Embed Size (px)
Citation preview
Politics & Investing
A Campaign for Your Future
1
Most investors think volatility will increase leading up to the 2016 presidential election1
To gauge investor sentiment about the upcoming presidential election, we surveyed a group of American investors. Not surprisingly, a majority of us, 61%, expect the election to result in increased market volatility.
14%NONE 23%
A LOT
64%A LITTLE
29%
10%61%
No Effect
LessVolatility
MoreVolatility
9%10%
61%
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
14%NONE 23%
A LOT
64%A LITTLE
29%
10%61%
No Effect
LessVolatility
MoreVolatility
9%10%
61%
2
Presidential elections can be nerve-wracking. How might a new administration’s policies impact our day-to-day lives, our jobs, and the wealth we’ve worked hard to accumulate?
Presidents serve the people. And as they strive to protect our nation’s future, we must stay focused on
our own financial futures. Because of the anxiety elections can cause, it’s important to understand the
relationship between politics and investments to approach the election process with confidence.
Politics & your portfolio
“Markets hate change, but ultimately find their footing. The upcoming election will likely cause more stress to American voters than to the stock market.”
Nanette Abuhoff JacobsonAsset Allocation Strategist at Wellington Management and Global Investment Strategist for Hartford Funds
Investor Perceptions
America’s political pulseAs we head into the 2016 election, “we the people” are uncertain. The stakes have changed for this election, and we want a new type of president—one who will shake things up to face today’s challenges, such as terrorism, in addition to protecting our jobs and our portfolios.
Americans’ overall views of the federal government are very negative4
Only 19% say they can trust the government always or most of the time, among the lowest levels in the past half-century
74%
19%
55%
Most elected officals put owninterests ahead of country’s
Ordinary Americans would dobetter job solving problems
Trust the gov’talways/mostof the time
1958 1970 1980 1990 2000 2010 2015
77%
17%
60%
0%
5%
10%
15%
20%
Jun ’15 Jul ’15 Aug ’15 Sep ’15 Oct ’15 Nov ’15 Dec ’15
6/15 7/15 8/15 9/15 10/15 11/15 12/15
16%
13%
9%7%
0%
5%
10%
15%
20%
Most people think presidents have some influence on stock market performance1
14%NONE 23%
A LOT
64%A LITTLE
29%
10%61%
No Effect
LessVolatility
MoreVolatility
9%10%
61%
In general, more people think a Republican president will be better for their investments1
24%
32%
Which do you think will be better for your investments? How much influence does a president have on the stock market?
Due to rounding, percentages may not appear to add up to 100%.
Doesn’t matter
43%
A Republican President
A Democratic President
3
Debates are great for ratingsThe first Republican primary debate, televised by Fox News in August 2015, averaged 24 million viewers.6
In past election cycles, GOP primary debates at this point have averaged only 2 to 5 million viewers.7
In October 2015, the first Democratic primary debate averaged 15.3 million viewers, making it the highest-rated Democratic debate in history.5
BETWEEN
10&13 M I L L I O N
15 MILLION PEOPLE WATCHED
$4.5 m$200,000
$250,000
NFL superbowladvertisement
Election Debateadvertisement
$4.5 m
24 PEOPLE WATCHED
DEMOCRATIC DEBATE
MORE THAN
MILLIONM O R E T H A NREPUBLICAN DEBATE
REPUBLICAN
15 PEOPLE WATCHEDMILLION
M O R E T H A NDEMOCRATIC DEBATE
15m PEOPLE WATCHED
MORE THAN
24m MORE THAN
DEMOCRATIC
57%
55%
36%
5%
37%
The main hope for a new president is that we elect someone who can bring about change3
New ideas and a different approach
Experience and a proven record
Terrorism is the #1 issue on our minds leading into the election2
Recent trends in “most important” U.S. problems
0%
5%
10%
15%
20%
Jun ’15 Jul ’15 Aug ’15 Sep ’15 Oct ’15 Nov ’15 Dec ’15
6/15 7/15 8/15 9/15 10/15 11/15 12/15
16%
13%
9%7%
0%
5%
10%
15%
20%
Which of the following is more important to you in a presidential candidate?
n Economy n Government n Gun violence n Terrorism
Due to rounding, percentages may not appear to add up to 100%.
