Weather Mkt Storms

Weathering Market StormsChart a Course to Help Reach Your Goals

NOT FDIC INSURED—NO BANK GUARANTEE—MAY LOSE VALUE

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Important Information

The information in this presentation is being provided as general information and is not intended to be legal or tax advice. You should consult your tax advisor for specific questions related to your particular situation.

A prospectus contains important information about a fund, including its investment objectives, risks, charges, and ongoing expenses, which an investor should carefully consider before investing. To obtain a prospectus on any Lord Abbett mutual fund, please contact your investment professional or Lord Abbett Distributor LLC at 888-522-2388 or visit our Website at www.lordabbett.com. Read the prospectus carefully before investing.

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Who We Are and What We Do

• Lord Abbett is an independent, privately held firm founded in 1929 with a singular focus on the management of money.

• We view our business as the practice of a craft.

• We are driven by an unwavering commitment to the stewardship of our clients’ assets.

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Stewardship and Lord Abbett

Stewardship defines the relationship between our firm and our clients.

We take this responsibility seriously and hold ourselves accountable for the results.

This sense of accountability and responsibility is reflected in how we manage

the firm and how we manage money.

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Stewardship at Work

A Prudent Approach

Dedicated Portfolio Teams

A proven, time-tested discipline, understanding the risks associated with return, and developing capabilities based on client needs

17 investment capabilities, 132 investment professionals with an average of 16 years of industry experience, managing more than $110 billion in client assets, compensated solely on investment performance, not on assets gathered*

Consistency of Our Culture

Our Singular Focus

An independent, privately held firm that has maintained a commitment to serving clients’ needs since its founding in 1929

“We believe that an investment firm worthy of the name fosters a sound relationship between the House and the Client.”― From the Lord Abbett Credo published in The Wall Street Journal, 1929

100% of our revenues is generated by the management of money – eliminating unnecessary distractions and aligning our interests with those of our clients

How We Manage the Firm How We Manage Money

* As of 12/31/07.

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Our Agenda

The market rarely moves in a straight line

Market volatility causes investors to make emotional decisions

Why invest in 2008?

These decisions can adversely affect performance

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$0

$1

$10

$100

$1,000

$10,000

Long-Term ReturnsStocks, Bonds, Cash, and Inflation

Ending Balance

Average Return

$3,246 10.4%$79 5.5%$20 3.7%$12 3.1%

Large company stocks (1)

Government bonds(2)

Cash(3)

Inflation(4)

1925 - 2007*

1925 1932 1939 19741967 19951946 19601953 1981 1988 2007

A hypothetical illustration of the growth of $1.00

The historical data are for illustrative purposes only, do not represent the performance of any Lord Abbett mutual fund, and are not indicative of any specific investment.Performance data quoted above are historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The main risk of any investment in a company’s equity or fixed income securities is that values can go up or down depending on market conditions or the performance of the company issuing the securities.*As of 12/31/07. Source: © 2007 Ibbotson Associates, Chicago. All rights reserved. Any copying, republication or redistribution of Ibbotson data is expressly prohibited without prior written consent of Ibbotson. Ibbotson proprietary rights – this slide may not be distributed. (1) Represents S&P 500® Index. (2) Center for Research in Security Prices (CRSP) U.S. Gov Bond File and U.S. Treasury Bill Index. (3) 30-day U.S. Treasury bills. (4) The rate of change of consumer goods prices as measured by the Consumer Price Index for All Urban Consumers (CPI-U). S&P 500® Index: Widely regarded as the standard for measuring large cap stock market performance, this popular index includes a representative sample of leading companies in leading industries. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment. CRSP US Government Bond File Index: The CRSP US Government Bond File is available in two frequencies: daily and monthly. The daily product contains data for about 3,100 marketable US Government securities traded in the secondary market and during the issued trading period from June 14, 1961 to the present. The monthly product contains data for approximately 5,000 bonds, notes, and bills since 1925. Additional CRSP files contain information on stock summaries (indices), treasury bills, maturity portfolios, fama-bliss discount bonds, Risk Free rates, cap based portfolios, S&P 500, and bond, bills, and inflation.U.S. Treasury Bill Index: An index based on the auctions of U.S. Treasury bills, or on the U.S. Treasury's daily yield curve. It is commonly used in determining mortgage rates for mortgages with an unfixed component and as a performance benchmark for investors in the capital markets as it represents a rate of return that investors would be able to get from almost any bank, with minimal effort. Treasury indexes are proprietary. The calculations of treasury indexes and their components vary by the financial institution calculating the index.Consumer Price Index: An inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food, and transportation.

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When Will the Market Return to “Normal”? S&P 500 Index Calendar-Year Total Returns for Large Company Stocks – 1926 to 2007

The historical data are for illustrative purposes only, do not represent the performance of any Lord Abbett mutual fund, and are not indicative of any specific investment.Performance data quoted above are historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted.Stocks, historically, have outperformed other asset classes over the long term, but tend to fluctuate more dramatically over the short term.Source: 2007 Ibbotson Associates, Inc. All rights reserved. Any copying, republication or redistribution of Ibbotson data is expressly prohibited without prior written consent of Ibbotson. Ibbotson proprietary rights; this slide may not be distributed.

Recent volatility is nothing new.

Negative returns: 28% (23 years)

12 years

5 years

31 years

11 years

5 years 5 years

13 years

-20% or more -20% to -10% -10% to 0%

0% to 8% 8% to 12% 12% to 20% 20% or Greater19742002

193019311937

19732001

194119571966

196219691977198119902000

1929193219341939194019461953

198419871992199420052007

194719481956196019701978

19932004

192619591968

19721979198619882006

194419491952196419651971

196719751976198019821983198519891991199519961997199819992003

1927192819331935193619381942194319451950195119541955195819611963

Positive returns: 72% (59 years)

82 years of stock market returns

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The Market Rarely Moves in a Straight Line

In any period of market volatility when peaks and valleys are evident, investors must evaluate their circumstances and risk tolerance. While investors can enjoy the benefits of gains in their portfolios, they must also understand that they can suffer losses when the market goes the other way. Successful investing often requires investors to maintain a long-term focus and ignore short-term market fluctuations and the emotional reactions they can cause.Stocks, historically, have outperformed other asset classes over the long term, but tend to fluctuate more dramatically over the short term.

Performance data quoted above are historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted.

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S&P 500 Index: Ten Years Ending 12/31/07

Source: Standard & Poor’s.*This illustration is based on growth of a $10,000 investment over a 10-year period ended 12/31/07. Results are hypothetical and for illustrative purposes only.The historical data are for illustrative purposes only, do not represent the performance of any Lord Abbett mutual fund, and are not indicative of any specific investment. Stocks, historically, have outperformed other asset classes over the long term, but tend to fluctuate more dramatically over the short term.Performance data quoted above are historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. S&P 500® Index is the standard for measuring large-cap U.S. stock market performance, and includes a representative sample of leading companies in leading industries. An index is unmanaged, does not reflect the deduction of fees or expenses, and is not available for direct investment.

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A Closer Look at the Last Ten Years


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A Closer Look at the Last Ten Years

• “New Economy”

• Technology Bubble

S&P 500® Index

Year Annual Return

1998 28.58%

1999 21.04%

1998-1999


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The Bubble Bursts


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The Bubble Bursts

• Economic downturn/ recession

• Corporate scandals

• Terrorism

• War with Iraq

S&P 500® Index

Year Annual Return

2000 -9.10%

2001 -11.89%

2002 -22.10%

2000-2002

-47%* Peak to Trough Decline 03/24/2000—10/09/2002

Source: Standard & Poor’s.This illustration is based on growth of a $10,000 investment over a 10-year period ended 12/31/07. Results are hypothetical and for illustrative purposes only.The historical data are for illustrative purposes only, do not represent the performance of any Lord Abbett mutual fund, and are not indicative of any specific investment. Stocks, historically, have outperformed other asset classes over the long term, but tend to fluctuate more dramatically over the short term.Performance data quoted above are historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. S&P 500® Index is the standard for measuring large-cap U.S. stock market performance, and includes a representative sample of leading companies in leading industries. An index is unmanaged, does not reflect the deduction of fees or expenses, and is not available for direct investment.

