Advisor Tool Kit
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Transcript of Advisor Tool Kit
Advisor Tool Kit
What Has History Shown Us
• Since World War II, the S&P 500 has experienced a minimum 15% decline 13 times
• The shortest bottom to peak cycle: Less than 3 months
• The longest bottom to peak cycle: Nearly 6 years, with a full fledged bear market in between
• Average bottom to peak cycle: Almost 19 months
• 75% of the market recovery generally occurs within the first 7 months.
Peak BottomReturn to
Peak
Months (Peak -Peak)
Months (Bottom -
Peak)5/29/1946 10/9/1946 6/9/1950 48.39 44.026/15/1948 6/13/1949 1/9/1950 18.84 6.908/2/1956 10/22/1957 9/24/1958 25.71 11.08
12/12/1961 6/26/1962 9/3/1963 20.71 14.302/9/1966 10/7/1966 5/5/1967 14.79 6.90
11/29/1968 5/26/1970 3/6/1972 39.12 21.271/11/1973 10/3/1974 7/17/1980 90.21 69.509/21/1976 3/6/1978 8/15/1979 34.78 17.33
11/28/1980 8/12/1982 11/3/1982 23.18 2.768/25/1987 12/4/1987 7/26/1989 23.05 19.737/16/1990 10/11/1990 2/13/1991 6.97 4.117/17/1998 8/31/1998 11/23/1998 4.24 2.763/24/2000 4/4/2001 ??? ??? ???
Bear Markets Since World War II
What Are the Markets Doing Now?
• The S&P 500 fell 28% from its high in March 2000 to its recent low in April.
• Since April 2001, the S&P 500 has recovered nearly one-third of its losses.
• Despite its recent rebound, the S&P 500 is still down nearly 20% from its March 2000 high.
• While the Nasdaq has bounced back from its bottom, it is still off nearly 60% from its peaks.
Performance of Nasdaq and S&P 500 (Index: 1/1/2000 = 100)
40
50
60
70
80
90
100
110
120
130
Jan-
00F
eb-0
0M
ar-0
0A
pr-0
0M
ay-0
0Ju
n-00
Jul-0
0A
ug-0
0S
ep-0
0O
ct-0
0N
ov-0
0D
ec-0
0Ja
n-01
Feb
-01
Mar
-01
Apr
-01
May
-01
Jun-
01
S&P 500
Nasdaq
January 2000 – June 2001
Ind
ex:
1/1/
00 =
100
The Road to Recovery
• Stock market recoveries are rarely a straight line
• Recoveries typically include down months, even down quarters:
• 19741974: The S&P posted two periods of significant declines when emerging from the Oil Crisis
• 19981998: The S&P stumbled several times before eclipsing 1300 for the first time in history.
• The markets have rewarded patience. The market has recovered from each downturn to reach new heights.
The Rugged Rise to Recovery
S&P 500 Index (8/31/98 - 3/31/99)
900
1000
1100
1200
1300
1400
Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 Jan-99 Feb-99 Mar-99
Down 10%
Down 4%
Down 4%
S&P 500 Index (10/3/74 to 5/2/75)
60
65
70
75
80
85
90
95
Oct-74 Nov-74 Dec-74 Jan-75 Feb-75 Mar-75 Apr-75
Down 14%
Down 7%
Date
Date
Ind
ex
Ind
ex
Remember Our Process
Planning Process
CustomPortfolio
ManagerSelection
RebalancingReallocation
Monitoring& Reporting
Establishes GoalsSets Risk Limits
Sets Long Term TargetSets Short Term LimitsTax Management
Low Cost VehicleSpecialist Managers
MaintainsObjectives
A Scientific Approach toDisciplined Investing
Keeps YouInformed and On Track
The Benefits of Our Process
1. Asset Allocation and A Disciplined Approach Works
2. SEI continues to supervise manager selection and replacement
2. SEI portfolios strive to keep internal expenses low
Why You Should “Stay the Course”1. I am personally committed to making sure each of my clients
makes it through these turbulent times and I still am!
2. Our planning process and investment philosophy remain sound and I am confident that if we stick to our original plan we can still achieve your long-term goals. Overall, the picture has improved significantly.
3. Staying fully invested may keep you positioned for a market rebound, which we may have just seen happen.
4. This decline like every other will pass with time. Selling while your portfolio is down only locks in your current losses. This is still absolutely true!
Disclosures
1. These slides have been furnished by SEI Investments Distribution Co., which acts as distributor for the SEI Family of Funds. These slides are not intended to be an offer to sell or a solicitation of an offer to buy shares of any of the other funds or fund families described herein.
2. For those SEI Funds which employ the “manager of manager” structure, SEI Investments Management Corporation has ultimate responsibility for the investment performance of the Fund due to its responsibility to oversee the sub-advisors recommend their hiring, termination and replacement.
3. Mutual Fund shares are not insured by the FDIC or any other agency, and are not guaranteed by any financial institution, are not obligations of any financial institution, and involve risks, including possible loss of principal.
4. In addition to the normal risks associated with equity investing, international investing may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principals or from economic or political instability in other nations.
5. Past performance is no guarantee of future results. 6. Investments in high yield bonds can experience higher volatility and increased credit
risk when compared to other fixed income instruments. 7. This presentation must be preceded or accompanied by a current prospectus for the SEI
funds. Investors should read the prospectus carefully before investing or sending money.