4
Republican Democrat
Black MondayIf you were an investor during the Crash of 1987, it’s likely you remember that day well. On October 19, 1987, the market plummeted, shedding 22% of its value before nightfall.
President Ronald Reagan was quick to reassure the nation. “All the economic indicators are solid,” Reagan said. “There is nothing wrong with the economy.”
5
Past party performance is no guarantee of future results
Although the difference in the returns below seems to contradict the headline above, in all actuality, presidents have little direct control over the stock market.
So what does control the stock market and influence the economy?
Political Party & Market PerformancePolitical Party & Market Performance
8.71%
13.29%
Average annual returns under Republican & Democrat presidential terms9
Average Annual S&P 500 Returns (1/20/1961 - 12/31/2015)
1. Company/business profitability Increased demand for goods and services boost company profits and, ultimately, stock prices.
2. Interest rates Currently, low interest rates are helping to boost
economic growth and make firms more profitable, and helping stocks to look more attractive than saving money in a bank or holding bonds.
3. Investor confidence & expectations We’re driven by emotion. When the going is good, so are we. But when prices fall, we often follow suit and exit the market.
4. Global markets In the course of analyzing all our investment choices,
stocks can benefit when bonds or other investments seem less appealing, depending on the investing environment.
Underlying factors that govern the stock market10
The S&P 500 Index is a composite of 500 leading companies in the United States. Past performance is no guarantee of future results. Indices are unmanaged and not available for direct investment.
$119,830BY 12/31/15
$10,000 INVESTED ON 10/16/87 WOULD
HAVE GROWN TO
AVERAGE ANNUAL RETURN
9.20%
Indeed, equities ended the year in the black. Granted, the market was only up a scant 2%. But 1987 ended in positive territory, not negative.
More importantly, investors who didn’t abandon equities during those dark days were
handsomely rewarded. A modest $10,000 invested immediately before Black Monday on October 16, 1987, would have been worth $119,830 (average annual return 9.20%) by December 31, 2015.9
6
Of the many factors that influence the stock market, the president is likely the least of them.
As mentioned on the previous page, broader macroeconomic influences are what truly drive the
markets. Consider this: As the largest company in the S&P 500 Index,11 the release of a new, cutting-edge product from Apple will move the market more directly than the president.
Does the stock market have a commander in chief?
iPhoneTM vs. White House: Which has a bigger effect on the markets?
The power of the iPhone11
� Made mainly overseas and sold worldwide, it stimulates the global economy
� Sales typically surge when a new phone or upgrade is announced
� Apple is responsible for creating and supporting 1.9 million jobs. Nearly three-quarters of those jobs—1.4 million—are attributable to the iOS ecosystem12
� 94% of small businesses use smartphone technology, saving them $65 billion a year and increasing productivity13
Performance is represented by the S&P 500 Index. Past performance is no guarantee of future results. Indices are unmanaged and not available for direct investment.
Party affiliation & market performance —are they related?There’s a perpetual debate as to whether one party can better handle the presidency than the other. For investors, it’s a moot point. As the chart below shows, stocks have
done well in the long term with a mix of Democratic and Republican presidents.
Political Party & Market PerformancePolitical Party & Market PerformancePolitical Party & Market Performance
$1,000
$10,000
$100,000
$1,000,000
$10,000,000
12/31/60 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 12/31/15
Bay
of P
igs
Cuba
n M
issi
le C
risis
JFK
Assa
ssin
ated
Riot
s in
Wat
ts, L
os A
ngel
es
Assa
ssin
atio
n of
Mar
tin L
uthe
r Kin
g
Tet O
ffens
ive,
Vie
tnam
Kent
Sta
te S
hoot
ings
Wat
erga
te S
cand
al
Oil E
mba
rgo
Nix
on R
esig
ns
U.S.
With
draw
s fro
m V
ietn
am
“Whi
p In
flatio
n N
ow”
Carte
r's “
Mal
aise
” Sp
eech
Host
age
Cris
is in
Iran
Oil C
risis
Reco
rd In
flatio
n
Reag
an S
hot b
y Jo
hn H
inkl
ey
Reco
rd U
nem
ploy
men
t
Iran
Cont
ra S
cand
al
U.S.
