14-0351 Personal Investor 1008 14-0351 Personal...
Transcript of 14-0351 Personal Investor 1008 14-0351 Personal...
PersonalInvestor Profile
P E R S O N A L I N V E S T O R P R O F I L E
THE PERSONAL INVESTOR PROFILE
is designed to help you develop an investment
approach that fits your individual financial goals.
This is the first step in the asset management
process and it will help us define important factors
such as your investment objectives, time horizon
and attitudes toward risk and investing.
The profile works to build the foundation for the second step in the asset management
process – determining an appropriate asset allocation. Based on your responses to
the following questions, the Personal Investor Profile will help you develop an asset
allocation strategy. You may find one of the five asset allocation models –
CONSERVATIVE, MODERATELY CONSERVATIVE, BALANCED, AGGRESSIVE AND VERY
AGGRESSIVE – appropriate for your investment needs, each with distinct risk and
return characteristics. Or if you like, you can create your own asset allocation mix.
RISK
RETU
RN
As you move from left to right on thegraph, there is a portfolio structure at each level that can offer potentially higherreturns. As with any type of portfoliostructuring, however, attempting to reducerisk and increase return could at certaintimes unintentionally reduce returns.
There is no guarantee that any of theportfolios or models in a product will meettheir stated goals or investment objectives.Investments are subject to market risk and loss of principal. The investment returnand principal value of an investment willfluctuate, and when redeemed, may beworth more or less than their original cost.
The Personal Investor Profile may not fully apply to participants in trusteed plans,due to the number of investment optionsmade available by the trustee.
ASSET ALLOCATION MODELS
Equities Fixed Income
MODERATE
CONSERVATIVE
AGGRESSIVE
Trim
4. Which of the following portfolio mixes best reflects yourinvestment comfort level?
9 Portfolio A – Significantly exceed inflation
with higher risk
7 Portfolio B – Moderately exceed inflation
with moderate risk
4 Portfolio C – Slightly exceed inflation with lower risk
2 Portfolio D – Just keeping pace with inflation
with little risk
5. Shown below are the potential performance returns of four hypothetical investment portfolios. Which investment portfolio would you be most comfortable owning?
2 Portfolio A 6% -5% 3%
4 Portfolio B 8% -7% -5%
7 Portfolio C 10% -12% -8%
9 Portfolio D 12% -20% -15%
6. How do you perceive your household’s future income potential?
2 Income will decrease
4 Income will basically stay the same
7 Income will grow slowly but steadily
9 Income will increase rapidly
AverageAnnualReturn
Worst Quarterly Return
Worst Annual Return
CIRCLE VALUE AND TOTAL NUMBERS
Now that you’ve completed the questionnaire, compare your total to the risk profile ranges.
RANGE OF SCORES PROFILE
17 - 34 Conservative Model
35 - 53 Moderately Conservative Model
54 - 72 Balanced Model
73 - 91 Aggressive Model
92 and over Very Aggressive Model
7. If you could increase your chances of improving your returnsby taking on more risk, would you be willing to:
2 Take a little risk with some of your money
4 Take a little risk with all of your money
7 Take a lot more risk with some of your money
9 Take a lot of risk with all of your money
8. Generally, investments with the highest potential for gains alsocarry the greatest risk of loss. The table below displays fourscenarios for various potential outcomes of $100,000 investedin four hypothetical portfolios over a five-year period. Withwhich portfolio are you most comfortable?
Possible Outcomes: $100,000 Invested for 5 Years
Best Case Worse Case
9 Portfolio A $275,000 $30,000
7 Portfolio B $225,000 $60,000
4 Portfolio C $175,000 $90,000
2 Portfolio D $125,000 $105,000
9. Your investment approach for this goal can be best described as:
2 Stability of principal with little, if any, chance you will
lose your original investment
4 High income with some risk to achieve income needs
7 Growth with income with moderate risk
9 Capital appreciation with higher risk for long-term growth
1. How many years will you invest before your money is needed to meet your financial goal?
1 Less than 3 Years
3 3 - 5 Years
6 5 - 10 Years
9 10 - 15 Years
11 More than 15 Years
2. Once you have reached that point in time, for how longwill you be making withdrawals from your investmentfor the financial goal?
1 I plan to take a one-time lump sum distribution
3 1 - 5 Years
6 5 - 10 Years
9 10 - 15 Years
11 More than 15 Years
3. Other secure assets that you own such as permanent cashvalue life insurance, pension, personal savings accounts,or other fixed interest assets form a substantial portion ofyour net worth:
11 Strongly Agree
9 Agree
6 Neutral
3 Disagree
1 Strongly Disagree
D E T E R M I N E YO U R I N V E S T M E N T O B J E C T I V E S A N D R I S K T O L E R A N C E
NAME PHONE COMPANY
STREET ADDRESS CITY/STATE/Z IP DATE
FORM COMPLETED BY (NAME/PHONE) CURRENT ACCOUNT BALANCE ANNUAL EXPECTED CONTRIBUTION
A S S E T A L L O C AT I O N M O D E L S
CONSERVATIVE ASSET ALLOCATION MODEL Conservative investors tend to be more interestedin safety of principal, liquidity and income, rather than in long-term growth or capitalappreciation. These investors are willing to accept lower returns for the potential to reduce volatility.
