1. Prospering Through Downturns
Shareholders often ask what we at American Funds think will happen to the market.
Even if we had a crystal ball, it would be impossible to predict the future.
Figures are past results and are not predictive of results in future periods. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
MFCPPO s62454
© 2017 American Funds Distributors, Inc.
© American Funds Distributors, Inc.

2. “We do not have, never have had, and never will have an opinion about where the stock market, interest rates, or business activity will be a year from now.”
“We do not have, never have had, and never will have an opinion about where the stock market, interest rates, or business activity will be a year from now.”
That’s not just my opinion; it’s the view of Warren Buffett, the nation’s most famous investor. Mr. Buffett included this statement in his 1988 letter to the shareholders of Berkshire Hathaway.
At American Funds, we don’t know what will happen to the market either. But there are a few things on which we can all agree.
Warren Buffett,
Berkshire Hathaway shareholder letter, 1988
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© American Funds Distributors, Inc.

3. What We Know for Sure © American Funds Distributors, Inc.
That’s what I’d like to talk to you about today: What we know for sure.
I’m going to illustrate for you some things we know for sure, using stories from American Funds’ ICA Guide.
While these stories happen to feature The Investment Company of America (ICA), an 83-year-old growth and income fund, their lessons are meant to illustrate concepts and strategies that address many of the concerns today’s investors may have.
What We Know for Sure
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© American Funds Distributors, Inc.

4. Diversification Can Help Reduce Risk
What We Know for Sure
The first thing we know for sure is that diversification can help reduce risk.
Let’s illustrate this idea with a quick quiz.
Diversification Can Help Reduce Risk
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© American Funds Distributors, Inc.

5. Investing in Stocks Requires Skill
American Express
Apple
Boeing
Caterpillar
Chevron
Cisco Systems
Coca-Cola
Disney
DuPont
ExxonMobil
General Electric
Goldman Sachs Group
Home Depot
IBM
Intel
Johnson & Johnson
JPMorgan Chase
McDonald’s
Merck
Microsoft
Nike
Pfizer
Procter & Gamble 3M
Travelers Companies
United Technologies
UnitedHealth Group
Verizon Communications
Visa
Walmart
Here are the 30 stocks of the Dow Jones Industrial Average today. These are companies that you’ve all heard of.
Let’s turn back the clock and pretend that in 1934 you could have invested $1,000 apiece in any five of the stocks in the index.
Keep in mind that the composition of the Dow has changed over time. For this comparison, we’re assuming that when one company in the index was replaced by another, proceeds from the sale of shares in the original company were invested in the new company.
As you look at this list, I’d like you to write down the five stocks you think would have been the best investments over the past 83 years.
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

6. Investing in Stocks Requires Skill
American Express
Apple
Boeing
Caterpillar
Chevron
Cisco Systems
Coca-Cola
Disney
DuPont
ExxonMobil
General Electric
Goldman Sachs Group
Home Depot
IBM
Intel
Johnson & Johnson
JPMorgan Chase
McDonald’s
Merck
Microsoft
Nike
Pfizer
Procter & Gamble 3M
Travelers Companies
United Technologies
UnitedHealth Group
Verizon Communications
Visa
Walmart
These are the five stocks that represented the highest returns on the $1,000 investment in each company from 1934 to 2016.
Procter & Gamble
General Electric
ExxonMobil
Coca-Cola
Home Depot
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© American Funds Distributors, Inc.

