May 2008
SAVING : INVESTING : PLANNING
Staying calm throughout the storm "Black Friday" — the day after Thanksgiving. You've seen the news: Hundreds of shoppers huddle outside the retailers' glass doors hours before sunrise. A tentative clerk unlocks the door, the mob surges forward, pushing the clerk aside in a mad rush toward giant piles of electronics, toys and gifts. The message is clear: Americans love a sale … Except, that is, when it comes to investing. For long-term investors, market downturns should be viewed as an opportunity: Everything is on sale. If on Black Friday, your $100 bought you not one sweater but two, wouldn't you feel savvy? The same thing happens in equities. Let's say you invest $100 into a hypothetical equity fund which buys 25 shares. When the market drops, your same $100 now buys 35 shares of that hypothetical fund. What a bargain! Still, people are drawn to that bottom line on their account statement. Their 401(k) now feels like it's been cut in half. But step back. Retirement investments are intended for the long term. Are you really going to take the money out of the market now? If you did, what would you do with it? Consider the following choices: Sell! If you sell your equities after the market has dropped, you are most likely going to incur a loss. Move it to cash. The Federal Open Market Committee ("The Fed") has been aggressively cutting interest rates. That means yields on passbook savings accounts, money markets and other interest paying savings vehicles are paying less and less. Reinvest when the markets recover. Are you so certain of your abilities that you'll know exactly when the bottom has happened? In taking your money out of equities and keeping it on the sidelines, you have a good chance of missing some of those single-day 300 or 400 point rallies in the Dow Jones Industrial Average. The reality is, markets fluctuate, markets drop and markets correct. The good news is that, historically, the markets have always eventually recovered. Remember the bust of 2000-2003, and the ensuing record-setting rally? Of course as we all know, past performance is no guarantee of future results. Your plan participants have someone to turn to when markets turn stormy: their financial advisor. They can receive education and financial guidance through a comprehensive suite of financial planning tools and more than 1,800 advisors nationwide. In many cases these services are available to plan participants at a reduced cost or no cost through exclusive arrangements with employers. For more information, please ask your participants to contact their financial advisor at 1-800-448-2542.	In This Issue: Keeping Your Balance AIG Retirement Announces Compliance Developments 1Q 2008 Market Commentary Contact Us Archives

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