Bom
bs L
ibya
Blac
k M
onda
y
Exxo
n Va
ldez
Oil
Spill
Iraq
Inva
des
Kuw
ait
Pers
ian
Gulf
War
(Des
ert S
torm
)
Los
Ange
les
Riot
s
Mis
sile
Atta
ck A
gain
st Ir
aq
Bom
bing
of F
eder
al B
uild
ing
in O
klah
oma
City
Glob
al E
cono
mic
Turm
oil
Clin
ton
Impe
ache
d
Y2K
Tech
nolo
gy F
ears
9/11
Enro
n Ba
nkru
ptcy
War
Aga
inst
Iraq
Hurri
cane
Kat
rina
The
2008
Fin
anci
al C
risis
Gene
ral M
otor
s Fi
les
for B
ankr
uptc
yHu
rrica
ne S
andy
Briti
sh P
etro
leum
Oil
Spill
80,0
00 P
eopl
e Ri
ot a
s Gr
eece
Sig
ns A
uste
rity
Mea
sure
s
Trou
bled
Deb
ut o
f Affo
rdab
le C
are
Act
Ebol
a Ou
tbre
ak
ISIS
Atta
cks
Bernard Mado�, pleads guilty to 11 counts of fraud, money laundering, perjury and theft. March 2009General Motors �les for bankruptcy June 2009BP oil spill April 2010Fed launches second round of Quantitative Easing (QE2) November 201080,000 people riot as Greece signs austerity measures Feb 2011
Troubled Debut of A¬�ordable Care Act Oct 2013Ebola outbreak Sept 2014
General Motors Files for BankruptcyEbola Outbreak
ISIS Attacks
$10,000 invested in 1961 would have grown to nearly $2 million in 20159
Average annual S&P 500 Index Returns returns during each administration
John F.Kennedy
1961–1963
12.4%S&P 500 Index
Lyndon B. Johnson
1963–1969
10.3%S&P 500 Index
Richard M. Nixon
1969–1974
-1.6%S&P 500 Index
Gerald R. Ford
1974–1977
18.1%S&P 500 Index
Jimmy Carter
1977–1981
11.7%S&P 500 Index
Ronald R. Reagan
1981–1989
14.2%S&P 500 Index
7 Past performance is no guarantee of future results. Indices are unmanaged and not available for direct investment.
Party affiliation & market performance —are they related?Every president faces challenging events and must conquer crises during their time in office. But as a country, we’ve always found a way to overcome them.
$1,000
$10,000
$100,000
$1,000,000
$10,000,000
12/31/60 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 12/31/15
Bay
of P
igs
Cuba
n M
issi
le C
risis
JFK
Assa
ssin
ated
Riot
s in
Wat
ts, L
os A
ngel
es
Assa
ssin
atio
n of
Mar
tin L
uthe
r Kin
g
Tet O
ffens
ive,
Vie
tnam
Kent
Sta
te S
hoot
ings
Wat
erga
te S
cand
al
Oil E
mba
rgo
Nix
on R
esig
ns
U.S.
With
draw
s fro
m V
ietn
am
“Whi
p In
flatio
n N
ow”
Carte
r's “
Mal
aise
” Sp
eech
Host
age
Cris
is in
Iran
Oil C
risis
Reco
rd In
flatio
n
Reag
an S
hot b
y Jo
hn H
inkl
ey
Reco
rd U
nem
ploy
men
t
Iran
Cont
ra S
cand
al
U.S.
Bom
bs L
ibya
Blac
k M
onda
y
Exxo
n Va
ldez
Oil
Spill
Iraq
Inva
des
Kuw
ait
Pers
ian
Gulf
War
(Des
ert S
torm
)
Los
Ange
les
Riot
s
Mis
sile
Atta
ck A
gain
st Ir
aq
Bom
bing
of F
eder
al B
uild
ing
in O
klah
oma
City
Glob
al E
cono
mic
Turm
oil
Clin
ton
Impe
ache
d
Y2K
Tech
nolo
gy F
ears
9/11
Enro
n Ba
nkru
ptcy
War
Aga
inst
Iraq
Hurri
cane
Kat
rina
The
2008
Fin
anci
al C
risis
Gene
ral M
otor
s Fi
les
for B
ankr
uptc
yHu
rrica
ne S
and y
Briti
sh P
etro
leum
Oil
Spill
80,0
00 P
eopl
e Ri
ot a
s Gr
eece
Sig
ns A
uste
rity
Mea
sure
s
Trou
bled
Deb
ut o
f Affo
rdab
le C
are
Act
Ebol
a Ou
tbre
ak
ISIS
Atta
cks
Bernard Mado�, pleads guilty to 11 counts of fraud, money laundering, perjury and theft. March 2009General Motors �les for bankruptcy June 2009BP oil spill April 2010Fed launches second round of Quantitative Easing (QE2) November 201080,000 people riot as Greece signs austerity measures Feb 2011
Troubled Debut of A¬�ordable Care Act Oct 2013Ebola outbreak Sept 2014
General Motors Files for BankruptcyEbola Outbreak
ISIS Attacks
$1,894,374 Ronald R. Reagan
1981–1989
14.2%S&P 500 Index
George H.W. Bush
1989–1993
15.7%S&P 500 Index
George W. Bush
2001–2009
-2.9%S&P 500 Index
Barack Obama
2009-2017
14.9%S&P 500 Index
Bill Clinton
1993–2001
17.2%S&P 500 Index
8
“America was not built on fear. America was built on courage, on imagination, and an unbeatable determination to do the job at hand.”
—Harry Truman, President
9
Presidential Wisdom Look back almost 85 years, and today’s economic concerns can seem almost trivial.
The country was debilitated by the Depression when Franklin D. Roosevelt was elected president in 1932. Congress, and a beleaguered nation, hung on every word of FDR’s first inaugural address, hoping for national insight. He gave us national inspiration.
Political Party & Market PerformanceThe Cost of Anxiety
Choosing safety during election years can cost you9
Growth of $10,000 Invested in S&P 500 Index
Investment decisions during election yearsAs the election draws near, increased uncertainty puts us on edge, and we might feel the urge to flee to safer investments.
The chart below shows the outcomes for investors who exit the market during election years and re-enter the following
year, those who stay invested throughout, and those who contribute during election years.
Based on the final returns, acting on the fear of an unknown outcome may actually be more detrimental to your portfolio than waiting for the unknown to work itself out.
$1,137,183
$1,769,739
$2,870,377
57%
$1,894,374
36%
5%
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
12/31/60 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 12/31/15
$2,869,460
$1,136,820
’60 ’64 ’68 ’72 ’76 ’80 ’84 ’88 ’92 ’96 ’00 ’04 ’08 ’12 ’16
$10,000
n Fully invested, and added $2,000 during election years
n Fully invested
n Fully invested, but moved to cash during election years
The investor who made additions invested a total of $26,000. Past performance is no guarantee of future results. Indices are unmanaged and not available for direct investment.
“Let me assert my firm belief,” Roosevelt solemnly intoned, “that the only thing we have to fear is, fear itself.”
Of course, he was right. And, desperate as those days were, $100 invested after that historic speech would have grown to some $823,600 (average annual return 11.50%) by
December 31, 2015.9
Granted, even $100 was hard to come by back then. But Roosevelt’s message was not about material things. Roosevelt’s words then, and still today, speak to faith…in our nation, in our future, and in our ourselves.
-40%
-20%
0%
20%
40%
’60 ’64 ’68 ’72 ’76 ’80 ’84 ’88 ’92 ’96 ’00 ’04 ’08 ’12 ’15
-40%
-20%
0%
20%
40%
’60 ’64 ’68 ’72 ’76 ’80 ’84 ’88 ’92 ’96 ’00 ’04 ’08 ’12
Election year returns have been mostly positive9
S&P 500 Index Returns
More ups than downsRead our lips: Investing reactively is typically a poor campaign strategy for your finances. And changing allocations before an election could be especially costly. Why?
Historically, election year returns have been positive 85% of the time. Of the last 14 election cycles, election years have produced positive returns 12 times.
Election Year Stats
Number of positive election years: 12
Number of negative election years: 2
$823,600BY 12/31/15
$100 INVESTEDON 3/06/33 WOULD HAVE GROWN TO
AVERAGE ANNUAL RETURN
11.50% 10
Past performance is no guarantee of future results. Indices are unmanaged and not available for direct investment.
