4/20/2017 9:42 PM Investing 101 Good morning/afternoon/evening and welcome. Today, I’m going to talk about investing to meet your unique financial goals.

Franklin Templeton Distributors, Inc.
4/20/2017 9:42 PM Note: The following script is intended for use by financial advisors in public seminar presentations. This material has been filed with FINRA and may not be changed in any way without prior approval from Franklin Templeton Distributors, Inc. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call (800) DIAL BEN/ or visit franklintempleton.com. Please carefully read a prospectus before investing. Franklin Templeton Distributors, Inc. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call (800) DIAL BEN/ or visit franklintempleton.com. Please carefully read a prospectus before investing. SEM_INV_0312

4/20/2017 9:42 PM Investing 101 Good morning/afternoon/evening and welcome. Today, I’m going to talk about investing to meet your unique financial goals. However, before I go any further, I think it’s important to note that asset allocation and/or diversification, which we will cover today, do not guarantee a profit or protect against a loss. Additionally, the indexes used throughout the presentation are for illustrative purposes only and are not representative of performance of any Franklin, Templeton or Mutual Series fund. For current performance of any Franklin, Templeton or Mutual Series fund, please visit franklintempleton.com or call (800) DIAL BEN/ Also remember, all these indexes are unmanaged and you cannot invest directly in an index. SEM_INV_0312

Agenda Why Invest? Investment Basics Mutual Funds Asset Allocation
4/20/2017 9:42 PM Agenda Why Invest? Investment Basics Mutual Funds Asset Allocation Why Invest NOW? [MAIN IDEA: Set Agenda] You are probably here because you recognize the importance of investing, but you haven’t had the time to learn more about how investing may help you achieve your unique financial goals. I would bet that finding the time and discipline to invest on a regular basis is difficult for most of you, and knowing how to invest your money may present an even bigger challenge. I would like to cover five areas today: Why Invest? We’ll talk about how investing can help you reach your individual financial goals, such as: Buying a house Paying for college tuition Saving for retirement Investment Basics We’ll discuss the three main asset classes—stocks, bonds and cash equivalents—and the effects of inflation. 3. Mutual Funds What are they, and how do they work? What do they invest in? 4. Asset Allocation What is asset allocation? What are the benefits? Why Invest Now? Is there a best time to invest? What is dollar-cost averaging, and how can it help you take advantage of the ups and downs in the market? Let’s jump right in and learn why deciding to invest may be one of the most important decisions you make regarding your future. SEM_INV_0312

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Investing Can Help You Reach Your Financial Goals
4/20/2017 9:42 PM WHY INVEST? Investing Can Help You Reach Your Financial Goals Buying a House Paying for College Tuition Saving for Retirement [MAIN IDEA: Explain why investing may help your clients reach their financial goals.] Do the goals above seem familiar to any of you? If so, what are you doing to achieve them? Many investors believe that saving is the same as investing. But it isn’t. For example: Saving is putting money aside, typically in a money market fund, certificate of deposit (CD) or bank account. These types of investments provide a high degree of safety and stability, but in a low interest rate environment, they generally earn only a minimal amount of interest. Investing, on the other hand, is putting money to work to achieve long-term growth through a disciplined investment strategy. It’s the art of taking on a reasonable level of risk with the goal of earning potentially higher returns to meet your unique financial goals. By investing your money in various asset classes with a long-term perspective in mind, you may be able to reach your goals faster than by saving alone. That’s because stock and bond investments have historically offered investors the wealth-generating power of compounding. Let’s take a look at an example. SEM_INV_0312

Why Invest? The Power of Compounding
4/20/2017 9:42 PM WHY INVEST? Why Invest? The Power of Compounding Growth of a $10,000 Investment in Stocks1 50-Year Period Ended December 31, 2011 S&P 500 Index $843,411 [MAIN IDEA: Illustrates the power of compounding.] In the simplest terms, compounding is the financial equivalent of a snowball rolling downhill. With each revolution, the snowball gets bigger because it picks up more snow every time around. Compounding produces a snowball effect with money, because by reinvesting your earnings each year, you’re able to put a little more money to work the following year. As time passes, the earnings contribute more and more to the total value of the investment. The longer your investment time frame, the more of an impact compounding can have on your investment returns. As you can see in the chart, if you’d invested $10,000 in stocks, as represented by the S&P 500 Index, on December 31, 1961, and reinvested dividends and capital gains, your investment would have grown to $843,411 by December 31, The reason: Each time you reinvested your dividends and capital gains, whether the market was moving up or down, you were buying more shares, thereby adding to the value of your account. Past performance does not guarantee future results. The power of compounding works over time. However, it works even better the longer you invest. Let’s consider a scenario where two investors have the same annual income and similar investment goals. One invests three times as much, but starts later than the other. Who do you think comes out ahead? 1. Source: © 2012 Morningstar, S&P 500 Index. As of 12/31/11. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Indexes are unmanaged, and one cannot invest directly in an index. 1. Source: © 2012 Morningstar, S&P 500 Index. As of 12/31/11. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Indexes are unmanaged, and one cannot invest directly in an index. SEM_INV_0312

4/20/2017 9:42 PM WHY INVEST? The Cost of Waiting1 Although John invested 20 years longer than Mary and contributed an additional $40,000, his account value at age 65 was 22% less than Mary’s. [MAIN IDEA: The chart shows how delaying your investment program can significantly reduce the size of your portfolio over time.]1 [Mouse Click] Mary began investing $2,000 per year at age 25. She invested a total of $20,000 over the next 10 years, then stopped her contributions. [Mouse Click] John began investing $2,000 per year at age 35. He invested a total of $60,000 over the next 30 years, then stopped his contributions. Although John contributed $40,000 more than Mary, his account value at age 65 was $70,000 less than Mary’s—a 22% difference. As you can see, because of the power of compounding, the sooner you start, the better. Procrastination may be costly. Now that you understand the importance of investing and the power of compounding, let’s take a step back to learn about investment basics. Assumes each account earned 8% annually and includes reinvestment of annual distributions. Investment return and principal value of a Franklin Templeton fund will fluctuate with market conditions, and you may have a gain or a loss when you sell your shares. 1. Assumes each account earned 8% annually and includes reinvestment of annual distributions. Investment return and principal value of a Franklin Templeton fund will fluctuate with market conditions, and you may have a gain or a loss when you sell your shares. SEM_INV_0312