*Cumulative performance

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The Rebound


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The Rebound

• Interest Rate Increases

• High Energy Prices

• Terrorism

• Interest rate cuts

S&P 500® Index

Year Annual Return

2003 28.68%

2004 10.88%

2005 4.91%

2006 15.79%

2007 5.49%

2003-2007


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Market Volatility has Caused Investors to Make Emotional Decisions

Record InflowsQ1 2000

Record OutflowsQ3 2002

Record InflowsQ1 2004

Source: Standard & Poor’s and Strategic Insights*This illustration is based on growth of a $10,000 investment over a 10-year period ended December 31, 2007. Results are hypothetical and for illustrative purposes only.**Cash flows associated with the buying and selling of fixed assets.S&P 500® Index: Widely regarded as the standard for measuring large cap U.S. stock market performance and includes a representative sample of leading companies in leading industries.The index is unmanaged, does not reflect the deduction of fees or expenses, and is not available for direct investment.Past performance is no guarantee of future results.Stocks, historically, have outperformed other asset classes over the long term, but tend to fluctuate more dramatically over the short term.

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Emotional Decisions Can Derail Investment Strategies

*The “best” days to be invested are defined as the days in which the S&P 500 Index delivered its highest returns for the given periods based on historical data.†Returns are measured based on the S&P 500 Index, which is unmanaged. An investor cannot invest directly in an index.S&P 500® Index is the standard for measuring large-cap U.S. stock market performance, and includes a representative sample of leading companies in leading industries. An index is unmanaged, does not reflect the deduction of fees or expenses, and is not available for direct investment. Past performance is no guarantee of future results.

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Why Invest in 2008?

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2008 is Shaping Up to be an Interesting Year…

• Sub prime crisis

• Election uncertainty

• Recession fears

• Turmoil in the fixed income markets

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Recessions/market corrections of 10% or more since 1970 according to the S&P 500 Index:Date of Market Low Correction Following 12 month return

5/26/70 -36.06% 43.73%11/23/71 -13.94% 29.66%10/4/74 -47.99% 37.87%9/15/75 -13.31% 25.78%3/16/78 -16.99% 12.49%11/14/78 -13.55% 11.79%11/7/79 -10.25% 29.35%3/27/80 -17.07% 37.09%9/25/81 -19.75% 9.36%3/8/82 -14.98% 40.92%

8/12/82 -14.24% 58.33%7/24/84 -14.38% 29.60%12/4/87 -33.51% 21.39%1/30/90 -10.21% 5.55%10/11/90 -19.92% 29.10%10/8/98 -19.15% 39.25%4/4/01 -27.77% 2.09%

9/21/01 -26.43% -12.47%10/9/02 -33.75% 33.73%3/11/03 -14.71% 38.22%1/22/08 -16.27% NA

-20.68% 26.14%

Source: © 2007 Ibbotson Associates, Inc., Standard & Poor’s, 2007. S&P 500® Index: Widely regarded as the standard for measuring large cap U.S. stock market performance, this popular index includes a representative sample of leading companies in leading industries. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment. In managing downside risk, or years of large negative returns, you should carefully consider what level of exposure to stocks is appropriate given your risk tolerance, time horizon and individual needs. Stocks, historically, have outperformed other asset classes over the long term, but tend to fluctuate more dramatically over the short term. Past performance is no guarantee of future results. The chart above is for illustrative purposes only and is not indicative of any investment.