7. Investing in Stocks Requires Skill
$1,000 investment, 1/1/34 –12/31/16
Figures shown are past results for Class A shares with all dividends reinvested and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. Fund results reflect deduction of the maximum sales charge (5.75%). For current information and month-end results, visit americanfunds.com/advisor.
ICA $1,100,426
Procter & Gamble 834,700
General Electric 466,707
ExxonMobil 449,399
Coca-Cola 243,204
Home Depot 224,084
Here are the results for those stocks based on a hypothetical $1,000 investment 83 years ago.
When you look at the returns, you see that not one of the Dow’s stocks would have outpaced an investment in ICA, even though some of the other companies may have done better than ICA at various points during their lifetimes.
Keep in mind that the process of replacing one Dow stock can often mean selling low (when a stock is being removed from the index) and buying high (when a new stock is added to the index).
Investment management can make a meaningful difference over time.
ICA's investment professionals draw on long experience and in-depth research for the fund's portfolio of holdings.
With ICA’s diversified portfolio, your $1,000 investment would have grown to $1.1 million, as of December 31, 2016.
Remember, you invested a total of $5,000, $1,000 in each of the five stocks. Had you invested an equivalent $5,000 in ICA, it would have handily outpaced any five stocks you chose over the same period.
And, in selecting the five stocks, you were precluded from changing your investments over the years. This example illustrates the benefit of The Capital Advantage.
Dividends taken in cash. It was assumed that the entire $1,000 was invested in each stock and that fractional shares were purchased where required to use up the full amount. No brokerage charges were included in the cost. Adjustments were made for all stock splits, stock dividends and spinoffs.
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

8. Successful Investors Look Beyond Short-Term Fluctuations
What We Know for Sure
So, we know that diversification can reduce risk. What else do we know for sure? Well, we know that successful investors look beyond short-term fluctuations.
Successful Investors Look Beyond Short-Term Fluctuations
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

9. There Have Always Been Reasons Not to Invest
Throughout ICA’s 83 years, there have been events that could have caused investors not to invest.
Many investors may be tempted to base investment decisions on emotion — especially when events like the war in Iraq occur. But, historically, ICA has given its shareholders good reason to look beyond the day’s headlines.
Let’s look at a few examples.
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© American Funds Distributors, Inc.

10. There Have Always Been Reasons Not to Invest
The Investment Company of America
Figures are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/advisor. Fund results are for Class A shares and reflect deduction of the maximum sales charge (5.75%).
Ending value 12/31/16
$10,000 invested on:
Here’s what would have happened if you had made a hypothetical $10,000 investment in ICA on the day that:
President Nixon resigned (August 9, 1974).
By the end of 2016, you would have had $1,259,599.
The Dow Jones Industrial Average dropped a record 22.6% in one day, known as Black Monday (October 19, 1987).
By the end of 2016, you would have had $174,423.
Iraqi troops invaded Kuwait, setting off the first Gulf War (August 2, 1990).
By the end of 2016, you would have had $111,241.
Terrorists attacked the World Trade Center (September 11, 2001).
By the end of 2016, you would have had $26,798.
(Results assume payment of the maximum 5.75% sales charge for Class A shares, with all distributions reinvested.)
8/9/74 – President Nixon resigned $1,259,599
10/19/87 – Dow declined 22.6% 174,423
8/2/90 – Gulf War started 111,241
9/11/01 – September ,798
Source: Thomson Reuters. Results are calculated by Thomson Reuters. Results with all distributions reinvested.
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

11. When Investing, Time Is More Important Than Timing
What We Know for Sure
I think we can also agree that, in the world of investing, time is more important than timing.
Here’s a familiar story to illustrate that point.
When Investing, Time Is More Important Than Timing
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

12. Think you have bad timing?
Meet Louie the Loser
Do you worry about bad timing when it comes to investing?
Do you wish you had a crystal ball so you would know the best time to invest?
Let me introduce Louie the Loser.
Louie canceled his dental insurance the day before his root canal flared up. His vacation in the desert was rained out. Louie couldn’t have worse timing.
So, why does he look so happy? Let’s find out.
Twenty years ago, Louie decided he should do some investing — $10,000 every year.
Of course, regular investing does not ensure a profit or protect against loss in a declining market.
Considering the type of guy he is, it’s no surprise that each year, when he told his financial adviser to invest $10,000 in The Investment Company of America (ICA), it was on the very day the stock market hit its highest point that year. In other words, it was the worst day he could have picked because on all the other days that year, the market was lower.
By the way, when I say “the market,” I’m referring to the Dow Jones Industrial Average, an unmanaged index comprising a price-weighted average of 30 actively traded industrial and service-oriented blue chip stocks.
Twenty years of investing on the worst possible day. Anyone want to venture a guess as to how Louie did?
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