Performance is represented by the S&P 500 Index. Past performance is no guarantee of future results. Indices are unmanaged and not available for direct investment.
“ Beginning this moment, this nation will never use more foreign oil than we did in 1977 – never.”
—Jimmy Carter
Here’s another reason to stay invested: The market and its asset classes are unpredictable. The chart below illustrates that each year, different asset classes outperform.
Rather than try to time the market around an election or political party, prepare a diversified portfolio that can take advantage of the ebbs and flows of the market.
Diversify and carry a big stick
11
Investment performance shifts regardless of political party
16.25 43.82 16.47 16.87 17.12 9.16 6.72 19.44 16.19
14.48 17.55 16.00 15.68 16.11 8.44 4.44 15.81 15.69
14.32 17.12 12.80 14.96 9.98 7.43 3.74 15.21 14.00
12.45 17.00 11.99 14.26 8.82 6.08 2.01 11.05 7.95
12.21 12.81 11.32 11.72 7.69 5.50 -0.66 10.51 6.11
12.21 12.10 10.59 8.00 7.45 4.75 -2.08 10.51 1.81
11.14 11.02 9.69 6.79 6.44 2.79 -5.14 3.51 1.10
9.93 9.02 6.91 5.49 6.20 2.16 -5.23 2.37 0.75
7.16 7.21 -4.15 4.67 5.40 -0.19 -5.35 0.14 0.04
n Large Capsn Mid Capsn Small Capsn Internationaln US Government Bondsn US Corporate Bondsn Short Durationn Cash n Diversified Portfolio
BEST
WORST
Ronald Reagan: Term 1
Ronald Reagan: Term 2
George H.W. Bush
Bill Clinton: Term 1
Bill Clinton: Term 2
George W. Bush: Term 1
George W. Bush: Term 2
Barack Obama: Term 1
Barack Obama: Term 2
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. For Illustrative Purposes only. Indices are unmanaged and not available for direct investment, and do not represent the performance of a single fund or any of the Hartford Funds. n Large-Caps Russell 1000 Index measures the performance of the large-cap segment of the U.S. equity universe. n Mid Caps Russell Midcap Value Index measures the performance of the mid-cap value segment of the U.S. equity universe. n Small Caps Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. n International Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE) is a free float-adjusted capitalization index that is designed to measure developed market equity performance, and excludes the U.S. and Canada. n US Governmant Bonds Barclays US Government Bond Index includes US dollar denominated, fixed-rate, nominal US Treasuries and US agency debentures. n US Corporate Bonds Barclays US Credit Index measures the investment grade, US dollar-denominated, fixed-rate, taxable corporate and government related bond markets. n Short Duration Barclays 1-3 Year Government/Corporate Bond Index is a broad measure of the performance of short-term government and corporate fixed-rate debt issues. n Cash Bank of America Merrill Lynch U.S. 3 Month Treasury Bill Index is an index of short-term U.S. Government securities with a remaining term to final maturity of less than three months. n Diversified Portfolio is represented by equal allocations to all indices (except Cash). Performance is from January 20, 1981 through December 31, 2015. Source: Morningstar Direct, 1/16
Political Party & Market PerformanceThe Cost of Anxiety
� � � � � � � � � �
Innovation is constant and can drive markets14
1963-69 Lyndon B. Johnson Artificial heart Computer mouse Bar-code scanner
1974-77 Gerald R. Ford Laser & ink-jet printers Post-It notes Liposuction
1981-89 Ronald Reagan Digital cell phones Prozac
1993-01 Bill Clinton Personal GPS widely available HIV protease inhibitor Google
2009-16 Barack Obama 3-D printing Android iPad
1961-63 John F. Kennedy Audio cassettes Communications satellite Light-emitting diode (LED)
1969-74 Richard M. NixonFloppy diskLiquid-crystal display (LCD) First video game
1977-81 Jimmy Carter Magnetic Resonance Imaging (MRI) Walkman
1989-93: George H.W. Bush World Wide Web & Internet Digital answering machine
2001-09 George W. Bush iPod & iPhone Hybrid car Facebook Blu-rays
$547,094BY 12/31/15
$10,000 INVESTEDON 7/16/79 WOULD HAVE GROWN TO
AVERAGE ANNUAL RETURN
11.60%
We’ve made great strides toward achieving oil independence. But while we’re currently enjoying some of the lowest oil prices we’ve seen in years, since Jimmy Carter’s presidency we’ve seen oil prices hit repeated record highs.
