saved• not having money for a “rainy day”
Jonah’s investments:• savings account
- he used the savings account to accumulate his money• Treasury bill
- he invested his money in a T-bill because they are low risk• low risk mutual fund
- he used the mutual fund to help grow his money
LFD0606-0995
For educational and informational purposes only.
Only the beginning
It starts with you!
LFD0606-0995
For educational and informational purposes only.
Thank you
Questions?
Neither Lincoln nor its representatives provide legal or tax advice. You should contact your tax advisor or attorney regarding your particular situation.
Securities and investment advisory services distributed by Lincoln Financial Distributors, Inc., a broker/dealer and registered investment advisor. Insurance products are issued by Lincoln affiliates. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates.