1. Presented by StanCorp Equities, Inc., member FINRA

2. Presented by…
[Presenter’s name]
[Presenter’s title]

3. Step-by-step investing for tomorrow
This workshop is about:
Understanding your investment options
Understanding the risk/return relationship
Learning how diversification can help manage risk
Discovering your investing style
Choosing an appropriate investment mix
Managing Risk

4. Investment categories: The key to understanding investment options.
Your plan may have a dozen or more investment choices, but for the most part, they all fall into one or more of the following categories:
Cash equivalents
Bonds
Stocks
Managing Risk

5. Cash equivalents Cash equivalents Investment category
Description
Includes money market or stable value
Designed to maintain value that does not fluctuate
How investors can make money
Interest income and return of invested principal
How investors can lose money
Issuer defaults or returns only a portion of the amount invested
Managing Risk

6. Bonds Bonds Investment category Description
Companies, the government, etc. issue bonds to raise money. Purchasing a bond = lending your money to the bond issuer for a certain period
How investors can make money
Interest paid to investors
Sell bond before maturity for more than purchase price
How investors can lose money
Sell bond before maturity for less than purchase price. Bond issuer has financial problems; can’t repay debt. As interest rates rise, the prices of bonds fall
Managing Risk

7. Stocks Stocks Investment category Description
Shares of stock (equities) = part ownership of the company
Companies sell their stock to investors to raise money
How investors can make money
Sell shares for more than your purchase price
Regular dividends from company earnings and profit
How investors can lose money
Sell shares for less than your purchase price
If company goes bankrupt, you could lose entire amount invested
Managing Risk

8. Investment options
Investment options, such as S&P 500 Index funds, are investment pools in which a large number of investors combine their money to purchase securities with a:
Shared investment portfolio
Common investment strategy
Sector focus (in some options, such as health care, real estate, etc.)
Focus on company size (in some options)
Managing Risk

9. Understanding Risk Bonds: Stocks: Cash equivalents:
low risk and returns
Bonds:
moderate potential return and less
risk of principal loss than stocks
Stocks:
highest potential return – and the
most risk to principal (the amount
invested)
Managing Risk

10. The risk/return relationship
Potential Risk
Cash equivalents
Bonds
Stocks
Potential Return
Managing Risk

11. Diversification by investment category
By spreading your money across different investment
categories (asset classes), you balance risk because
Stocks may take off, while
Bonds may suffer
Different investments tend to do better in different market conditions.
Diversification does not ensure a profit or protect against a loss in a declining market.
Managing Risk

12. Diversification: the key to managing risk
Most investment funds are automatically diversified among a number of individual securities.
Some securities may perform more poorly than expected
Some securities may perform better than expected
Losses may be offset by gains
Diversification does not ensure a profit or protect against a loss in a declining market.
Managing Risk

13. Time can help smooth out risk
The index performance shown is for illustrative purposes only and is not indicative of the performance of any specific investment. Illustration assumes $1,000 invested in each category from December 1982 – December S&P 500 Index: A market capitalization-weighted index of 500 widely held stocks. Investing in stocks carries more risk than investing in bonds or cash equivalents. BarCap U.S. Aggregate Bond Index: An index that covers the U.S. investment-grad, fixed-rate bond market, with index components for government and corporate securities, mortgage pass-through securities and asset-backed securities. Bonds are subject to certain risks including interest-rate risk, credit risk and inflation risk. Investing in bonds carries more risk than investing in cash equivalents. 3-Month T-Bill Index: An index based on the results of auctions the U.S. Treasury holds for its Treasury bills, which are short-term government securities. Consumer Price Index: A measure of the average price of consumer goods and services purchased by households. Past performance is no guarantee of future results. Investments are subject to market risk and fluctuate in value. An investment cannot be made directly in an index. Sources: Morningstar Direct, Legg Mason.
Managing Risk

14. Time is on your side
How many years do you have until retirement? 15 years or more – You can afford to take some risks in hopes of a bigger payoff. Five to 15 years – Time can do some of the work for you. You have enough time to take on some risk in search of higher than average returns. Less than five years – A year or two of poor returns may mean you’ll have less money at retirement.
Managing Risk

15. Investor Profile Quiz: Discover your investing style
After each question, circle the letter that best describes you. Then, add up the points and match the total with the pre-mixed portfolios.
Please note that this profiling tool is only a guide.
Managing Risk

16. Asset allocation: choosing your investment mix
You should carefully consider the investment objectives, risks, charges and expenses of the investment options offered under the retirement plan before investing. International investing involves certain risks, such as currency fluctuations, economic instability and political developments. These risks may be accentuated in emerging markets. Small- company (small cap) investing involves specific risks not necessarily encountered in large-company investing, such as increased volatility. Funds that invest in bonds are subject to certain risks, including interest-rate risk, credit risk and inflation risk. As interest rates rise, the prices of bonds fall.
Your plan may be funded by a mutual fund trust or a group annuity contract. Both are suitable for long-term investing, including saving for retirement. While annuities generally provide tax-deferred treatment of earnings, the group annuity contract does not provide any additional tax-deferred treatment beyond the treatment provided by your retirement plan.
Managing Risk

17. Taking the next steps Manage your risk and invest for tomorrow by:
Understanding
• Investment categories and the risks and
potential returns associated with them
• Diversification and how it can help
smooth out risk
• Time and how it can work for you
Taking the Investor Profile Quiz
Choosing an investment mix based on your
investing style
Managing Risk

18. Thank you!

19. Employers and plan participants should carefully consider the investment objectives, risks, charges and expenses of the investment options offered under the retirement plan before investing. The prospectuses for the individual mutual funds and each available investment option in the group annuity contain this and other important information. Prospectuses may be obtained by calling Please read the prospectus carefully before investing. Investments are subject to market risk and fluctuate in value.
The Standard is the marketing name for StanCorp Financial Group, Inc. and its subsidiaries. StanCorp Equities, Inc., member FINRA, wholesales a group annuity contract issued by Standard Insurance Company and a mutual fund trust platform for retirement plans. Third-party administrative services are provided by Standard Retirement Services, Inc. Investment advisory services are provided by StanCorp Investment Advisers, Inc., a registered investment advisor. StanCorp Equities, Inc., Standard Insurance Company, Standard Retirement Services, Inc. and StanCorp Investment Advisers, Inc. are subsidiaries of StanCorp Financial Group, Inc. and all are Oregon corporations.
RP GP-PPT(4/13)