Source: Ken French Data Library, Morningstar Direct 2020. Hypothetical value of $1 invested at the beginning of 1927 and kept invested through December 31, 2019. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. Total returns in U.S. dollars. Past performance is no guarantee of future results. U.S. Stocks represented by the Fama/French Total U.S. Market Research Index Portfolio, which is an unmanaged index of stocks of all U.S. companies operating on the NYSE, AMEX, or NASDAQ. Long-Term Government Bonds represented by 20-Year U.S. Treasury bonds. One-Month U.S. Treasury Bills represented by 30-day U.S. Treasury bills. The Consumer Price Index (CPI) reflects monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. The Fama/French Total U.S. Market Research Index Portfolio Index, the Long-Term Government Bonds Index, the One-Month U.S. Treasury Bills Index, and the U.S. Consumer Price Index (inflation), are unmanaged baskets of securities that investors cannot directly invest in. Index performance does not reflect the fees or expenses associated with the management of an actual portfolio. Risks associated with investing in stocks potentially Include increased volatility (up and down movement in the value of your assets) and loss of principal. T Bills and government bonds are backed by the U.S. government and guaranteed as to the timely payment of principal and interest. T Bills and government bonds are subject to interest rate and inflation risk and their values will decline as interest rates rise. These charts illustrate a graphical representation of the hypothetical growth of a dollar invested in certain funds. Performance is historical and does not guarantee future results. Time period chosen for comparison purposes only. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio nor do indices represent results of actual trading. Information from sources deemed reliable, but its accuracy cannot be guaranteed.
Average stock investor and average bond investor performances were used from a DALBAR study, Quantitative Analysis of Investor Behavior (QAIB), 03/2020. QAIB calculates investor returns as the change in assets after excluding sales, redemptions, and exchanges. This method of calculation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses, and any other costs. After calculating investor returns in dollar terms (above), two percentages are calculated: Total investor return rate for the period and annualized investor return rate. Total return rate is determined by calculating the investor return dollars as a percentage of the net of the sales, redemptions, and exchanges for the period. The fact that buy-and-hold has been a successful strategy in the past does not guarantee that it will continue to be successful in the future. Equities, bonds, and other asset classes have different risk profiles, which should be considered when investing. Bonds are subject to market and interest rate risk. Bond values will decline as interest rates rise and/or issuer’s creditworthiness declines, and are subject to availability and changes in price. Stock investing involves risks, including increased volatility (up and down movement in the value of your assets) and loss of principal.