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Putting Money in CDs May Not Be Enough
4/20/2017 9:42 PM INVESTMENT BASICS Putting Money in CDs May Not Be Enough Annual Total Returns of CDs After Inflation and Taxes 20-Year Period Ended December 31, 20111 [MAIN IDEA: Set the tone with the importance of investing and investments.] As we just discussed, investing early and investing consistently with a specific goal and risk tolerance in mind may help you reach your financial goals without getting sidetracked by the ups and downs of the market. Just as important is what you invest in to reach those goals. You’re probably familiar with CDs, which are a popular savings vehicle for people with shorter-term time horizons. However, if you’re a longer-term investor, saving for your child’s college education or your own retirement, an investment in a CD may not be enough to help you reach your financial goals. As you can see in the chart above, over the years, the actual returns of CDs have been much less when you consider the impact of inflation and taxes.1 It’s important to note that CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $100,000 and offer a fixed rate of return. However, CDs in IRAs and certain retirement accounts will continue to be insured by the FDIC for up to $250,000 per owner. A mutual fund’s yield and share price will fluctuate with market conditions. Past performance does not guarantee future results. Now, let’s take a closer look at inflation. Sources: © 2012 Morningstar (Payden & Rygel 180-Day Domestic CD); Bureau of Labor Statistics. After-tax returns are calculated using the tax rate experienced by an investor earning $100,000. Each year’s tax rate is represented by the tax rate at the beginning of each calendar year and assumed to be constant within that year. After-tax returns are then adjusted for inflation using the calendar year CPI with the results being the after-tax real return. It’s important to note that CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $100,000 and offer a fixed rate of return. However, CDs in IRAs and certain retirement accounts will continue to be insured by the FDIC for up to $250,000 per owner. A mutual fund’s yield and share price will fluctuate with market conditions. Past performance does not guarantee future results. 1. Sources: © 2012 Morningstar (Payden & Rygel 180-Day Domestic CD); Bureau of Labor Statistics. After-tax returns are calculated using the tax rate experienced by an investor earning $100,000. Each year’s tax rate is represented by the tax rate at the beginning of each calendar year and assumed to be constant within that year. After-tax returns are then adjusted for inflation using the calendar year CPI with the results being the after-tax real return. SEM_INV_0312

Inflation Shrinks Your Buying Power1
4/20/2017 9:42 PM INVESTMENT BASICS Inflation Shrinks Your Buying Power1 Amount Stamps2 $0.72 2031 $0.44 2011 $0.29 1991 Year Gallon of Milk3 $5.83 2031 $3.57 2011 $2.80 1991 Amount Year New Car4 $41,313 2031 $25,245 2011 $15,473 1991 Amount Year [MAIN IDEA: Inflation can erode the purchasing power of your money.] Increases in the cost of living, while fluctuating from year to year, have averaged about 2.49% annually over the 20 years ending December 31, If this pace were to continue, an item you pay $10 for today would cost about $12.79 in 10 years, and about $16.36 in 20 years. Your investments would need to earn an average of 2.49% each year just to maintain your present purchasing power. As you can see in the slide, we’ve highlighted some commonly purchased items to show how inflation can eat away at an individual’s buying power. For instance, the average car purchased in 1991 would have cost approximately $15,473. Last year, a similar car would have cost $25,245. Assuming inflation compounds at an annual rate of 2.49%, in 2031 a similar car would likely cost a buyer over $41,000! The impact of inflation, compounded over many years, can be severe. How can you get ahead and stay ahead? The good news is there are investments that can provide you the potential for higher total returns than CDs, which may help you keep ahead of inflation, albeit with higher risks. Let’s take a look. 1. All 2031 figures assume the impact of a 2.49% compounded inflation rate. This figure represents the Consumer Price Index (CPI) over the 20 years ending 12/31/11, which reflects the rate of inflation in U.S. consumer prices as determined by the U.S. Bureau of Labor Statistics. 2. Source: U.S. Postal Regulatory Commission. Based on the year-end rate for the first ounce of a first-class letter. 3. Source: Bureau of the Labor Statistics. Based on year-end price per gallon. 4. Source: U.S. Department of Commerce, U.S. Bureau of Economic Analysis. Due to seasonality, based on average prices for the year. 1. All 2031 figures assume the impact of a 2.49% compounded inflation rate. This figure represents the Consumer Price Index (CPI) over the 20 years ending 12/31/11, which reflects the rate of inflation in U.S. consumer prices as determined by the U.S. Bureau of Labor Statistics. 2. Source: U.S. Postal Regulatory Commission. Based on the year-end rate for the first ounce of a first-class letter. 3. Source: Bureau of the Labor Statistics. Based on year-end price per gallon. 4. Source: U.S. Department of Commerce, U.S. Bureau of Economic Analysis. Due to seasonality, based on average prices for the year. SEM_INV_0312

Three Main Asset Classes
4/20/2017 9:42 PM INVESTMENT BASICS Three Main Asset Classes Stocks Bonds Money Market [MAIN IDEA: Discuss the three main asset classes.] Stocks represent part ownership, or equity, in a company. Most investors buy stock because they expect a company to make a profit, which in turn could increase the value of its stock. However, a stock’s value can change at any moment, depending on market conditions, investor perceptions and other reasons. While stocks historically have been more volatile than either bonds or money market instruments, they have also produced the highest returns over the long term.1 Volatility is generally measured by the annualized standard deviation of monthly total returns. Bonds are IOUs, or debt, issued by a corporation, government or government agency in exchange for an investor’s loan. The bond issuer promises to repay the principal amount of the loan on a certain date, and to make periodic, fixed interest payments in the interim, which is why they’re called “fixed income” investments. A bond’s value is determined by the interest it pays and what’s happening in the economy, and it fluctuates along with interest rates, which we’ll discuss in further detail a bit later. Changes in the credit quality of a bond or perceived changes in the financial condition of the issuer may also impact a bond’s value. Generally speaking, bonds have been less volatile than stocks.1 Money Market Instruments (cash equivalents) are short-term debt securities issued by governments, corporations, banks or other financial institutions. They’re typically considered cash equivalents and usually must be repaid within one year, often in 90 days or less. Let’s get into a little more detail regarding stocks and bonds. Sources: © 2012 Morningstar (stocks are represented by the S&P 500 Index; bonds are represented by the Barclays Capital U.S. Aggregate Index). For the 20-year period ended 12/31/11. Past performance does not guarantee future results. SEM_INV_0312

