Presentation is loading. Please wait.

Presentation is loading. Please wait.

ING1 Asset Allocation Strategies for a Well Balanced Investor C09-0420-044 (05/09) Presenter Name Registered Representative Date.

Similar presentations


Presentation on theme: "ING1 Asset Allocation Strategies for a Well Balanced Investor C09-0420-044 (05/09) Presenter Name Registered Representative Date."— Presentation transcript:

1 ING1 Asset Allocation Strategies for a Well Balanced Investor C (05/09) Presenter Name Registered Representative Date

2 ING2 Insurance products, annuities and retirement plan funding issued by (third party administrative services may also be provided by) ING Life Insurance and Annuity Company ( Windsor, CT). Securities are distributed by ING Financial Advisers, LLC (member SIPC), Windsor, CT or through other broker/dealers with which it has selling agreements. Annuities may also be issued by ReliaStar Life Insurance Company (Minneapolis, MN) and ReliaStar Life Insurance Company of New York (Woodbury, NY). Variable annuities issued by ReliaStar Life Insurance Company are distributed by ING Financial Advisers, LLC. Variable annuities issued by ING USA Annuity and Life Insurance Company and ReliaStar Life Insurance Company of New York are distributed by Directed Service, LLC. Only ING Life Insurance Annuity Company and ReliaStar Life Insurance Company of New York are admitted and issue products in the state of New York. All companies are members of the ING Family of companies. © 2009 ING North America Insurance Corporation. Important Information

3 ING3 Insurance products, annuities and retirement plan funding issued by (third party administrative services may also be provided by) ING Life Insurance and Annuity Company ( Windsor, CT). Securities are distributed by ING Financial Advisers, LLC (member SIPC), Windsor, CT or through other broker/dealers with which it has selling agreements. Annuities may also be issued by ING USA Annuity and Life Insurance Company (Des Moines, IA) and are distributed by Directed Services, LLC. All companies are members of the ING Family of companies. © 2009 ING North America Insurance Corporation. Important Information

4 ING4 Securities and [financial planning] offered through ING Financial Advisers, LLC (member SIPC), One Orange Way, Windsor, CT, © 2009 ING North America Insurance Corporation. Important Information

5 ING5 Recordkeeping and Plan administrative services provided by ING Institutional Plan Services, LLC. © 2009 ING North America Insurance Corporation. Important Information

6 ING6 Framewor(k) and (k)Choice Recordkeeping and Plan administrative services provided by ING Institutional Plan Services, LLC. Mutual funds offered through ING Financial Advisers, LLC (member SIPC). © 2009 ING North America Insurance Corporation. Important Information

7 ING7 Variable annuities, group annuities or funding agreements are long-term investments designed for retirement purposes. If withdrawals are taken prior to age 59 1/2, an IRA 10% premature distribution penalty tax may apply. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you. Variable investments, of any kind, are not guaranteed and are subject to investment risk including the possible loss of principal. The investment return and principal value of the security will fluctuate so that when redeemed, it may be worth more of less than the original investment. In addition, there is no guarantee that any variable investment option will meet its stated objective. For 403(b)(1) annuities, the Internal Revenue Code (IRC) generally prohibits withdrawals of 403(b) salary reduction contributions and earnings on such contributions prior to death, disability and age 50 ½, severance of employment, or financial hardship. Amounts held in a 403(b)(1) annuity as of 12/31/1988 are grandfathered and are not subject to these restrictions. For 403(b)(7) custodial accounts, the IRC generally prohibits withdrawals of any contributions and attributable earnings prior to death, disability, age 59 ½, severance of employment, or financial hardship. For both 403(b)(1) annuities and 403(b)(7) custodial accounts, the amount available for hardship is limited to the lesser of the amount necessary to relieve the hardship, or the account value as of 12/31/1988, plus the amount of any salary reduction contributions made after 12/31/1988 (exclusive of any earnings). You should consider the investment objectives, risk, and charges and expenses of the investment options carefully before investing. Fund prospectuses contain this and other information and can be obtained by contacting your local ING representative. Please read carefully before investing. Important Information (continued)