Think back to 1979, when the nation suffered through its second gas rationing period (the first was in 1973). If your license plate ended in an
odd number back then, on an “even” day you couldn’t buy a gallon of gas at any price.
Yet, had you invested $10,000 on July 16, 1979, the day after then-President Jimmy Carter’s famous “malaise” speech, your investment would have grown to $547,094 (average annual return 11.60%) by December 31, 2015.9
Mudslinging and negative campaigning sway our focus toward pessimism, undermining our confidence to invest. But as we see it, there’s always a way to find optimism in the future and reasons to invest in it.
For example, innovation is so rapid that most of us take it for granted. Whether we notice it or not, new technology and products are constantly helping the economy grow by creating new jobs and products to be consumed.
Faith in the future
12
Performance is represented by the S&P 500 Index. Past performance is no guarantee of future results. Indices are unmanaged and not available for direct investment.
– 14 Sources: The Top 50 Inventions of the Past 50 Years, popularmechanics.com, 11/05; 20th Century Timeline, inventors.about.com, retrieved 1/6/16; The 90s - the technology, science, and inventions 20th Century Timeline, inventors.about.com, retrieved 1/6/16
“Read My Lips…” “It’s the Economy…”Just how powerful can pocketbook politics be in deciding elections? Consider President George H.W. Bush.
Bush handily won his party’s nomination (“Read my lips…No new taxes!”) and the election of 1988. By 1991, Bush seemed unbeatable for re-election, with a near record 89% approval rating following the Gulf War.
But like financial markets, politics can turn quickly. By the summer of 1992, his approval rating had plummeted to a dismal 29%, weighed down by national fears that we were going into recession, and the perception that he had reneged on his promise not to raise taxes.
13
The White House Your HousePresidential candidates have priorities and agendas with a four-year vision. We the people, on the other hand, need to have a decades-long vision. There are many influences on your portfolio beyond who’s sitting in the White House, so don’t allow anxiety around elections to derail your portfolio from working toward your long-term goals.
Political Party & Market PerformanceNext Steps
Stay invested in your own campaign Elections can be daunting. Will the new administration’s policy changes impact your investments? Don’t let this short-term anxiety get in the way of your long-term strategy. Making an anxiety-based change today is more likely to be harmful than weathering the potential changes you fear.
Your campaign for long-term success
Meanwhile, little-known Arkansas Gov. Bill Clinton was capitalizing on those concerns, in what was a hard-hitting political campaign.
In the waning days of the campaign, polls indicated that Bush was narrowing the gap. But on November 3, economic issues overpowered international interests. Bush lost the popular vote by a 43% to 38% margin, and
“It’s the economy, stupid,” became a national catch phrase symbolizing just how powerful pocketbook politics can be.
$10,000 invested in January 1993, when President Clinton took office, would have grown to $74,036 (average annual return 9.12%) by year end 2015.9
14
Seek a trusted advisorThe president has a cabinet of informed advisors. You should, too. A financial advisor can be a guide and an effective sounding board, and can help you create a plan to stay on track toward reaching your goals. As the bar chart shows, investors who move in and out of the markets have historically underperformed the market. A financial advisor can help stay on track to reach your goals.
Have a strategy sessionEvery candidate employs an intentional, well-thought out strategy to their campaign. Have you done the same with your investments? Are your sights set on the right goals and over the right time frame? Have you considered your tolerance for risk? These are critical considerations.
Your HouseIndividual investors have underperformed the market15
30-Year Returns for Period Ending 12/31/14
$74,036BY 12/31/15
A $10,000 INVESTEDON 1/20/1993 WOULD
HAVE GROWN TO
AVERAGE ANNUAL RETURN
9.12%Performance is represented by the S&P 500 Index. Past performance is no guarantee of future results. Indices are unmanaged and not available for direct investment.