Stocks Stocks Offer Capital Appreciation Potential
4/20/2017 9:42 PM INVESTMENT BASICS Stocks Stocks Offer Capital Appreciation Potential Growth of a $10,000 Investment in Stocks, Bonds, Treasury Bills and CDs1 20-Year Period Ended December 31, 2011 Stocks $45,012 Bonds $35,251 6-Month CDs $21,387 3-Month T-Bills $19,269 [MAIN IDEA: Make the case for investing in stocks.] Investing in stocks may offer the potential for: Greater capital appreciation than other major asset classes A potential hedge against the dollar-weakening impact of inflation Over the long-term, the stock market has trended higher. In fact, as you can see in the chart, over the past 20 years, stocks outperformed other major asset classes, including bonds, short-term Treasury bills and certificates of deposit (CDs).1 However, over the short term, stocks can be volatile, with severe fluctuations in share price. Although stocks may have the highest return potential, they also carry greater risk of loss of principal when compared to the other major asset classes. When investing in stocks, time is your ally. In fact, based on historical results, the longer you remained invested in stocks, the greater likelihood you would have achieved positive returns. Please remember, past performance does not guarantee future results. Treasury bills, if held to maturity, offer a fixed rate of return and fixed principal value; principal and interest are guaranteed. It’s important to note that CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $100,000 and offer a fixed rate of return. However, CDs in IRAs and certain retirement accounts will continue to be insured by the FDIC for up to $250,000 per owner. Stock and bond investments offer no such guarantee. Sources: © 2012 Morningstar (stocks are represented by the S&P 500 Index; bonds are represented by the Barclays Capital U.S. Aggregate Index), three-month T-bills are represented by the Payden & Rygel 90-Day T-Bill, and six-month CDs are represented by the Payden & Rygel 180-Day Domestic CD. Indexes are unmanaged, and one cannot invest directly in an index. Past performance does not guarantee future results. Stocks Bonds 6-Month CDs 3-Month T-Bills Treasury bills, if held to maturity, offer a fixed rate of return and fixed principal value; principal and interest is guaranteed. It’s important to note that CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $100,000 and offer a fixed rate of return. However, CDs in IRAs and certain retirement accounts will continue to be insured by the FDIC for up to $250,000 per owner. Stock and bond investments offer no such guarantee. 1. Sources: © 2012 Morningstar (stocks are represented by the S&P 500 Index; bonds are represented by the Barclays Capital U.S. Aggregate Index), three-month T-bills are represented by the Payden & Rygel 90-Day T-Bill, and six-month CDs are represented by the Payden & Rygel 180-Day Domestic CD. Indexes are unmanaged, and one cannot invest directly in an index. Past performance does not guarantee future results. SEM_INV_0312

Stocks and Bonds Best and Worst Annual Returns1
4/20/2017 9:42 PM Stocks and Bonds Best and Worst Annual Returns1 20-Year Period Ended December 31, 2011 Worst Best 7.81% Average [MAIN IDEA: Make the case for investing in bonds.] [Mouse Click] As you can see, the best return for the bond market over the last 20 calendar years was 18%, while the best return for the stock market was 38%. If stocks have historically had a higher total return, does it make sense to invest in bonds? [Mouse Click to show worst returns] Now how do you feel about investing solely in stocks? While bonds’ highest calendar-year return was not as substantial as the highest calendar-year return of stocks, the range of performance for bonds has been less volatile over the long term. One reason is that bonds generally pay interest whether prices move up or down, which can help cushion their overall return. In addition, the fact is that stock and bond markets typically behave very differently. Since 1992, there have been four down years for stocks, as represented by the S&P 500 Index. And in each of those four years, bonds, as represented by the Barclays Capital U.S. Aggregate Index, had positive returns. Therefore, if you held both stocks and bonds, your negative stock returns could potentially have been somewhat offset by positive bond performance during those years.1 To diversify your portfolio, it may make sense to consider bonds for at least a portion of your investment portfolio. Now that you understand the basics of the main asset classes, let’s move on and learn about the basics of mutual funds. Source: © 2012 Morningstar (S&P 500 Index and Barclays Capital U.S. Aggregate Index). Returns include reinvestment of interest and dividends. Indexes are unmanaged, and one cannot invest directly in an index. Past performance does not guarantee future results. 6.50% Average Diversification and asset allocation do not guarantee a profit, nor do they eliminate the risk of loss of principal. 1. Source: © 2012 Morningstar (S&P 500 Index and Barclays Capital U.S. Aggregate Index). Returns include reinvestment of interest and dividends. Indexes are unmanaged, and one cannot invest directly in an index. Past performance does not guarantee future results. SEM_INV_0312

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Mutual Fund An actively managed investment company
4/20/2017 9:42 PM MUTUAL FUNDS Mutual Fund An actively managed investment company Pools money from individuals and institutions sharing a common goal Professional money managers build a portfolio of securities Share price is determined daily Open-end vs. closed-end [MAIN IDEA: Define a mutual fund and explain the rapid growth.] A mutual fund is an actively managed investment company that pools money from individuals and institutions. Professional money managers build a diversified portfolio of securities designed to seek a specific goal, such as capital appreciation or income. As investors, you can buy shares of a mutual fund, and each share represents a proportional ownership in the fund’s underlying securities. The share price, or net asset value (NAV), is determined at the end of each business day by adding up the value of all the securities in the fund’s portfolio, after expenses, and dividing the sum by the total number of outstanding shares. Most mutual funds are “open-end,” meaning the funds sell shares on an ongoing basis. You may buy or sell shares of the fund each business day. However, there are also “closed-end” funds, which typically have a one-time offering of a fixed number of shares and are then traded on an exchange or in the over-the-counter market. SEM_INV_0312

The Mutual Fund Prospectus
4/20/2017 9:42 PM MUTUAL FUNDS The Mutual Fund Prospectus Investment objectives and goals Investment strategy Risks Management team Fees and expenses Financial highlights Performance tables [MAIN IDEA: The importance of reading the mutual fund prospectus.] Before you purchase shares of a mutual fund, it’s important to read the fund’s prospectus. The prospectus is the fund’s primary selling document and contains valuable information that can help you make an informed investment decision. The prospectus contains important information, including the fund’s: Investment objectives and goals Investment strategy Risks Management team Fees and expenses Financial highlights Performance tables The Securities and Exchange Commission (SEC) requires a fund to include specific categories of information in the prospectus as well as present key data in a standardized format so that investors can easily compare different funds. Always read any footnotes or accompanying explanations to make sure you fully understand the data the fund provides in any charts, tables or text. Now that you know some things to look for when reading a mutual fund prospectus, what are some of the advantages to investing in mutual funds, especially over purchasing individual securities? SEM_INV_0312