MODERATELY CONSERVATIVE ASSET ALLOCATION MODEL Moderately conservative investorsare interested in safety of principal, liquidity, and income, but also seek modest growth in thevalue of their investments. These investors are willing to take on a little more risk to achievethat growth, with the understanding that it may increase volatility.
BALANCED ASSET ALLOCATION MODEL Balanced investors are equally interested in safety ofprincipal and long-term growth. These investors generally want steady and sustained growthwithout the volatility that high-risk investments can bring.
AGGRESSIVE ASSET ALLOCATION MODEL Aggressive investors are primarily interested inlong-term growth and are willing to take reasonable risks to achieve it. These investors arecomfortable with the volatility that accompanies higher risk investments.
VERY AGGRESSIVE ASSET ALLOCATION MODEL Very aggressive investors are interested in higherpotential growth with greater volatility and are willing to take substantial risks to achieve it.
6% International2% Small Cap2% Mid Cap 8% Large Cap2% Real Estate Securities
12% International3% Small Cap5% Mid Cap
17% Large Cap3% Real Estate Securities
18% International5% Small Cap7% Mid Cap
25% Large Cap5% Real Estate Securities
24% International6% Small Cap
10% Mid Cap 34% Large Cap
6% Real Estate Securities
30% International8% Small Cap
12% Mid Cap 42% Large Cap
8% Real Estate Securities
4. Which of the following portfolio mixes best reflects yourinvestment comfort level?
9 Portfolio A – Significantly exceed inflation
with higher risk
7 Portfolio B – Moderately exceed inflation
with moderate risk
4 Portfolio C – Slightly exceed inflation with lower risk
2 Portfolio D – Just keeping pace with inflation
with little risk
5. Shown below are the potential performance returns of four hypothetical investment portfolios. Which investment portfolio would you be most comfortable owning?
2 Portfolio A 6% -5% 3%
4 Portfolio B 8% -7% -5%
7 Portfolio C 10% -12% -8%
9 Portfolio D 12% -20% -15%
6. How do you perceive your household’s future income potential?
2 Income will decrease
4 Income will basically stay the same
7 Income will grow slowly but steadily
9 Income will increase rapidly
Worst Annual Return
Now that you’ve completed the questionnaire, compare your total to the risk profile ranges.
RANGE OF SCORES PROFILE
17 - 34 Conservative Model
35 - 53 Moderately Conservative Model
54 - 72 Balanced Model
73 - 91 Aggressive Model
92 and over Very Aggressive Model
7. If you could increase your chances of improving your returnsby taking on more risk, would you be willing to:
2 Take a little risk with some of your money
4 Take a little risk with all of your money
7 Take a lot more risk with some of your money
9 Take a lot of risk with all of your money
8. Generally, investments with the highest potential for gains alsocarry the greatest risk of loss. The table below displays fourscenarios for various potential outcomes of $100,000 investedin four hypothetical portfolios over a five-year period. Withwhich portfolio are you most comfortable?
Possible Outcomes: $100,000 Invested for 5 Years
Best Case Worse Case
9 Portfolio A $275,000 $30,000
7 Portfolio B $225,000 $60,000
4 Portfolio C $175,000 $90,000
2 Portfolio D $125,000 $105,000
9. Your investment approach for this goal can be best described as:
2 Stability of principal with little, if any, chance you will
lose your original investment
4 High income with some risk to achieve income needs
7 Growth with income with moderate risk
9 Capital appreciation with higher risk for long-term growth
10. What best describes your investment philosophy whenyou invest in the stock market?
1 You have never invested in stocks
or stock mutual funds
3 Nervous – you usually sell when the market drops
6 Uncomfortable – you sometimes overreact
to market swings
9 Patient but concerned – you usually take a
“wait and see” attitude
11 Unaffected by short-term market movement
11. What do you find to be the strongest motivator forpurchasing bond investments?
1 You have never owned bonds or bond mutual funds
3 Safety of principal
6 Income
9 Predictability
11 Diversification
RISK PROFILE
TOTAL
D E T E R M I N E YO U R I N V E S T M E N T O B J E C T I V E S A N D R I S K T O L E R A N C E
NAME PHONE COMPANY
STREET ADDRESS CITY/STATE/Z IP DATE
FORM COMPLETED BY (NAME/PHONE) CURRENT ACCOUNT BALANCE ANNUAL EXPECTED CONTRIBUTION
A S S E T A L L O C AT I O N M O D E L S
CONSERVATIVE ASSET ALLOCATION MODEL Conservative investors tend to be more interestedin safety of principal, liquidity and income, rather than in long-term growth or capitalappreciation. These investors are willing to accept lower returns for the potential to reduce volatility.