15Source: DALBAR’s Annual Quantitative Analysis of Investor Behavior (QAIB), 2015. Performance data for indices represents a lump sum investment in January 1985 to December 2014 with no withdrawals. Dalbar’s Quantitative Analysis of Investor Behavior Methodology: Dalbar’s Quantitative Analysis of Investor Behavior uses data from the Investment Company Institute (ICI), Standard & Poor’s and Barclays Index Products to compare mutual fund investor returns to an appropriate set of benchmarks. Covering the period from January 1, 1985, to December 31, 2014, the study utilizes mutual fund sales, redemptions and exchanges each month as the measure of investor behavior. These behaviors reflect the “average investor.” Based on this behavior, the analysis calculates the “average investor return” for various periods. These results are then compared to the returns of respective indices.
3.7%
10.4%
3.8%
11.1%
S&P 500 Index
Average Equity Investor
1 Hartford Funds survey, 9/15; 794 total respondents with $100,000 to $500,000 invested.2 Americans Name Terrorism as No. 1 U.S. Problem, gallup.com, 12/14/153 Pew Research Center, September 2015 Political Survey4 Pew Research Center, Beyond Distrust: How Americans View Their Government, 11/23/155 Democratic debate hits record 15.3 million viewers, money.cnn.com, 10/14/15 6 Republican debate completely smashed CNBC’s ratings record, fortune.com, 10/29/157 CNBC’s debate draws record 14 million viewers - well short of Fox and CNN, money.cnn.
com, 10/29/158 Fox’s GOP debate had record 24 million viewers, money.cnn.com, 8/7/159 Morningstar Direct, 1/1610 Factors Affecting the Stock Market, economicshelp.org/blog, 5/4/1211 When iPhones Ring, the Economy Listens, nytimes.com, 10/25/1412 Creating jobs through innovation, 2015 Update, apple.com13 How Mobile Technology Has Revolutionized Small Business, http://tech.co/mobile-
technology-revolutionized-small-business, 10/26/1414 Sources: The Top 50 Inventions of the Past 50 Years, popularmechanics.com, 11/05; 20th
Century Timeline, inventors.about.com, retrieved 1/6/16; The 90s - the technology, science, and inventions 20th Century Timeline, inventors.about.com, retrieved 1/6/16
All investments are subject to risks, including possible loss of principal. Diversification does not ensure a profit or protect against a loss in a declining market. Mid-and small-cap stocks can have greater risk and volatility than large-cap stocks. Foreign investments can be riskier than U.S. investments due to the adverse effects of currency exchange rates, differences in market structure and liquidity, as well as specific country, regional, and economic developments. Fixed-income securities are subject to credit risk, liquidity risk, call risk, and interest-rate risk. As interest rates rise, bond prices generally fall. Mortgage-backed securities are subject to credit risk, interest-rate risk, prepayment risk, and extension risk.
Investors should carefully consider the investment objectives, risks, charges, and expenses of Hartford Funds before investing. This and other information can be found in the prospectus and summary prospectus, which can be obtained by calling 888-843-7824 (retail) or 800-279-1541 (institutional). Investors should read them carefully before they invest.
Hartford Funds are underwritten and distributed by Hartford Funds Distributors, LLC. Hartford Funds Management Company, LLC is the Funds’ investment manager. The Funds are sub-advised by Wellington Management Company LLP (with the exception of certain fund of funds), a SEC-registered investment adviser unaffiliated with Hartford Funds.
Wellington Management Company LLP is a SEC-registered investment adviser and is unaffiliated with Hartford Funds. 119087 MAI040_0116
At Hartford Funds, your investment satisfaction is our measure of success. That’s why we use an approach we call human-centric investing that considers not only how the economy and stock market impact your investments, but also how societal influences, generational differences, and your stage of life shape you as an investor.
Instead of cookie-cutter recommendations and generic goals, we think you deserve personalized advice from a financial advisor who understands your financial situation and can build a financial plan tailored to your needs.
Delivering strong performance is always our top priority. But the numbers on the page are only half the story. The true test is whether or not an investment is performing to your expectations.
hartfordfunds.com 888-843-7824 @hartfordfunds hartfordfunds.com/linkedin
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