The Advantages of Mutual Funds
4/20/2017 9:42 PM MUTUAL FUNDS The Advantages of Mutual Funds Diversification Professional management Convenience Affordability Liquidity [MAIN IDEA: Explain five common advantages that mutual funds have over investing in individual securities.] Five attributes of mutual funds can work to your advantage: Diversification—A mutual fund may hold the securities of hundreds, even thousands, of different issuers, helping reduce the risk that the poor performance of one holding will have on the overall portfolio. It would be difficult for most individual investors to match this level of diversification on their own. Professional management—Professional money managers make buy and sell decisions based on extensive research, combined with analysis of economic and market trends. Few individual investors have the time or the resources to manage a portfolio on a daily basis or stay current on the thousands of securities available. Convenience—Mutual funds offer shareholders many services that make investing easier. You can usually: Exchange money between funds within the same fund family as your investment objectives change. Add to your account electronically, transferring a set dollar amount from your savings or checking account into your mutual fund account each month. Choose to have income distributions paid by check, transferred into a bank account or automatically reinvested in more fund shares. Affordability—Let me explain this one with an example. The Dow Jones Industrial Average is an index made up of 30 different stocks. If you bought 100 shares of each, as of December 31, 2011, you would have had to invest more than $161,000. Now imagine how much money it would take to invest in 100 shares of each stock in another major market index: the NASDAQ Composite Index, which includes more than 3,600 listed companies. In a mutual fund, you can get instant diversification by making an initial investment of as little as $1,000. And in many cases, you can reduce this initial amount by starting a program of monthly investments. Liquidity—You may sell some or all of your mutual fund shares at any time and receive the current value of your shares (net asset value), which may be more or less than the original cost. In some cases, a sales charge may apply. Front-end, and, in some cases back-end sales loads, management fees, Rule 12b-1 fees and other expenses are associated with Franklin, Templeton and Mutual Series fund investments. Investor returns are reduced by these fees and expenses. Funds are offered through prospectuses, which contain detailed information about a fund’s goals, sales charges, expenses and risks. You should carefully read the prospectus before investing or sending money. Many of you may be asking, what are some of the typical risks you may encounter by investing in mutual funds? Let’s find out. Front-end and, in some cases back-end sales loads, management fees, Rule 12b-1 fees and other expenses are associated with Franklin, Templeton and Mutual Series fund investments. Investor returns are reduced by these fees and expenses. Funds are offered through prospectuses, which contain detailed information about a fund’s goals, sales charges, expenses and risks. You should carefully read the prospectus before investing or sending money. SEM_INV_0312

Understanding Mutual Fund Risks
4/20/2017 9:42 PM MUTUAL FUNDS Understanding Mutual Fund Risks Principal (Market) risk Interest rate risk Foreign risk [MAIN IDEA: Briefly explain some of the risks of investing in mutual funds.] Investing involves an unavoidable tradeoff—generally speaking, the higher the return or yield you hope to achieve, the more risk you must be willing to take. Stocks have provided the highest, long-term returns of the three major asset classes (stocks, bonds and money market instruments), and have also been subject to the biggest losses over shorter periods. Bonds have experienced less fluctuation, but lower long-term returns. Money market instruments generally exhibit the least price volatility, but they have provided the lowest, long-term total returns among the major asset classes. Risks include: Principal (Market) risk. The value of your investment may go down because of declining stock and/or bond prices. Interest rate risk. The value of your investment in a bond fund may go down in direct response to rising interest rates. Foreign risk. The value of a fund’s investment in foreign securities may decline because of market conditions, currencies, and/or the economic, social and political climates in the countries where individual investments are made. Although each of these narrower types of risk may impact only specific investment classes, each ultimately contributes to the overall risk of an investment. Every mutual fund has varying levels of risks and rewards. Talk to your financial advisor and read the fund prospectus to find out more about specific fund risks. Depending on your overall financial goals and risk tolerance, what kind of mutual fund is best for you? SEM_INV_0312

Stock Fund Investing Growth funds Value funds Sector funds
4/20/2017 9:42 PM MUTUAL FUNDS Stock Fund Investing Growth funds Value funds Sector funds [MAIN IDEA: Explain the various types of funds that invest in stocks.] Equity, or stock, funds usually fall into two broad style categories: growth and value. Growth funds typically invest in stocks of companies well-positioned to capitalize on long-term growth trends that may drive earnings potential higher. Some are broad-based and may invest in any type of company. Others have a narrower focus, and may invest in companies of a certain size (such as smaller companies). In general, these funds usually seek capital growth through price appreciation of the securities in their portfolios and may offer the potential for stronger performance during healthy economic environments. Growth stocks can be volatile and typically are associated with a higher level of risk than value funds. Value funds are designed to pursue opportunities that have been overlooked by the market or industries that are currently out of favor. Value fund managers generally look to buy companies that are trading below their intrinsic worth, but whose true value they believe will be recognized by the market over time. These securities typically have low prices relative to earnings, and often offer higher dividend yields than growth funds. Sector funds typically invest in a single industry or a group of industries (sector) and may follow either a growth or a value style to investing. Because sector funds concentrate on a single sector, they may offer greater potential returns when those sectors are flourishing, than broadly invested portfolios. However, sector funds are also subject to large declines when a sector is out of favor. These funds are best used as a complement to a well-diversified portfolio. It’s important to remember that sector funds involve a higher degree of risk than more diversified funds. Some things to consider when choosing a stock fund: It’s important to keep a long-term perspective Varying degrees of risk are attributed to different types of stocks and stock funds SEM_INV_0312

Bond Fund Investing Taxable bond funds Tax-free bond funds1
4/20/2017 9:42 PM MUTUAL FUNDS Bond Fund Investing Taxable bond funds Tax-free bond funds1 Certain risks are associated with investing in bond funds Bonds are particularly sensitive to interest rate movements, and their prices will fluctuate with market conditions. Bond prices, and thus a bond fund’s share price, generally move in the opposite direction of interest rates. Thus, as the prices of bonds in a fund adjust to a rise in interest rates, a fund’s share price may decline. [MAIN IDEA: Explain the various types of funds that invest in bonds.] Taxable bond funds invest in government bonds and corporate bonds. They may focus on one specific bond type (for example, government bonds), or they may invest more generally across many bond sectors. Securities may be both domestic and foreign, depending on the fund’s investment parameters. Dividends usually are subject to federal and state income taxes. Tax-free bond funds invest in municipal securities issued by state and local governments. The interest earned from these securities is exempt from federal income taxes and, depending upon the state in which they are issued and where you reside, state and local income taxes as well.1 The interest rates offered by tax-free bonds usually are lower than rates on taxable bonds, since the income is tax free. However, any capital gains distributed by a tax-free fund, or capital gains earned by selling shares of a tax-free fund, are subject to tax. Certain risks are associated with investing in bond funds. Bonds are particularly sensitive to interest rate movements, and their prices will fluctuate with market conditions. Bond prices, and thus a bond fund’s share price, generally move in the opposite direction of interest rates. Thus, as the prices of bonds in a fund adjust to a rise in interest rates, a bond fund’s share price may decline. For investors subject to the alternative minimum tax, all or a portion of a fund’s dividends may be subject to such tax, depending on the fund. Distributions of capital gains, if any, are generally taxable. 1. For investors subject to the alternative minimum tax, all or a portion of a fund’s dividends may be subject to such tax, depending on the fund. Distributions of capital gains, if any, are generally taxable. SEM_INV_0312