8 ING8 Variable annuities, group annuities or funding agreements are long-term investments designed for retirement purposes. If withdrawals are taken prior to age 59 1/2, an IRA 10% premature distribution penalty tax may apply. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you. Variable investments, of any kind, are not guaranteed and are subject to investment risk including the possible loss of principal. The investment return and principal value of the security will fluctuate so that when redeemed, it may be worth more of less than the original investment. In addition, there is no guarantee that any variable investment option will meet its stated objective. For 403(b)(1) annuities, the Internal Revenue Code (IRC) generally prohibits withdrawals of 403(b) salary reduction contributions and earnings on such contributions prior to death, disability and age 50 ½, severance of employment, or financial hardship. Amounts held in a 403(b)(1) annuity as of 12/31/1988 are grandfathered and are not subject to these restrictions. For 403(b)(7) custodial accounts, the IRC generally prohibits withdrawals of any contributions and attributable earnings prior to death, disability, age 59 ½, severance of employment, or financial hardship. For both 403(b)(1) annuities and 403(b)(7) custodial accounts, the amount available for hardship is limited to the lesser of the amount necessary to relieve the hardship, or the account value as of 12/31/1988, plus the amount of any salary reduction contributions made after 12/31/1988 (exclusive of any earnings). All Guarantees are based on the financial strength and claims-paying ability of the issuing insurance company, who is solely responsible for all obligations under its policies. You should consider the investment objectives, risk, and charges and expenses of the investment options carefully before investing. Fund prospectuses contain this and other information and can be obtained by contacting your local ING representative. Please read carefully before investing. Important Information (continued)

9 ING9 Important Information (continued) You should consider the investment objectives, risk, and charges and expenses of the investment options carefully before investing. Fund prospectuses contain this and other information and can be obtained by contacting your local ING representative. Please read carefully before investing.

10 ING10 This presentation/seminar contains information regarding insurance products for sale. Important Information (continued)

11 ING11 to life planning about financial realities that take the whole picture into account The ING difference…

12 ING12 Diversify: Invest across asset classes. Risk: Manage performance. Review: Reassess your plan every year. Using diversification/asset allocation as part of your investment strategy neither assures nor guarantees better performance and cannot protect against a loss in declining markets Three Steps to Stay on Target

13 ING13 Review your asset allocation plan over time. 20s30s-40s40s-50s60s+

14 ING14 Key Concerns: Questions to Ask: Investment Tips: Paying college loans Meeting living expenses Starting an investment plan What are my goals? How much risk can I take with my money? Establish an emergency savings account Contribute maximum amount to tax-deferred retirement plan Set up mutual fund, broker- age or savings account In Your 20s

15 ING15 Key Concerns: Questions to Ask: Investment Tips: Buying a home Supporting family needs Saving for a vacation or kids college education What are my goals? How much risk can I take with my money? Split savings into long- and short-term goals Think equities for long-term; more liquid options for short-term In Your 30s & 40s

16 ING16 Key Concerns: Questions to Ask: Investment Tips: Paying childs college costs Meeting living expenses Funding retirement plan What are my goals? How much risk can I take with my money? When do I plan to retire? Save more money for long-term through: - employer qualified plan - mutual funds - brokerage accounts - CDs and bonds In Your 40s & 50s

17 ING17 Key Concerns: Questions to Ask: Investment Tips: Your financial security Adequate health care Legacy to your heirs What are my goals? How much risk can I take with my money? When do I plan to retire? Am I financially prepared to retire? Shift portfolio to produce more income with less risk Rollover retirement payouts to preserve tax-deferral In Your 60s & Beyond

18 ING18 Lets look at three key asset classes. Equities Fixed income securities Cash equivalents

19 ING19 low level of interest paid in return for short-term loan to a financial institution, corporation or government Cash Equivalents minimal fluctuation of principal relatively short maturities, high liquidity suitable for protecting assets, not growing them

20 ING20 involve loaning money to an entity on intermediate- or long-term basis usually greater interest paid, given length of loan potential fluctuation of principal if sold before maturity lower volatility than equities, example: bonds if held to maturity, offer a fixed rate of return and fixed principal value Fixed Income Securities / Bonds Principal value of a bond will vary inversely to the rise and decline of interest rates.

