1. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 LCN200803-2013997 Long-Term Investment Performance

2. Measuring Historical Long-Term Market Performance © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 Compound annual return (geometric mean)  The average performance of an asset that measures the change in wealth over more than one period. Arithmetic mean  Simple average of returns Risk (standard deviation)  The fluctuation of returns around the arithmetic average return of the investment. The higher the standard deviation, the greater the variability (and thus risk) of the investment returns.

3. Types of Asset Classes © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 Stocks  Large stocks  Small stocks  International stocks Bonds  Government bonds  Corporate bonds  Municipal bonds  High-yield bonds  International bonds Cash equivalents  Money market funds  Treasury bills  Certificates of deposit Real assets  Real estate  Commodities  Gold

4. Ibbotson ® SBBI ® Stocks, Bonds, Bills, and Inflation 1926–2007 Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1926. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 0.10 1 10 100 $10,000 1,000 192619461966198619361956197619962006 $15,091 $3,246 $79 $20 $12 Compound annual return Small stocks 12.5% Large stocks Government bonds Treasury bills Inflation 10.4 5.5 3.7 3.0

5. Ibbotson ® SBBI ® Stocks, Bonds, Bills, and Inflation 1988–2007 Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1988. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 1988199319982003 1 10 $20.60 $2.41 $1.82 $5.89 $9.33 $12.54 Compound annual return Small stocks 13.5 % Large stocks Government bonds Treasury bills Inflation 11.8 9.3 4.5 3.0

6. The Past 10 Years 1998–2007 Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1998. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008.80 1 3 $5 19982000200220042006 $1.30 $1.42 $1.78 $2.02 $2.73 Compound annual return Small stocks 10.6% 7.3 Large stocks Government bonds Treasury bills Inflation 5.9 3.5 2.7

7. Long-Term Asset Class Performance 1926–2007 Past performance is no guarantee of future results. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 Annual 12-month rolling periods Compound annual return Standard deviation Highest return Lowest return Average positive return Average negative return Percent periods positive Percent periods negative 12.5% 32.6% 316.4% –75.9% 31.3% –18.5% 72.9% 27.1% 10.4% 20.0% 162.9% –67.6% 21.7% –13.7% 74.5% 25.5% 5.5% 9.2% 54.4% –17.1% 8.5% –3.8% 77.8% 22.2% 3.7% 3.1% 15.2% 0.0% 3.8% 0.0% 98.4% 1.6% Small stocks Large stocks Government bonds Treasury bills

8. Bond Market Performance 1926–2007 Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1926. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 $20.19 $33.48 $78.78 $105.86 $220.19 $3,246.39 $10,000 1,000 100 10 1 0.10 10.4% 6.8 5.9 5.5 4.4 3.7 Compound annual return Stocks High-yield corp bonds Corporate bonds Government bonds Municipal bonds Treasury bills 192619361946195619661976198619962006

9. Bonds: Risk Versus Return 1970–2007 Past performance is no guarantee of future results. Risk and return are measured by standard deviation and compound annual return, respectively. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 Municipal bonds Treasury bills Intermediate-term government bonds Long-term corporate bonds High-yield corporate bonds Long-term government bonds 2% Risk468101214 9 8 7 6 5 10% Return

10. Growth and Value Investing 1969–2007 Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1969. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 14.8% 10.8 9.2 9.1 Compound annual return Small value Large value Large growth Small growth $220.84 $55.22 $31.02 $29.69 $1,000 100 10 1 0 1969197519811987199319992005

11. Stocks, Commodities, Real Estate, and Gold 1988–2007 Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1988. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 $1.72 $5.36 $4.48 $6.98 $9.33 11.8% 10.2 8.8 7.8 2.8 Compound annual return $10.50 1 1988199319982003 U.S. stocks Commodities Real estate International stocks Gold