Did You Know? Global Fund Investing
4/20/2017 9:42 PM MUTUAL FUNDS Global Fund Investing Foreign Stock and Bond Markets: A Significant Investment Opportunity Foreign Stock Market Capitalization1 As of December 31, 2011 Foreign Government Bond Market Capitalization2 As of December 31, 2011 Did You Know? [MAIN IDEA: Explain the size of the global markets.] Did you know? As of December 31, 2011, foreign stocks made up 54%, and foreign government bonds made up 72% of the world’s equity and government debt investment opportunities, respectively.1, 2 Therefore, by limiting a portfolio solely to U.S. securities, you’re essentially cutting your investment choices by 54%, or more. Source: MSCI Perspective. Based on share of world stock market capitalization as of 12/31/11. Source: Citigroup World Government Bond Index. Based on share of world government bond market capitalization as of 12/31/11. 1. Source: MSCI Perspective. Based on share of world stock market capitalization as of 12/31/11. 2. Source: Citigroup World Government Bond Index. Based on share of world government bond market capitalization as of 12/31/11. SEM_INV_0312

Global Fund Investing Giving Investors Access to Markets Worldwide
4/20/2017 9:42 PM MUTUAL FUNDS 21 Global Fund Investing Giving Investors Access to Markets Worldwide [MAIN IDEA: Explain the various types of global funds.] One of the great advantages of mutual funds is that they give investors access to markets that would be difficult for them to invest in on their own. Global and international funds generally have the same investment goals as domestic funds—the main difference is where they invest. As you can see on the map, Global Funds invest in both foreign and U.S. stock and/or bond markets. These funds have access to the widest range of investment opportunities available, and the percentage of assets invested in the U.S. can vary widely. [mouse click] Foreign or International Funds invest only in foreign stock and/or bond markets. By investing in countries outside the United States, these funds tap into markets that may behave differently than U.S. markets, potentially offering broad diversification. [mouse click] Emerging Markets Funds invest principally in the developing markets of Asia, Latin America, eastern Europe and Africa. Compared to more mature markets, emerging markets offer the potential for sharp growth rates. However, they involve heightened risks related to their smaller size, lesser degree of liquidity, currency fluctuations, and the more volatile economic and political climates of less developed countries. Special risks are associated with investing in foreign funds. Share prices and returns of global and international mutual funds will fluctuate—sometimes dramatically—in response to changes in market conditions, currency valuations, and economic, social and political climates of the countries where investments are made. Developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Special risks are associated with investing in foreign funds. Share prices and returns of global and international mutual funds will fluctuate—sometimes dramatically—in response to changes in market conditions, currency valuations, and economic, social and political climates of the countries where investments are made. Developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. SEM_INV_0312 21

Foreign Markets Provide Opportunity
4/20/2017 9:42 PM MUTUAL FUNDS Foreign Markets Provide Opportunity Best-Performing Stock and Bond Markets (2002–2011) Stocks1 2002 New Zealand 2003 Greece 2004 Austria 2005 Canada 2006 Spain 2007 Finland 2008 Japan 2009 Norway 2010 Sweden: 34.81% 2011 Ireland: 14.30% Bonds2 2002 Norway 2003 Australia 2004 Poland 2005 Mexico 2006 2007 Canada 2008 Japan 2009 Indonesia 2010 Indonesia: 28.79% 2011 Indonesia: 22.54% [MAIN IDEA: Global diversification can provide opportunity.] [mouse click] During the past 10 years, the U.S. stock market was never the world’s top performer.1 [mouse click] Additionally, the U.S. bond market was never the world’s top performer.2 So as you can see, the world’s best-performing stock and bond markets vary from year to year. Therefore, a geographically diversified portfolio can help ensure that your investment is not dependent upon the performance of any single stock or bond market. Now, let’s raise the bar. I’d like to discuss an investment technique that can truly diversify your portfolio and help you seek your financial objectives. It’s called asset allocation. Source: © 2012 Morningstar; Morgan Stanley Capital International, Inc. Based on the total return of equity markets that compose the MSCI World Index. Indexes are unmanaged, and one cannot invest directly in an index. Source: © 2012 Morningstar; Citigroup. Based on the total return of debt markets that compose the Citigroup World Government Bond Index and additional markets. Indexes are unmanaged, and one cannot invest directly in an index. 1. Source: © 2012 Morningstar; Morgan Stanley Capital International, Inc. Based on the total return of equity markets that compose the MSCI World Index. Indexes are unmanaged, and one cannot invest directly in an index. 2. Source: © 2012 Morningstar; Citigroup. Based on the total return of debt markets that compose the Citigroup World Government Bond Index and additional markets. Indexes are unmanaged, and one cannot invest directly in an index. SEM_INV_0312

4/20/2017 9:42 PM Asset Allocation SEM_INV_0312

What Is Asset Allocation?
4/20/2017 9:42 PM ASSET ALLOCATION What Is Asset Allocation? DEFINITION Investing your money in different asset categories–typically including stocks, bonds and cash equivalents–so your investment portfolio is well-diversified. OBJECTIVE To develop an investment portfolio that will help you reach your financial objectives, while maintaining a level of risk that’s comfortable for you. [MAIN IDEA: Introduce asset allocation.] Many of you may be asking, “What is asset allocation?” Asset allocation is the process of investing your money in different categories of assets—typically including stocks, bonds and cash equivalents—so your investments are well diversified, potentially helping you reach your financial objectives, while maintaining a level of risk that’s comfortable for you. A well-diversified plan will not outperform the top asset class in any given year, but over time, it may be one of the most effective ways to realize your long-term goals. SEM_INV_0312

Why Diversify? Because Winners Rotate
4/20/2017 9:42 PM ASSET ALLOCATION Why Diversify? Because Winners Rotate Annual Total Returns of Key Asset Classes (1992–2011) Perhaps nothing illustrates the need for an asset allocation plan better than this chart. It shows how various asset classes performed on a year-by-year basis from 1992–2011. The best-performing asset class is at the top of each column. What I want you to notice is the way asset classes move from year to year, and how often an asset category is a top performer one year, and a bottom performer the next. Diversification does not guarantee a profit or protect against loss. Source: © 2012 Morningstar. Large stocks are represented by the S&P 500; large growth stocks are represented by the S&P 500/Barra Growth Index until 1995 and the S&P 500 Growth Index thereafter; x large value stocks are represented by the S&P 500/Barra Value Index until 1995 and the S&P 500 Value Index thereafter; small stocks are represented by the Russell 2000® Index; small growth stocks are represented by the Russell 2000 Growth Index; small value stocks are represented by the Russell 2000 Value Index; foreign stocks are represented by the MSCI EAFE Index; and bonds are represented by the Barclays Capital U.S. Aggregate Index. Indexes are unmanaged, and one cannot invest directly in an index. Past performance does not guarantee future results Diversification does not guarantee a profit or protect against loss. Source: © 2012 Morningstar. Large stocks are represented by the S&P 500; large growth stocks are represented by the S&P 500/Barra Growth Index until 1995 and the S&P 500 Growth Index thereafter; large value stocks are represented by the S&P 500/Barra Value Index until 1995 and the S&P 500 Value Index thereafter; small stocks are represented by the Russell 2000® Index; small growth stocks are represented by the Russell 2000 Growth Index; small value stocks are represented by the Russell 2000 Value Index; foreign stocks are represented by the MSCI EAFE Index; and bonds are represented by the Barclays Capital U.S. Aggregate Index. Indexes are unmanaged, and one cannot invest directly in an index. Past performance does not guarantee future results SEM_INV_0312