21 ING21 involve owning part or all of an asset or company Equities / Stocks no promise to repay original investment share of distributed profit, if any potential gain or loss of asset value example: stocks suitable for growing assets

22 ING22 20% Stocks 50% Bonds 30% Cash Equivalents Conservative Portfolio 50% Stocks 40% Bonds 10% Cash Equivalents Balanced Portfolio 70% Stocks 25% Bonds 5% Cash Equivalents Growth Portfolio 85% Stocks 15% Bonds Aggressive Growth Portfolio Sample Portfolio Allocations For illustrative purposes only. This example may not reflect your actual situation. May not be taken as investment advice.

23 ING23 The Tradeoff Between Risk and Return While specific investments may differ, this chart generally reflects the risk/return of types of investments. Risk LowerHigher Potential return Lower Higher StocksBondsCash equivalents Stocks Bonds Cash Equivalents Low risk/ low potential return Moderate risk/ moderate potential return High risk/ high potential return

24 ING24 Stocks and Bonds: Risk Versus Return 1970–2008 Past performance is no guarantee of future results. Risk and return are measured by standard deviation and arithmetic mean, respectively. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2009 Morningstar, Inc. All rights reserved. 3/1/ % Return Maximum risk portfolio: 100% Stocks 60% Stocks, 40% Bonds 50% Stocks, 50% Bonds 100% Bonds Minimum risk portfolio: 25% Stocks, 75% Bonds % Risk 80% Stocks, 20% Bonds Understand your comfort with risk and return.

25 ING25 The Challenge of Retirement Investing Staying in the Market: Its Time, Not Timing Past performance is no guarantee of future results. Performance shown is historical and not indicative of any ING Funds fund performance and does not account for fees and expenses associated with investing in funds. Investors cannot invest directly in an index. Investor refers to the universe of all mutual fund investors whose actions and financial results are restated to represent a single investor. Source: Dalbar, Inc., Quantitative Analysis of Investor Behavior – 2009 Update for investors and Morningstar, Inc. for investments; S&P 500 Index and Barclays Capital Aggregate Bond Index. For Financial Professional and Sponsor Use Only

26 ING26 Which is better? Only time can tell.

27 ING27 Which is better? Only time can tell. The S&P 500 ® Index is a readily available, carefully constructed, market-value-weighted benchmark of common stock performance. Market- value-weighted means that the weight of each stock in the index, for a given month, is proportionate to its market capitalization (price times the number of shares outstanding) at the beginning of that month. Currently, the S&P ® Composite includes 500 of the largest stocks (in terms of stock market value) in the United States; prior to March 1957 it consisted of 90 of the largest stocks. IA SBBI US LT Govt TR: The total returns from 1977-present are constructed with data from The Wall Street Journal. The data from are obtained from the Government Bond File at the Center for Research in Security Prices (CRSP) at the University of Chicago Graduate School of Business. To the greatest extent possible, a one bond portfolio with a term of approximately 20 years and a reasonably current coupon-whose returns did not reflect potential tax benefits, impaired negotiability, or special redemption or call privileges-was used each year. Where "flower" bonds (tenderable to the Treasury at par in payment of estate taxes) had to be used, the term of the bond was assumed to be a simple average of the maturity and the first call dates minus the current date. The bond was "held" for the calendar year and returns were computed. IA SBBI US Small Stock: 2001-present: The Small Company Stock return series is the total return achieved by the Dimensional Fund Advisors (DFA) Small Company 9/10 (for ninth and tenth deciles) Fund. The Fund invests in a broadly diversified cross section of small companies. DFAs portfolio construction includes stock selection that is based on market capitalization and eligibility criteria. DFAs proprietary database includes more than 9,000 securities. Data is analyzed from a variety of sources that include industry publications, research reports as well as a number of electronic data services. The U.S Small Company Strategy target universe includes those companies that have a market capitalization in the lowest 4 percent of the market universe. The market universe is defined as the aggregate of the NYSE, AMEX and NASDAQ NMS firms. As of 6/30/01, companies with a market capitalization of approximately $620 million or less are eligible for purchase in the strategy. Market capitalization is calculated as price times shares outstanding. In addition to market capitalization requirements, DFAs Investment Committee has imposed additional criteria to enhance the value of the portfolio to shareholders. There are currently over 20 quality criteria that would eliminate a company from the portfolio. These criteria include eliminating: · ADRs or foreign stocks · REITS, Limited Partnerships, or closed end funds · Companies with qualified financial statements · Recent IPOs · Companies with less than 3 years of history · OTC companies with less than 4 market makers