MODERATELY CONSERVATIVE ASSET ALLOCATION MODEL Moderately conservative investorsare interested in safety of principal, liquidity, and income, but also seek modest growth in thevalue of their investments. These investors are willing to take on a little more risk to achievethat growth, with the understanding that it may increase volatility.
BALANCED ASSET ALLOCATION MODEL Balanced investors are equally interested in safety ofprincipal and long-term growth. These investors generally want steady and sustained growthwithout the volatility that high-risk investments can bring.
AGGRESSIVE ASSET ALLOCATION MODEL Aggressive investors are primarily interested inlong-term growth and are willing to take reasonable risks to achieve it. These investors arecomfortable with the volatility that accompanies higher risk investments.
VERY AGGRESSIVE ASSET ALLOCATION MODEL Very aggressive investors are interested in higherpotential growth with greater volatility and are willing to take substantial risks to achieve it.
5% High Yield Bonds60% Bonds15% Cash/Cash
Equivalents
3% High Yield Bonds37% Bonds
1% High Yield Bonds19% Bonds
6% International2% Small Cap2% Mid Cap 8% Large Cap2% Real Estate Securities
12% International3% Small Cap5% Mid Cap
17% Large Cap3% Real Estate Securities
18% International5% Small Cap7% Mid Cap
25% Large Cap5% Real Estate Securities
24% International6% Small Cap
10% Mid Cap 34% Large Cap
6% Real Estate Securities
30% International8% Small Cap
12% Mid Cap 42% Large Cap
8% Real Estate Securities
Investors should be aware of the risks ofinvestments in foreign securities, particularlyinvestments in securities of companies indeveloping nations. These include the risksof currency fluctuation, of political andeconomic instability and of less well-developed government supervision andregulation of business and industry practices,as well as differences in accounting standards.
Investing in smaller or newer or mid-sizedcompanies is more likely to realize moresubstantial growth as well as suffer moresignificant losses than larger or moreestablished companies. Investments insuch companies can be both more volatileand more speculative.
Investing in small company stocks involvesa greater degree of risk than investing inmedium or large company stocks. Theirsecurities may also trade less frequently andand in lower volume, making their marketprices more volatile.
Equity REITs may be affected by changes inthe value of the underlying property ownedby the trust, while mortgage REITs may beaffected by the quality of any credit extended.Such funds are subject to some of the risksassociated with direct ownership of realestate, including market value declines, risks related to general and local economicconditions and increases in interest rates.
Bonds and other debt obligations are affectedby changes in interest rates, inflation riskand the creditworthiness of their issuers.Bond funds have the same interest rate,inflation and credit risks that are associatedwith the underlying bonds owned by the Fund.High yield bonds generally have greater price swings and higher default risks thaninvestment grade bonds. Return of principalis not guaranteed. With a fixed income fund,when interest rates rise, the value of thefund's existing bonds drops, which couldnegatively affect overall fund performance.In contrast to owning individual bonds, thereare ongoing fees and expenses associatedwith owning shares of bond funds.
An investment in a Money Market Portfoliois not insured or guaranteed by the FederalDeposit Insurance Corporation or any othergovernment agency. Although a MoneyMarket Portfolio seeks to preserve thevalue of your investment at $1.00 pershare,it is possible to lose money byinvesting in a Money Market Portfolio.
Now that you’ve completed the questionnaire, compare your total to the risk profile ranges.
10. What best describes your investment philosophy whenyou invest in the stock market?
1 You have never invested in stocks
or stock mutual funds
3 Nervous – you usually sell when the market drops
6 Uncomfortable – you sometimes overreact
to market swings
9 Patient but concerned – you usually take a
“wait and see” attitude
11 Unaffected by short-term market movement
11. What do you find to be the strongest motivator forpurchasing bond investments?
1 You have never owned bonds or bond mutual funds
3 Safety of principal
6 Income
9 Predictability
11 Diversification 4% High Yield Bonds56% Bonds
Trim
P R O F I L E
The Northwestern Mutual Financial Network is a marketing name for the sales and distribution arm of the Northwestern Mutual Life InsuranceCompany, its affiliates and subsidiaries. The products and services referenced are offered and sold only by appropriately appointed and licensedentities and Network Representatives.
The Northwestern Mutual Life Insurance Company, Milwaukee, WI., (life insurance, disability insurance and annuities) is neither a registeredinvestment advisor nor a registered broker-dealer.
Securities are offered through Northwestern Mutual Investment Services, LLC (NMIS), Suite 600, 611 Wisconsin Avenue, Milwaukee, Wis., 53202,1-866-664-7737, member of FINRA and SIPC.
You should carefully consider the investment objectives, risks, expenses and charges of the investment companybefore you invest. Your Northwestern Mutual Investment Services Registered Representative can provide you witha contract and fund prospectus that will contain the information noted above, and other important informationthat you should read carefully before you invest or send money.
The Northwestern Mutual Life Insurance Company • Milwaukee, WIwww.nmfn.com
14-0351 (0599) (REV 1008)