1. The Third Quarter in Review2
The Third Quarter in Review
According to Transamerica Investment Management, LLC, the U.S. equity markets sustained a decidedly upward trend during the third quarter. The rebound off of March lows continued as various indicators pointed toward the strong possibility that the extended recession may have ended in June. Further, the loosening of credit markets afforded businesses better access to funding for new projects and rebuilding inventories.
During the quarter, consumer confidence improved as the housing market showed additional signs of stabilization. Home prices modestly increased, and new-home sales rose slightly. Job losses slowed, unemployment claims declined month after month. Industrial production registered very modest improvements and corporate earnings estimates were revised upward. Market gains were strongest amongst market segments hit hardest during the downturn.
The statements above reflect opinions, estimates, and projections of Transamerica Investment Management, LLC and are subject to change without notice.
This was an overview of the economy in general. Let’s move on and see how the market did in the third quarter.
Source:
Transamerica Investment Management, LLC “Market Review and Outlook – 3rd Quarter, 2009.”
© 2009 Transamerica Corporation. All rights reserved.
FOR EDUCATIONAL USE ONLY 1

2. Third Quarter Results As of September 30, 2009
Bond Market 3.74%
Stock Market 15.61%
During the third quarter, the Barclays Capital Aggregate Bond Index increased by 3.74% and the S&P 500 Index increased by 15.61%.
According to Diversified Investment Advisors, during July, the Dow Jones Industrial Average gained 8.6%, surpassing the 9,000 mark on July 23rd or the first time since January 6th. Similarly, the S&P 500 Index increased 7.4%, while the technology-heavy Nasdaq Composite Index increased 7.8% for July. From a global perspective, gains were also widespread for the month. The third quarter ended with the Dow up 15%, its best quarterly gain since The S&P 500 was also up 15%, while the Nasdaq Composite rose 16%.
It is important to keep in mind that an investment cannot be made directly in an index. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. Past performance is not a guarantee of future results.
The Bond Market percentage is based on the “Barclays Capital Aggregate Bond Index.” The Stock Market percentage is based on the “S&P 500 Index.” Please see slide 7 for additional disclosures.
Stock Market Indices’ results obtained from Diversified Investment Advisors, “Market Review – July , Market Commentary – Third Quarter 2009, and Update–Headlines for the week ending October 2, 2009.” 2
© 2009 Transamerica Corporation. All rights reserved. 2

3. Annual Stock Market Returns
vs.
10 and 50-Year Averages
10-year stock average
is approximately 6%
In the late 1990s and for several of the years before 2008, stocks experienced remarkable returns of 10% to 30%, but we were warned that these returns were not sustainable. Based on historical cycles and returns, markets over the long-term, tend to revert to the average returns. Throughout the third quarter, the markets continue to rebound. There is optimism that the recession may be over.
It is important to keep in mind that an investment cannot be made directly in an index. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. Past performance is not a guarantee of future results.
Source: Morningstar, Inc. 50-year average is 9.2%, not the 20% to the 30% returns we experienced in the late 90s, nor the negative returns we experienced the years prior to 2003, towards the end of 2007, and throughout Please see slide 7 for additional disclosures. 3
© 2009 Transamerica Corporation. All rights reserved. 3

4. Stock Index Returns As of September 30, 2009 4
Throughout the third quarter, the stock index returns remained in positive territory.
This chart shows the returns of some of the major U.S. equity indices for the third quarter of Value stocks, as measured by the Russell 1000® Value Index, increased by 18.24% while Growth stocks, as measured by the Russell 1000® Growth Index, increased by 13.97%. The Russell 1000® Index (indicative of Blend-Value and Growth large-cap performance) increased by 16.07%, and the Russell 2000® Index (small-cap performance) increased by 19.28%.
It is important to keep in mind that an investment cannot be made directly in an index. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. Past performance is not a guarantee of future results.
Source: Morningstar, Inc. Data as of September 30, Please see slide 8 for additional disclosures. 4
© 2009 Transamerica Corporation. All rights reserved. 4

5. Bond Index Returns As of September 30, 2009 More Aggressive
More Conservative
More Aggressive
It should be noted that although bonds offer a coupon rate, the returns today are influenced mostly by negative price changes caused by declining expectations of future economic activity; and therefore, higher required risk premiums.
This chart shows the returns of some of the major bond indices. 3-Month Treasuries, as measured by the Citigroup 3-Month Treasury Bill Index, increased by 0.04%. Short-term Government Bonds, as measured by the Merrill Lynch 1-3 Year Treasury Index, increased by 0.78%. Intermediate Government Bonds, as measured by the Barclays Capital Intermediate Government Bond Index, increased by 1.63% for the quarter. The Barclays Capital Aggregate Bond Index, increased by 3.74%. High Yield Bonds, as measured by the Credit Suisse First Boston Global High Yield Index, increased by 14.11%.
It is important to keep in mind that an investment cannot be made directly in an index. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. Past performance is not a guarantee of future results.
Source: Morningstar, Inc. Data as of September 30, Please see slide 8 for additional disclosures. 5 5