28 ING28 Which is better? Only time can tell. Disclosure continued: Satisfying market capitalization requirements is the first step in determining security selection. DFA generally holds capitalization-weighted positions of all eligible securities. Sector/industry diversification occurs as a residual of the security selection process. Portfolios are fully invested; Dimensional keeps cash levels below 5%, and generally under 2%. On a quarterly basis, DFA examines the market capitalization ranking of eligible stocks to determine which issues are eligible for purchase or sale. Size ranges are based upon the aggregate capitalization of the market universe- NYSE, AMEX and NASDAQ NMS firms. A hold or buffer range is created for issues that migrate above the buy range. Issues that migrate above the hold range are sold and proceeds invested into the portfolio. On a regular basis, DFA reviews the portfolio's holdings to determine which issues are sell candidates. Sell candidates are determined based on market capitalization. Stocks become eligible for sale when they migrate above the 5th percentile of the market universe, which is $778 million as of 6/30/01. Portfolio turnover averages 20-25% annually : The Small Company Stock return series is the total return achieved by the Dimensional Fund Advisors (DFA) Small Company 9/10 (for ninth and tenth deciles) Fund. The fund is a market-value weighted index of the ninth and tenth deciles of the NYSE, plus stocks listed on the AMEX and OTC with the same or less capitalization as the upper bound of the NYSE ninth decile. Stocks are not purchased if their market capitalization is smaller than $10 million (although they are held if they fall below that level). A company's stock is not purchased if it is in bankruptcy; however, a stock already held is retained if the company becomes bankrupt. Stocks remain in the portfolio if they rise into the eighth NYSE decile, but they are sold when they rise into the seventh decile or higher. The returns for the Fund represent after-transactions-cost returns. For 1981, Dimensional Fund Advisors, Inc. updated the returns using Professor Banz' methods. The data for 1981 are significant to only three decimal places (in decimal form) : The equities of smaller companies from are represented by the historical series developed by Professor Rolf W. Banz. This is composed of stocks making up the fifth quintile (i.e. the ninth and tenth deciles) of the NYSE. The portfolio was first ranked and formed as of December 31, This portfolio was "held" for five years, with value-weighted portfolio returns calculated monthly. Every five years the portfolio was rebalanced (i.e. all of the stocks on the NYSE were re-ranked, and a new portfolio of those falling in the ninth and tenth deciles was formed) as of December 31, 1930 and every five years thereafter through December 31, This method avoided survivorship bias by including the return after the delisting or failure of a stock in constructing the portfolio returns. IA SBBI US 30 Day TBill: Monthly Bureau of the Public Debt, Department of the Treasury. Data obtained from the following: Aug present: Monthly Statement of the Public Debt of the United States. Market values are equal to the amount outstanding of marketable, interest- bearing public debt. Index values are expressed in billions of dollars. May 1961-July 1974: Treasury Bulletin. IA SBBI US Inflation: The Consumer Price Index for All Urban Consumers (CPI-U), not seasonally adjusted, is used to measure inflation, which is the rate of change of consumer goods prices. Unfortunately, the inflation rate as derived by the CPI is not measured over the same period as the other asset returns. All of the security returns are measured from one month-end to the next month-end. CPI commodity prices are collected during the month. Thus, measured inflation rates lag the other series by about one-half month. Prior to January 1978, the CPI (as compared with CPI-U), not seasonally adjusted, was used. For the period 1978 through 1987, the index uses the year 1967 in determining the items comprising the basket of goods. Following 1987, a three-year period, 1982 through 1984, was used to determine the items making up the basket of goods.