Three Popular Strategies for Investing
4/20/2017 9:42 PM ASSET ALLOCATION Three Popular Strategies for Investing 20-Year Period Ended December 31, 2011 Total Investment Value of Portfolio Average Annual Total Return 1. Chasing the Winners Investing in last year’s best1,2 performing asset class $200,000 $364,320 5.42% Now let’s take a look at three popular strategies people use to decide how and where to invest their money. One of the most popular strategies people use is one I call “Chasing the Winners.” This strategy is based on the belief that last year’s most successful investments will also be this year’s most successful investments. That doesn’t sound too far-fetched, does it? Let’s take a look at how well you would have done if you had followed this strategy. [mouse click] Let’s say you invested $10,000 annually each January 1, over the past 20 years, into the previous year’s winner. If you followed this strategy and held these investments through December 31, 2011, your total $200,000 investment ($10,000 a year for 20 years) would have grown to $364,320, and generated an average annual total return of 5.42%.1 Doesn’t sound like too bad a strategy, does it? But you’ve all heard the saying, “What goes up must come down.” And if you turn that upside down, what do you get? “What goes down must come up,” right? A lot of investors think like that, so they follow what I call the “Investing with the Losers” method. [mouse click] With this strategy, you invest in last year’s loser, or the prior year’s worst-performing asset class. The theory is that once stocks are down, the only place for them to go is up, so investors choose the worst-performing asset classes and hope for the best. How would you have done if you’d invested $10,000 a year for 20 years into the asset class that had the biggest loss the previous year? Your total $200,000 investment would have grown to $394,566.1 That’s higher than the “Chasing the Winners” strategy. Sounds like chasing the worst-performing asset class is the plan, right? Well, don’t make up your mind just yet. Let’s look at our last scenario. [mouse click] Let’s say you decided to invest consistently across several asset classes in equal proportion each year. If you had divided $10,000 evenly each year among the eight asset classes and you held these investments through December 31, 2011, your total investment of $200,000 would have grown to $413,477, and generated an average annual total return over the period of 6.50%.1 That is an increase of $49,157 over the “Chasing the Winners” strategy, and an increase of $18,911 over the “Investing with the Losers” strategy! Although past performance does not guarantee future results, you can see from these strategies, during the featured time period, that asset allocation could be a sound, long-term investment strategy. This chart if for illustrative purposes only. It is important to note that an asset allocation strategy does not ensure results superior to other investment strategies and also does not guarantee a profit or protect against a loss. The chart does not represent the performance of any Franklin, Templeton or Mutual Series fund. For the current performance of any Franklin, Templeton or Mutual Series fund, please visit franklintempleton.com or call (800) DIAL BEN/ Source: © 2012 Morningstar. Large stocks are represented by the S&P 500; large growth stocks are represented by the S&P 500/Barra Growth Index until 1995 and the S&P 500 Growth Index thereafter; large value stocks are represented by the S&P 500/Barra Value Index until 1995 and the S&P 500 Value Index thereafter; small stocks are represented by the Russell 2000® Index; small growth stocks are represented by the Russell 2000 Growth Index; small value stocks are represented by the Russell 2000 Value Index; foreign stocks are represented by the MSCI EAFE Index; and bonds are represented by the Barclays Capital U.S. Aggregate Index. Annual investments are made into the best-performing asset class index of the previous calendar year. Annual investments are made into the worst-performing asset class index of the previous calendar year. Annual investments are distributed evenly among all eight asset class indexes each calendar year. Indexes are unmanaged, and one cannot invest directly in an index. This illustration assumes that indexes are reasonable representations of asset classes and their returns. However, investment manager performance relative to the different asset class indexes has varied widely during the past 20 years. Past performance does not guarantee future results. 2. Investing with the Loser Investing in last year’s worst1,3 performing asset class $200,000 $394,566 6.10% 3. ASSET ALLOCATION Investing consistently across several asset classes1,4 $200,000 $413,477 6.50% This chart if for illustrative purposes only. It is important to note that an asset allocation strategy does not ensure results superior to other investment strategies and also does not guarantee a profit or protect against a loss. The chart does not represent the performance of any Franklin, Templeton or Mutual Series fund. For the current performance of any Franklin, Templeton or Mutual Series fund, please visit franklintempleton.com or call (800) DIAL BEN/ 1. Source: © 2012 Morningstar. Large stocks are represented by the S&P 500; large growth stocks are represented by the S&P 500/Barra Growth Index until 1995 and the S&P 500 Growth Index thereafter; large value stocks are represented by the S&P 500/Barra Value Index until 1995 and the S&P 500 Value Index thereafter; small stocks are represented by the Russell 2000® Index; small growth stocks are represented by the Russell 2000 Growth Index; small value stocks are represented by the Russell 2000 Value Index; foreign stocks are represented by the MSCI EAFE Index; and bonds are represented by the Barclays Capital U.S. Aggregate Index. 2. Annual investments are made into the best-performing asset class index of the previous calendar year. 3. Annual investments are made into the worst-performing asset class index of the previous calendar year. 4. Annual investments are distributed evenly among all eight asset class indexes each calendar year. Indexes are unmanaged, and one cannot invest directly in an index. This illustration assumes that indexes are reasonable representations of asset classes and their returns. However, investment manager performance relative to the different asset class indexes has varied widely during the past 20 years. Past performance does not guarantee future results. SEM_INV_0312