6. Outlook: Stock Market Returns Interest Rates Expectation for Investors
– Positive returns anticipated
Interest Rates
– Likely to remain low
Expectation for Investors
– Investors are expected to return to
equity markets
According to Transamerica Investment Management, LLC, the stock market still has room to run. Continued government pump-priming and low interest rates are driving improvements in corporate earnings. This, in turn, is setting the stage for a reversal in employment trends and generally giving a boost to consumer confidence.
Interest rates are likely to remain low, since inflation is, and is likely to remain, constrained for the near to intermediate term. Constraints on inflation include retailers, which are discounting prices to entice cautious consumers back to the market, and capacity utilization, which stands at multi-decade lows and could rise markedly before creating scarcity issue that put upward pressures on prices. Transamerica Investment Management, LLC expects that, even if inflation were to rise, the Federal Reserve – out of fear of creating a “double-dip” recession – would delay implementation of any tightening policy until there are definitive signs of sustainable economic growth and a stabilizing labor market.
Investors will return to the equity markets in growing numbers during the coming months, albeit without completely shedding their risk aversion. We anticipate that, consistent with lingering caution, they will initially seek quality investments that may produce positive long-term results. Thus, we look for low-quality stocks to yield market leadership to higher-quality equities in coming months.
The statements above reflect opinions, estimates, and projections of Transamerica Investment Management, LLC and are subject to change without notice.
Source:
Transamerica Investment Management, LLC
“Market Review and Outlook – 3rd Quarter, 2009.” 6
© 2009 Transamerica Corporation. All rights reserved. 6

7. Disclosures 7 Speaker Note: Read all the disclosures. 7
Transamerica Retirement Services and its representatives cannot give investment, ERISA, tax, or legal advice. This material is provided for informational purposes only based on our understanding of material provided and should not be construed as ERISA, tax, or legal advice. Clients and other interested parties must consult and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here. Although care has been taken in preparing this material and presenting it accurately, Transamerica Retirement Services disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it.
Transamerica Financial Life Insurance Company and Transamerica Life Insurance Company are affiliates of Diversified Investors Securities Corp.
Slide 2
Source: Morningstar, Inc. Data as of September 30, The Barclays Capital Aggregate Bond Index is comprised of securities from Barclays Capital Government/Corporate Bond Index, Mortgage-Backed Securities Index, and the Asset-Backed Securities Index. Standard & Poor’s S&P 500 stock market index is comprised of 500 leading companies in leading industries of the U.S. economy. Transamerica Retirement Services is not affiliated with Barclays Capital or Standard & Poor’s.
One cannot invest directly in an index. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. Past performance is not a guarantee of future performance.
Slide 3
Source: Morningstar, Inc. The annual stock market returns shown are represented by the S&P 500 Index and are for the 10-year period from March March Standard & Poor’s S&P 500 stock market index is comprised of 500 leading companies in leading industries of the U.S. economy. Transamerica Retirement Services is not affiliated with Standard & Poor’s or Morningstar, Inc.
Source: Standard & Poor’s, Surviving a Bear Market, The long-term performance quoted for stocks is based on the 50-year average annual return of the S&P 500 Index from Transamerica Retirement Services is not affiliated with Standard & Poor’s.
Speaker Note: Read all the disclosures. 7 7

8. Disclosures 8 Speaker Note: Read all the disclosures. 8 Slide 4
Source: Morningstar, Inc. Data as of September 30, The indices used to represent each investment style are as follows: Value – Russell 1000® Value Index; Growth – Russell 1000® Growth Index; Large-cap – Russell 1000® Index; and Small-cap – Russell 2000® Index. Russell Investments’ Russell 1000® Value Index is comprised of the 500 most value-oriented stock companies in the Russell 1000® Index, Russell 1000® Growth Index is comprised of the 500 most growth-oriented stock companies in the Russell 1000® Index, Russell 1000® Index is comprised of the largest 1,000 stock companies in the Russell 3000® Index, and Russell 2000® Index is comprised of 2,000 small company stocks. Transamerica Retirement Services is not affiliated with Russell Investments.
Slide 5
Source: Morningstar, Inc. Data as of September 30, The indices used to represent each investment style are as follows: 3-Month Treasury – Citigroup 3-Month Treasury Bill Index; Short-term Government Bond – Merrill Lynch 1-3 Year Treasury Index; Intermediate Government Bond – Barclays Capital Intermediate Government Bond Index; Investment Grade Bond – Barclays Capital Aggregate Bond Index; and High Yield Bond – Credit Suisse First Boston Global High Yield Index. The Citigroup 3-Month U.S. Treasury Bill Index is comprised of U.S. Treasury bills with a remaining maturity of three months. The Merrill Lynch 1-3 Year Treasury Index is comprised of Treasury notes and bonds with maturities of 1-3 years. The Barclays Capital Intermediate Government Bond Index is comprised of all bonds covered by the Barclays Capital Government Bond Index with maturities between one and 9.99 years. The Credit Suisse First Boston Global High Yield Index is comprised of issues rated BB and below by S&P or Moody’s with par amounts greater than $75 million. Transamerica Retirement Services is not affiliated with Citigroup, Merrill Lynch, Barclays Capital, or Credit Suisse First Boston.
One cannot invest directly in an index. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. Past performance is not a guarantee of future performance.
Speaker Note: Read all the disclosures. 8
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