1. The Planning Center and IEEE Preparing for Retirement in Days of Uncertainty

2. Purpose of Today To Introduce To Inform To Educate

3. Introduce

5. Introduce Personnel The Planning Center

6. Introducing The Planning Center Financial Planning Firm Registered Investment Advisor NASD licensed with a Broker / Dealer Purveyor of Order and Value

7. What is Financial Planning? Process for meeting life’s goals Consists of six steps 1. Establishing and defining relationship 2. Gathering client data, including goals 3. Analyzing and evaluating financial status 4. Developing recommendations 5. Implementing the desired recommendations 6. Monitoring

8. What is a Financial Planner? A Big Question!!!

9. .

10. Why Certified Financial Planner? Education Examination Experience Code of Ethics Practice Standards Re-Certified every two years

13. Educate How do markets work?

14. Educate 4 years of the DJIA 4/22/1999 – 4/22/2003

15. Educate

19. S&P 500 Index Return in 1962 -8.7% Return 1962 to 1972 8.1% Return 1962 to 19743.1% Return 1962 to 19848.0% Return 1962 to 199210.7% Return 1962 to 1999 12.2% Return 1999 to 2002 -16.09% Return 1982 to 2002 11.98%

20. Educate

23. -60-55-50-45-40-35-30-25-20-15-10-5051015202530354045505560 192619271928192919301931 1932 19331934193519361937 19381939 1940 1941194219431944 1945 1946 1947 19481949 1950 1951 19521953 1954 1955 1956 195719581959 1960 1961 1962 1963 1964 19651966 19671968 1969 1970 19711972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Large Cap Stock Market Returns 1926 - 1999 1998 13.3 (Mean) 33.4 One Standard Deviation -6.9 One Standard Deviation 53.6 Two Standard Deviations -27.0 Two Standard Deviations 1999

24. Educate

25. U.S. Inflation Returns 1926 - 1999 -18-16-14-12-10-8-6-4-202468101216182224 1926 1927 1928 1929 193019311932 1933 1934 1935 19361937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1420 3.2 (Mean) 7.6 One Standard Deviation -1.3 One Standard Deviation 12.1 Two Standard Deviations -5.7 Two Standard Deviations 1999

26. Investing in Stocks

27. Stock Market Performance 1925 - 1999 Hypothetical value of $1 invested at year-end 1925. Assumes reinvestment of income and no transaction costs or taxes. $2,84611.3% Average Return Ending Wealth Large Company Stocks 12.6%$6,641 Small Company Stocks 193519451955196519751985 $0 $1 $10 $100 $1,000 $10,000 19251999

28. Growth and Value Investing 1927 - 1999 $.1 $1 $10 $100 $1,000 $10,000 $100,000 $1,189 19271937194719571967197719871999 10.3% Annual Return Ending Wealth Large Growth $5,37912.7% Large Value $7499.6% $19,76414.7% Small Value Small Growth

29. Stock Diversification 124681630501001000 Number of Stocks in Portfolio Risk Market Risk Company Risk

30. Risk of Stock Market Loss over Time 1926 - 1999 Periods with Gain Periods with Loss 100% 60 Fifteen-Year Periods 90% 10% 70 Five-Year Periods 73% 27% 74 One-Year Periods

31. Do Stock Winners Repeat? Top Ten Performing Stocks 1980 - 1999 Annualized Return Annualized returns of equal-weighted portfolio of top 10 stocks by 3-year return and return in subsequent 3-year period (excluding the smallest 20% of the market). Average Returns First 3 years 130.9% -50% 0% 50% 100% 150% 200% 1980198519901996 Subsequent 3 years 6.6%

32. Market Downturns and Recovery 1926 - 1999 Downturn 9/29-6/32 6/46-4/47 8/56-2/57 8/57-12/57 1/62-6/62 2/66-9/66 12/68-6/70 1/73-9/74 1/77-2/78 12/80-7/82 9/87-11/87 6/90-10/90 7/98-8/98 34 months -83.4% -21.0% -10.2% -15.0% -22.3% -15.6% -29.3% -42.6% -14.1% -16.9% -29.5% -14.7% -15.4% PeriodLengthAmount 7 months 5 months 6 months 8 months 19 months 21 months 14 months 20 months 3 months 5 months 2 months 11 months Recovery 7/32-1/45 5/47-10/49 3/57-7/57 1/58-7/58 7/62-4/63 10/66-3/67 7/70-3/71 10/74-6/76 3/78-7/78 8/82-10/82 12/87-5/89 11/90-2/91 9/98-11/98 PeriodLength 151 months 5 months 7 months 10 months 6 months 9 months 21 months 5 months 3 months 18 months 4 months 3 months 30 months

33. Principles of Investing

34. Power of Reinvesting 1979 - 1999 Hypothetical value of $1,000 invested at year-end 1979. Annual Return $100 $1,000 $10,000 $100,000 19791984198919941999 $26,81717.9% Ending Wealth Stocks with Reinvestment $7,61710.7% Bonds with Reinvestment $13,61513.9% Stocks without Reinvestment $1,3451.5% Bonds without Reinvestment

35. Importance of Rebalancing Assumes reinvestment of income and no transaction costs or taxes. Stocks: 50% Large and 50% Small Company Stocks. Bonds: Intermediate-Term Government Bonds. 1979 - 1999 Stock Allocation Bond Allocation Portfolio Weightings Target Asset Mix: 50% Stocks, 50% Bonds 50% 56% 44% 60% 40% 63% 37% 78% 22% 0% 20% 40% 60% 80% 100% 19791984198919941999

36. Dangers of Market Timing S&P 500 Treasury Bills Hypothetical Value of $1 Invested from Year-End 1925 - 1999 $2,846 $15.64 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 S&P 500 minus best 40 months $17.07

37. Dangers of Market Timing Hypothetical Value of $1 Invested from Year-End 1979 - 1999 S&P 500 Treasury Bills $26.82 $3.79 $0 $5 $10 $15 $20 $25 $30 S&P 500 minus best 15 months $6.81

38. Investor B 10 $4,000 Year-End 1989-1999 $40,000 $133,600 Power of Compounding Hypothetical Investment in Stocks Investor A 10 $2,000 Year-End 1979-1999 Years Contributing: Annual Amount Contributed: Total Amount Invested Compounded Value at Year-End 1999 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $20,000 $295,400

39. Reduction of Risk over Time 1926 - 1999 Each bar shows the range of compound annual returns for each asset class over the period 1926-1999. 1-Year Holding Periods Small Company Stocks Large Company Stocks Government Bonds Treasury Bills -75% -50% -25% 0% 25% 50% 75% 100% 125% 150% 20-Year Holding Periods 5-Year Holding Periods Compound Average Return 11.3% 12.6%5.1% 3.8%

40. Educate

41. Can You Stay on Track? $747 $1,091 $600 $800 $1,000 $1,200 $1,400 1971197219731974 $100 $1,000 $10,000 $100,000 19741999 $9,413 Stocks Bonds 50/50 Portfolio $912 $24,107 $53,378 19941984

42. OUR JOB To help you stay on track!