Put Risk and Reward in Perspective
4/20/2017 9:42 PM ASSET ALLOCATION Put Risk and Reward in Perspective An Asset-Allocated Portfolio Would Have Provided Comparable Returns with Less Risk1 Based on an 80% Stock and 20% Bond Allocation 20-Year Period Ended December 31, 2011 This chart shows the historical returns and volatility of several asset classes individually, compared with an asset-allocated portfolio that contains 80% stocks, spread evenly across the five stock types shown in the chart, and 20% bonds. As you can see, though two asset classes had slightly higher returns, they also exposed the investor to more risk than the asset-allocated portfolio.1 One of the best reasons to follow an asset allocation strategy is that it helps you stay in control of your financial plan. Once you’ve determined your financial goals and your tolerance for risk, you’ll want to sit down and decide what percentage of your invested money you want in each type of asset, then stick to the plan. Source: © 2012 Morningstar. Large growth stocks are represented by the S&P 500/Barra Growth Index until 1995 and the S&P 500 Growth Index thereafter; large value stocks are represented by the S&P 500/Barra Value Index until 1995 and the S&P 500 Value Index thereafter; small growth stocks are represented by the Russell 2000 Growth Index; small value stocks are represented by the Russell 2000 Value Index; foreign stocks are represented by the MSCI EAFE Index; and bonds are represented by the Barclays Capital U.S. Aggregate Index; the asset allocation portfolio comprises 16% S&P 500/Barra+S&P 500 Growth Index, 16% Russel 2000 Growth Index, 16% MSCI EAFE Index, 16% S&P 500/Barra+S&P 500 Value Index, 16% Russell 2000 Value Index and 20% Barclays Capital U.S. Aggregate Index. Risk is measured by the annualized standard deviation of monthly total returns. Indexes are unmanaged, and one cannot invest directly in an index. Past performance does not guarantee future results. 1. Source: © 2012 Morningstar. Large growth stocks are represented by the S&P 500/Barra Growth Index until 1995 and the S&P 500 Growth Index thereafter; large value stocks are represented by the S&P 500/Barra Value Index until 1995 and the S&P 500 Value Index thereafter; small growth stocks are represented by the Russell 2000 Growth Index; small value stocks are represented by the Russell 2000 Value Index; foreign stocks are represented by the MSCI EAFE Index; and bonds are represented by the Barclays Capital U.S. Aggregate Index; the asset allocation portfolio comprises 16% S&P 500/Barra+S&P 500 Growth Index, 16% Russel 2000 Growth Index, 16% MSCI EAFE Index, 16% S&P 500/Barra+S&P 500 Value Index, 16% Russell 2000 Value Index and 20% Barclays Capital U.S. Aggregate Index. Risk is measured by the annualized standard deviation of monthly total returns. Indexes are unmanaged, and one cannot invest directly in an index. Past performance does not guarantee future results. SEM_INV_0312

4/20/2017 9:42 PM Why Invest NOW? SEM_INV_0312

— The late Sir John Templeton
4/20/2017 9:42 PM “History shows that time–not timing– is the key to investment success.” — The late Sir John Templeton Templeton Funds Founder and Former Chairman SEM_INV_0312

4/20/2017 9:42 PM WHY INVEST NOW? Can You Afford to Wait? $10,000 Investments on the Best and Worst Days1 Measured by the S&P 500 Index for the 20-Year Period Ended December 31, 2011 Best Days Worst Days Cumulative Investment $200,000 Value on 12/31/11 $424,495 $334,510 Average Annual Total Return 6.89% 5.02% [MAIN IDEA: Waiting for the “right” moment to invest in the stock market isn’t going to make that much of a difference over the long term—it’s more important that you begin investing.] Many investors think they should wait until the “right” time to invest—in this case in stocks. However, as we all know, trying to time the market is next to impossible. But trying to time the market is not really investing. It’s “trading,” and very few individuals have the time or technical expertise to trade. Investing is about “time in the market,” not “timing the market.” And historically, the longer you’re in the market, the greater your potential for increasing your wealth. These hypothetical illustrations present what would have happened if two individuals invested in the stock market, as represented by the S&P 500 Index, in the best- and worst-possible scenarios. Both scenarios assume two individuals invested $10,000 a year for 20 years. One invested on the worst day (the day the market was at its yearly high), while the other invested on the best day (the day the market was at its yearly low). As you can see, at the end of 20 years, the best-day scenario had an investment value of $424,495 with an average annual total return of 6.89%. The worst-day scenario had an investment value of $334,510 with an average annual total return of 5.02%.1 The average yearly difference between investing in the best scenario versus investing in the worst scenario was only 1.87% each year during the 20-year period.1 While the stock market’s performance will vary from year to year, this example shows that when you invested isn’t necessarily as important as that you did invest. Let’s look at another example. Source: © 2012 Morningstar. $10,000 is deposited at the close of the best or worst day and credited to the hypothetical account prior to the opening of the next business day. Total return of the S&P 500 Index assumes reinvestment of dividends. The index is unmanaged, and one cannot invest directly in an index. For the 20-year period ended 12/31/11. Past performance does not guarantee future results. 1. Source: © 2012 Morningstar. $10,000 is deposited at the close of the best or worst day and credited to the hypothetical account prior to the opening of the next business day. Total return of the S&P 500 Index assumes reinvestment of dividends. The index is unmanaged, and one cannot invest directly in an index. For the 20-year period ended 12/31/11 .Past performance does not guarantee future results. SEM_INV_0312

Jumping In and Out of the Market Could Cost Money
4/20/2017 9:42 PM WHY INVEST NOW? Jumping In and Out of the Market Could Cost Money Missing the “Best” Days 20-Year Period Ended December 31, 2011 Period of Investment S&P 500 Average Annual Total Return1 Stayed fully invested 7.81% Missed the best 10 days 4.14% Missed the best 20 days 1.70% Missed the best 30 days -0.39% Missed the best 40 days -2.31% [MAIN IDEA: Jumping in and out of the market is a risky endeavor. You may be better off staying fully invested.] For starters, attempting to avoid market corrections may be risky. Investors who want to time the markets essentially are trying to predict the future, which is impossible. These investors think about missing the “worst” days, but what if they miss the “best” days? As you can see, the chart shows what would happen if an investor tried to time the market, but missed the best 10, 20, 30 or 40 trading days.1 The “best trading days” are based on single-day gains as measured by the S&P 500 Index over the 20-year period ended December 31, The key point is that remaining fully invested is a better way to take advantage of all of the market’s “best” days. There is a simple, consistent strategy for staying fully invested for the long term and not having to worry about timing the market: dollar-cost averaging. I will explain this strategy and its benefits in more detail in the following slides. Source: Standard & Poor's. Based on returns of the S&P 500 Index over the 20-year period ended 12/31/11. Indexes are unmanaged and include reinvested dividends; one cannot invest directly in an index. Past performance does not guarantee future results. 1. Source: Standard & Poor's. Based on returns of the S&P 500 Index over the 20-year period ended 12/31/11. Indexes are unmanaged and include reinvested dividends; one cannot invest directly in an index. Past performance does not guarantee future results. SEM_INV_0312

Three Keys to Dollar-Cost Averaging
4/20/2017 9:42 PM WHY INVEST NOW? Three Keys to Dollar-Cost Averaging Dollar-cost averaging is committing a fixed amount of money at regular intervals to an investment such as a mutual fund 1 Begin investing 2 Focus on accumulating shares, not on share prices 3 Be prepared to weather market declines [MAIN IDEA: Define dollar-cost averaging and explain the three keys to how it makes investing simple, taking guessing out of the equation.] Dollar-cost averaging is committing a fixed amount of money at regular intervals to an investment such as a mutual fund. There’s an intrinsic logic to this technique: You can buy more shares when prices are low and fewer shares when prices are high. As you invest, over time, your average cost per share may be less than the average price per share, which we will cover in more detail with an example later. The following three concepts are key to an effective dollar-cost averaging program. Begin investing. Instead of waiting for the right time to invest, it may be best to begin today. Over the long term, it has made relatively little difference whether the market was up or down when beginning an investment program, although past performance is not predictive of future results. Focus on accumulating shares, not on share prices. A drop in a fund’s share price is bad news for someone who plans to sell, but can be good news if you’re accumulating shares. That’s because lower prices mean you can buy more shares with your fixed investment amount—shares that have the potential to grow in value, assuming the market turns upward again. Prepare to weather market declines. Keep in mind that dollar-cost averaging usually works best over long periods of time, so you must be prepared to commit the financial resources and have the resolve to make the contributions on each appointed date, even during an extended down market. Such a plan does not assure a profit and does not protect against a loss in a declining market. Dollar-cost averaging involves continuous investment in securities, regardless of fluctuating price levels. Investors should consider their financial ability to continue purchases through periods of low price levels or changing economic conditions. Now, let me show you an example of how dollar-cost averaging works. Such a plan does not assure a profit and does not protect against a loss in a declining market. Dollar-cost averaging involves continuous investment in securities, regardless of fluctuating price levels. Investors should consider their financial ability to continue purchases through periods of low price levels or changing economic conditions. SEM_INV_0312