29 ING29 These unmanaged indexes are not intended to represent specific mutual funds. Investors cannot invest directly in an index. Individual results may vary to management fees, transaction costs and taxes. Performance figures do not take into account the fees and expenses of investing in mutual funds or variable products. Past performance is no guarantee of future results. Source: Thomson Financial Company For descriptions of these indices, see next page. Follow the leaderif you can Large Stocks Large Stocks Large Stocks Large Stocks Large Stocks Small Stocks Small Stocks Small Stocks Small Stocks Small Stocks Intl Stocks Intl Stocks Intl Stocks Intl Stocks Intl Stocks LT Govt Bonds LT Govt Bonds LT Govt Bonds LT Govt Bonds LT Govt Bonds Large Stocks 30 Day T-Bills 30 Day T-Bills 30 Day T-Bills 30 Day T-Bills LT Govt Bonds Small Stocks LT Govt Bonds 30 Day T-Bills Small Stocks Large Stocks Intl Stocks HIGHEST RETURN LOWEST RETURN

30 ING30 Past performance is no guarantee of future results. The indices past performance is historical and is provided to illustrate market trends. Such performance does not represent the performance of any specific fund. Indices are not actively managed and investors cannot invest directly in the indices. Index performance does not reflect any management fees or expenses associated with investing in mutual funds. About Our Leaders and Laggards Barclays Capital U.S. Government Bond Index: The Barclays Capital U.S. Government Bond Index is an index of government and government agency bonds. Morgan Stanley Capital International: Europe, Australia and Far East (MSCI EAFE®) Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the US & Canada. As of December 2003 the MSCI EAFE Index consisted of the following 21 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom. EAFE is a registered service mark of Morgan Stanley Dean Witter, Discover & Co Russell 2000® Index is an equity index representing 2,000 of the smallest companies within the larger Russell 3000® Index. Often looked at as one benchmark for small stock investors. Russell 2000 is a registered service mark of Frank Russell Company. Standard & Poor's 500® Index (S&P 500®) is comprised of 500 stocks representing major U.S. industrial sectors. Performance figures are inclusive of dividends reinvested. S&P 500 is a registered service mark of The McGraw-Hill Companies, Inc. "Standard & Poor's 500" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by ING Life Insurance and Annuity Company. This product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of purchasing this product. The S&P 500 Index does not reflect dividends paid on the underlying stock. Government bonds are presented by the 20-year U.S. government bond, Treasury bills by the 30-day U.S. Treasury bill.

31 ING31 Factors that explain variation between portfolio performances 4.6% Security selection 91.5% Asset allocation 1.8% Other factors 2.1% Market timing So, whats a person to do? Brinson Study. Determinants of Portfolio Performance. Financial Analyst Journal May-June Past performance is no guarantee of future results. Using an asset allocation approach does not assure or guarantee better performance.

32 ING32 Consider different: Parts of the world Diversify your assets. Industries Issuers and maturities Sizes of companies Asset classes

33 ING33 Portfolio grows and allocation shifts with time Reallocation back to original For illustrative purposes only. This example may not reflect your actual situation. Attention: Contents can shift over time. Original allocation Portfolio rebalancing

34 ING34 Take stock at each stage of your life. What are my goals? Whats my tolerance for risk? When do I plan to retire? Will I be financially prepared for retirement? Ask yourself:

35 ING35 Be a well-balanced investor. Risk: Manage performance. Review: Reassess your plan every year. Diversify: Invest across asset classes.

36 ING36 Whats next? Time to take action. Read up on the topic. See your benefits manager. Check the Internet. Consult a professional.

37 ING37


Download ppt "ING1 Asset Allocation Strategies for a Well Balanced Investor C09-0420-044 (05/09) Presenter Name Registered Representative Date."

Similar presentations


Ads by Google