13. Louie the Loser
As of 12/31/16
Figures are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/advisor. Fund results are for Class A shares and reflect deduction of the maximum sales charge (5.75%).
$10,000 a year, starting in 1997:
Worst-day investments (market highs)
It may be hard to believe, but despite an almost superhuman knack for picking the worst day — the day the market hit its high — Louie did just fine.
Over 20 years, he invested $200,000, and by December 31, 2016, that had grown to $402,538 — an average annual total return of 6.60%. Not too bad for a guy with a terminal case of bad timing.
Now, if Louie had had perfect timing and invested on the best day each year — the day the market hit its low — he would have done a bit better.
His investment would have grown to $502,680, and he would have seen an average annual total return of 8.41%.
Of course, anyone else investing $10,000 a year in ICA over that same period would most likely have had different timing and results than Louie’s.
However, we can realistically expect that if we invest regularly, while our timing won’t be perfect, it won’t be as bad as Louie’s either.
Best-day investments (market lows)
Account value $402,538
Average annual total return 6.60%
Account value $502,680
Average annual total return 8.41%
Source: Thomson Reuters. Results are calculated by Thomson Reuters. The average annual total returns shown take into account subsequent investments. Market highs and lows based on Dow Jones Industrial Average. Cumulative volume discount applied when appropriate.
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

14. Flat Markets Can Present Opportunities
What We Know for Sure
What else do we know for sure? We also know that flat markets can present opportunities for investors.
Flat Markets Can Present Opportunities
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

15. ICA vs. the S&P 500 Index
A $10,000 investment in a relatively flat market, 12/31/68–12/31/78
Figures are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/advisor. Fund results are for Class A shares and reflect deduction of the maximum sales charge (5.75%).
$20,000
$18,344
ICA with dividends reinvested
$15,176
S&P 500 with dividends reinvested
15,000
While the most recent decline was an exceptionally disappointing one for the market, there have been other, less dramatic declines, as well as periods of little change at all.
But during difficult times, ICA’s professional management has frequently enabled the fund to do better than the market.
The chart on this slide, and the one on the next, show how ICA compared to the S&P 500 during two past market periods that were relatively “flat.”
On this slide:
Standard & Poor’s 500 Index began 1968 with an index value of
More than a decade later, at the end of 1978, it stood at — right back where it had started. But an investor still could have made money.
A hypothetical investment of $10,000 in the S&P 500, with reinvested dividends, would have grown to $15,176.
Meanwhile that $10,000 invested in ICA would have grown to $18,344.
10,000
$9,963
S&P 500 excluding dividends
5,000
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
Sources: S&P 500 Index, Thomson Reuters. Results are calculated by Thomson Reuters. There have been times when the fund has trailed the index.
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

16. ICA vs. the S&P 500 Index
A $10,000 investment in a relatively flat market, 12/31/99–12/31/07
Figures are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/advisor. Fund results are for Class A shares and reflect deduction of the maximum sales charge (5.75%).
$16,000
$14,537
ICA with dividends reinvested
$11,407
S&P 500 with dividends reinvested
12,000
More recently, before the decline, the market had been relatively flat for the previous eight-year period.
Standard & Poor’s 500 Index began the year 2000 with an index value of and ended 2007 with a value of
A hypothetical investment of $10,000 in the S&P 500, with reinvested dividends, would have grown to $11,407.
Meanwhile, a hypothetical $10,000 investment in ICA over the same period would have grown to $14,537.
Of course, past results are not predictive of results in future periods and there have been times when the fund has trailed the index.
[Note to presenter: This presentation focuses on the period from 2000 through The examples and studies quoted deal with this period only. We feel the information from this decade, which contains both bull and bear markets, is still relevant to the investor mentality today.]
8,000
$9,994
S&P 500 excluding dividends
4,000
2000
2001
2002
2003
2004
2005
2006
2007
Sources: S&P 500 Index, Thomson Reuters. Results are calculated by Thomson Reuters. There have been times when the fund has trailed the index.
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

17. What We Know for Sure
We know for sure that, historically, dividends of successful S&P companies have risen over the long term.
Historically, Dividends of Successful S&P Companies Have Risen Over the Long Term
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