The Mechanics of Dollar-Cost Averaging
4/20/2017 9:42 PM WHY INVEST NOW? The Mechanics of Dollar-Cost Averaging Month Monthly Investment Amount Share Price Shares Purchased Each Month January $500 $8.50 58.80 February $10.00 50.00 March $11.50 43.50 April TOTAL $2,000 $40.001 202.30 Average Share Price: $10.00 ($40/4 purchases) Average Share Cost: $9.88 ($2,000/202.3 shares) The average cost of your shares would be 1.1% lower than the average share price over that period. [MAIN IDEA: Discuss how dollar-cost averaging works in an example.] The only certainty about investing is that stock and bond prices will fluctuate—day to day, month to month, year to year. Dollar-cost averaging helps because your money always buys fewer shares when markets are up and more shares when they’re down. Let’s say, for example, you’d invested $500 every month for four months during a period of fluctuating prices. As the table illustrates, your average share cost would have been less than the average share price during that period. So now you are all probably wondering when to start investing. I suggest right now! 1. Cumulative total of share prices used to compute average share price. SEM_INV_0312

The Impact of Starting Early
4/20/2017 9:42 PM WHY INVEST NOW? The Impact of Starting Early Growth of a $10,000 Investment Based on Varying Rates of Return1 20-Year Period Ended December 31, 2011 [MAIN IDEA: Illustrate how investing early and the power of compounding can work.] It’s easy for investing to get lumped into the list of things you’ll do later. But the impact of time on an investment makes starting early a wise move. As you can see in the chart above, and as we discussed earlier, the power of compounding works over time to help you ride out the short-term ups and downs of the market. The short-term volatility of the market is sometimes equated to riding a roller coaster, however, there is one major difference. When your roller coaster ride is over, you’re exactly where you started. Fortunately, stocks and bonds have trended higher over the long term despite steep periodic declines. From a long-term perspective, the declines don’t look nearly as steep as they probably felt at the time. Now is a great time to start. Don’t kick yourself because you didn’t start investing earlier. Instead, begin investing as soon as possible. Starting now will do you more good than never starting at all. So, if you’re going to apply some of the investment techniques we’ve discussed today to help you reach your financial goals, why not invest with a leader in the mutual fund industry: Franklin Templeton Investments. The results assume a 3%, 7% and 11% fixed annual return, compounded monthly for the 20-year period ended 12/31/11. Share prices of Franklin, Templeton or Mutual Series funds will vary with market conditions. No adjustment has been made for income taxes. The results assume a 3%, 7% and 11% fixed annual return, compounded monthly for the 20-year period ended 12/31/11. Share prices of Franklin, Templeton or Mutual Series funds will vary with market conditions. No adjustment has been made for income taxes. SEM_INV_0312

Franklin Templeton Investments
4/20/2017 9:42 PM WHY INVEST NOW? Franklin Templeton Investments Gain From Our Perspective® Specialized Expertise of Three World-Class Investment Management Groups FRANKLIN Founded in 1947 A leader in domestic fixed income and equity investing TEMPLETON Founded in 1940 A pioneer in international investing [Main Idea: Franklin Templeton Investments is the mutual fund group of choice.] Franklin Templeton Investments is a mutual fund leader. They offer mutual funds from three distinct groups including: Franklin—Founded in 1947 Franklin is a recognized leader in fixed income investing and also brings expertise in growth- and value-style U.S. equity investing. Templeton—Founded in Templeton pioneered international investing and, in 1954, launched what has become the industry’s oldest global fund. Today, with offices in over 25 countries, Templeton offers investors a truly global perspective. Mutual Series—Founded in 1949 Mutual Series is dedicated to a unique style of value investing, searching aggressively for opportunity among what it believes are undervalued stocks, as well as arbitrage situations and distressed securities. MUTUAL SERIES Founded in 1949 An innovator in value investing SEM_INV_0312

Review Why Invest? Investment Basics Mutual Funds Asset Allocation
4/20/2017 9:42 PM Review Why Invest? Investment Basics Mutual Funds Asset Allocation Why Invest NOW? [MAIN IDEA: Summarize Five Key Points] To recap, I covered five areas today regarding mutual fund investing: Why Invest? Investing can help you reach your individual financial goals, especially through the power of compounding. Investment Basics Stocks, bonds and cash equivalents are the building blocks of any investment portfolio, but beware of inflation as it can negatively impact your financial returns over time. Mutual Funds Mutual funds, which invest in stocks, bonds and cash equivalents, are an excellent way to help simplify investing. It’s no wonder that more than 90 million people in the U.S. alone included mutual funds in their investment plans as of October 2011, which is the most recent data available. Asset Allocation Investing in various asset categories—stocks, bonds and cash equivalents—may increase your chances of reaching your financial objectives over the long term. Why Invest Now? I can sum this area up with one quote: “When you invest is not necessarily as important as that you do invest.” I recommend starting today. SEM_INV_0312

Action Step Let’s set up an appointment 4/20/2017 9:42 PM
[MAIN IDEA: Call to Action] Let’s review your portfolio. Even if your assets were well balanced between stocks and bonds several years ago, they may now be significantly out of balance. Let’s examine your risk tolerance level. Could you weather a significant period of time in a declining market environment? This answer will determine if you may want to reallocate your portfolio so you’re taking on a level of risk that’s comfortable for you. That concludes my presentation. Please stop by if you have additional questions or would like to set up an appointment. SEM_INV_0312

4/20/2017 9:42 PM Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call (800) DIAL BEN/ or visit franklintempleton.com. Please carefully read a prospectus before investing. SEM INV 03/12 SEM_INV_0312

4/20/2017 9:42 PM Investing 101 Good morning/afternoon/evening and welcome. Today, I’m going to talk about investing to meet your unique financial goals.

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4/20/2017 9:42 PM Investing 101 Good morning/afternoon/evening and welcome. Today, I’m going to talk about investing to meet your unique financial goals.

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