Take Advantage of Market Volatility

21 market corrections since 1970

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As of 12/31/07. The historical data are for illustrative purposes only, do not represent the performance of any Lord Abbett mutual fund, and are not indicative of any specific investment.Performance data quoted above are historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted.

Represents S&P 500® Index. S&P 500® Index: Widely regarded as the standard for measuring large cap U.S. stock market performance, this popular index includes a representative sample of leading companies in leading industries. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment.

The main risk of any investment in a company’s equity or fixed income securities is that values can go up or down depending on market conditions or the performance of the company issuing the securities. Stocks, historically, have outperformed other asset classes over the long term, but tend to fluctuate more dramatically over the short term.

Trailing 10-Year Returns: S&P 500 Index

19.21% 18.21% 17.46%

12.94%

9.34%11.07% 12.07%

9.07% 8.42%5.91%

0%

5%

10%

15%

20%

25%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year

Perc

ent

Source: Standard and Poors.

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Rolling 10-Year Returns: S&P 500 Index 1926-2007

Since 1926, there have been 73 rolling 10-year periods.

Only 12 of these rolling 10-year periods have had an annual

return of less than 6%.Source: Ibbotson Associates 2007.S&P 500® Index: Widely regarded as the standard for measuring large cap U.S. stock market performance, this popular index includes a representative sample of leading companies in leading industries. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment.


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S&P 500: 10-Year Periods When Return Was Less Than 6%

10-Year Period Average Annual Return of S&P 500

Next 10-Year Average Return

Next 20-Year Average Return

1926-1935 5.86% 8.42% 12.48%1928-1937 0.02% 9.62% 12.98%1929-1938 -0.89% 7.26% 13.48%1930-1939 -0.05% 9.17% 14.15%1931-1940 1.80% 13.38% 14.76%1937-1946 4.41% 18.43% 13.72%1965-1974 1.24% 14.76% 14.58%1966-1975 3.27% 14.33% 14.59%1968-1977 3.59% 15.26% 16.65%1969-1978 3.16% 16.33% 17.75%1970-1979 5.86% 17.55% 17.87%1998-2007 5.91% ???? ????Average 13.14% 14.82%

Source: Ibbotson Associates 2007.S&P 500® Index: Widely regarded as the standard for measuring large cap U.S. stock market performance, this popular index includes a representative sample of leading companies in leading industries. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment. The historical data are for illustrative purposes only, do not represent the performance of any Lord Abbett mutual fund, and are not indicative of any specific investment.


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“I’ll Wait Until After the Election”

Since 1926, there have been 20 presidential elections.

The average gain during these 17 election years has been 13.43%.

The S&P 500 Index has been positive in 17 of these election years.

Source: Ibbotson Associates 2007.S&P 500® Index: Widely regarded as the standard for measuring large cap U.S. stock market performance, this popular index includes a representative sample of leading companies in leading industries. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment.


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Historically, What Has Happened After Election Years?

Historically, in the 5 years following an election, the S&P 500 Index has averaged

9.30% per year.

Historically, in the 10 years following an election, the S&P 500 Index has averaged

10.25% per year.

Source: Ibbotson Associates 2007.S&P 500® Index: Widely regarded as the standard for measuring large cap U.S. stock market performance, this popular index includes a representative sample of leading companies in leading industries. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment.


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Summary

The market rarely moves in a straight line

Market volatility causes investors to make emotional decisions

In volatility, there is often opportunity

These decisions can adversely affect performance

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What Should I Do Now?

Your financial professional can help you with:

• Formulating an investment strategy

• Determining the proper asset allocation based on your individual circumstances

• Selecting the proper investments based on your individual circumstances

• Navigating volatile markets

Asset allocation does not guarantee a profit or protect against loss in declining markets.

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Weather Mkt Storms