18. The Importance of Growing Income
Annual dividends from $100,000 invested in ICA, 1997–2016
Figures are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/advisor. Fund results are for Class A shares and reflect deduction of the 3.50% sales charge applicable to a $100,000 investment.
4,000
$8,000
6,000
2,000
Regular dividends
Special dividends
‘06
‘07
‘08
‘09
‘10
‘11
‘12
‘13
‘14
‘02
‘03
‘04
‘05
‘00
‘01
‘97
‘98
‘99
‘15
‘16
ICA has been true to its objective of providing long-term growth of capital and income by seeking to invest in solid companies with the greatest potential for future dividends.
The fund has paid a dividend every year since 1936, and income from dividends has grown in 68 of the past 79 calendar years (assuming capital gains reinvested and dividends taken in cash, excluding special dividends).
Here are the annual dividends on a hypothetical $100,000 investment in ICA from January 1, 1997, through December 31, 2016.
These results assume dividends were taken in cash.
Special dividends were paid from 1997 to 2000, in 2005 and 2006, and from 2009 to 2014.
Source: Thomson Reuters. Results are calculated by Thomson Reuters. Assumes dividends taken in cash and capital gains reinvested.
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

19. Original investment 1/1/95
Dividends in Cash
The Investment Company of America, 1/1/97–12/31/16
Figures are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/advisor. Fund results are for Class A shares and reflect deduction of the 3.50% sales charge applicable to a $100,000 investment.
137,629
100,000
For this same $100,000 investment in ICA, from January 1, 1997, through December 31, 2016, with dividends taken in cash:
Income from dividends would have totaled $76,431.
The ending value would have been $137,629.
76,431
Original investment 1/1/95
Dividends in cash
Ending value 12/31/16
Source: Thomson Reuters. Results are calculated by Thomson Reuters. Assumes dividends taken in cash and capital gains reinvested.
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

20. What We Know for Sure Diversification can reduce risk
The best investors look beyond short-term fluctuations
When investing, time is more important than timing
Investors can make money in flat markets
Historically, dividends from a portfolio of successful companies have risen over the long term
Now let’s review what we know for sure:
Diversification can reduce risk.
The best investors look beyond short-term fluctuations.
When investing, time is more important than timing.
Investors can make money in flat markets.
Historically, dividends of successful companies have risen over the long term.
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

21. What We Know for Sure
Over the years, the main thing we’ve all learned — and still know for sure — is that selling at the bottom and buying at the top is natural for most people.
Looking at ICA’s history may help you avoid this mistake.
Selling at the Bottom and Buying at the Top Are Natural for Most People
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

22. American Funds Investment Results
Average annual total returns for periods ending 3/31/17
Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For more current information and month-end results, visit americanfunds.com/advisor. Fund results are for Class A shares and reflect deduction of the maximum sales charge (5.75%).
Expense ratio
(Refer to slide.)
1 year
5 years
10 years
The Investment Company of America® % 11.68% 6.23% 0.59%
Results are based on an initial $1,000 investment at the beginning of the stated periods. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The expense ratio is as of the fund’s prospectus available at the time of publication. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Visit americanfunds.com /advisor for more information.
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

23. Prospectus Language
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
(Refer to slide.)
© American Funds Distributors, Inc.
© American Funds Distributors, Inc.

24. For financial professionals only. Not for use with the public.
Index Language
Dow Jones Industrial Average is a price-weighted average of 30 actively traded industrial and service-oriented blue chip stocks.
Standard & Poor's 500 Composite Index is a market capitalization-weighted index based on the results of 500 widely held common stocks.
The S&P 500 Composite Index (“Index”) is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2017 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC.
Market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index.
© American Funds Distributors, Inc.
For financial professionals only. Not for use with the public. V1
AI-00000 -A
© American Funds Distributors, Inc.

25. For financial professionals only. Not for use with the public.
Balancing Risk Language
If used after June 30, 2017, this presentation must be accompanied by the most recent American Funds quarterly statistical update.
Diversifying investments does not protect against market loss.
Regular investing neither ensures a profit nor protects against loss in a declining market.
This meeting may have been funded in whole or in part by American Funds Distributors.
© American Funds Distributors, Inc.
For financial professionals only. Not for use with the public. V1
AI-00000 -A
© American Funds Distributors, Inc.

26. © American Funds Distributors, Inc.