actions you can take in volatile market linkedin

Financial planning services and investments offered through Ameriprise Financial

Services, Inc. Member FINRA and SIPC. © 2008 Ameriprise Financial, Inc. All rights reserved.

Actions You Can Take in a Volatile MarketNow more than ever, you need a plan

Benjamin Glover

Today’s agenda

How we arrived where we are today

Putting today’s markets in historical perspective

Fundamental investment strategies to help you deal with

and even find opportunity in volatile markets

Managing emotions as part of the investment process

Steps to consider taking now

Ameriprise Financial

What we learned in our 110-year history

More people come to Ameriprise Financial for

financial planning than any other company*

Ameriprise is America’s largest financial

planning company*

* Based on the number of financial plans annually disclosed in Form ADV, Part 1A, Item 5, available at adviserinfo.sec.gov as of December 31, 2007, and the

number of CFP® professionals documented by the Certified Financial Planner Board of Standards, Inc.

Our four cornerstones

What’s been driving recent

market volatility?

An oversupply of lending which drove up home values and

resulted in the eventual collapse of the U.S. housing market

Repercussions from the subprime mortgage crisis which

spread to global capital markets

The residual impact of the current credit crisis and the

follow-on effect it has had on the global economy

I read the news today

> Real estate prices collapse

> Largest one-day loss in the Dow

Jones Industrial Average

> Sub-prime bond market collapses,

real estate continues to decline, credit

dries up, savings institutions weaken

> Government bailout is enacted.

Billions of taxpayer dollars spent to

deal with failing lending institutions

> Recession sets in leading to

another stock market decline

1987-1991

Crisis events and subsequent

market performance

Source: Ned Davis Research

Past performance is not a guarantee of future results.

A familiar pattern

Dow Jones Industrial Average (Monthly)

Copyright © 2008 Thechartstore.com

Past performance is not a guarantee of future results. The Dow Jones Industrial Average is an unmanaged index that follows the returns of 30 well-established

American companies, and is frequently used as a general measure of market performance. The index reflects reinvestment of all distributions and changes in the

market prices, but excludes brokerage commissions and other fees. It is not possible to invest directly in an index.

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

1926 1940 1960 1980 2000

The ―flaw‖ of averages

S&P 500 Annual Returns 1926-2007

Ibbotson. Calendar year total returns of S&P 500 Index assuming reinvestment of all dividends and capital gains. The S&P 500 Index is an unmanaged index

commonly used to measure stock performance. It is not possible to invest directly in an index. Past performance is not a guarantee of future results.

Measuring volatility

S&P 500 stock index 1976-2007:

Average return is about 14%

Standard deviation (volatility) has

been about 15%

Range of returns is about 44% to -17%

14%

29%

44%

-2%

-17%

The S&P 500 Index is an unmanaged index commonly used to measure stock performance. It is not possible to invest directly in an index. Past performance is not a

guarantee of future results.

The stock market has delivered over

the long term

From 1966 through 2007, the S&P 500 has returned an average of 10.2% per year

Returns in a given calendar year ranged from -26% to +37%

Below -20% -20% – -10% -10% – 0% 0% – +10% +10% – +20% Over +20%

2002 2001 2000 2007 2006 2003 1983

1974 1973 1990 2005 2004 1999 1982

1966 1981 1994 1988 1998 1980

1977 1993 1986 1997 1975

1969 1992 1979 1996 1967

1987 1976 1995

1984 1972 1991

1978 1971 1989

1970 1968 1985

Source: Ned Davis Research.

Standard & Poor’s 500 Index. It is not possible to invest directly in an index. Standard & Poor's 500 Index (S&P 500 Index) is an unmanaged list of common

stocks which includes 500 large companies, and is frequently used as a general measure of market performance. The index reflects reinvestment of all

distributions and changes in the market prices, but excludes brokerage commissions or other fees.

Past performance is not a guarantee of future results.

Historical range of returns of S&P 500:

1970-2008*

1 year 5 years 10 years 20 years

61.18

29.63 19.21 18.26

9.94

2.88-3.77

-38.94

The Standard & Poor’s 500 Market Index (S&P 500) is an unmanaged list of common stocks frequently used as a measure of market performance. The index reflects

reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. The highest return is represented by the top of

each bar and the lowest annual return is shown at the bottom. The rolling 5-,10- and 20-year ranges are also shown. Over time, lower performing years will be offset

by higher performing years and vice versa. Therefore the range of the historical returns over the entire period is narrower than the range of returns in any single year.

Returns over 1 year in length are annualized. It is not possible to invest directly in an index. Past performance is no guarantee of future results.

Returns by decade

Decade# of years

down# of years up 0–18%

# of years up 18%+

Average annual return for decade

1920s 3 2 5 8.77%

1930s 6 0 4 -0.05%

1940s 3 2 5 9.17%

1950s 2 2 6 19.35%

1960s 3 4 3 7.81%

1970s 3 3 4 5.86%

1980s 1 3 6 17.55%

1990s 1 3 6 18.20%

Average 2.75 2.375 4.875 10.83%

1920s 3 2 5 8.77%

1930s 6 0 4 -0.05%

1940s 3 2 5 9.17%

1950s 2 2 6 19.35%

1960s 3 4 3 7.81%

1970s 3 3 4 5.86%

1980s 1 3 6 17.55%

1990s 1 3 6 18.20%

Average 2.75 2.375 4.875 10.83%

Source: Ibbotson. S&P 500 Index returns assume reinvestment of all dividends and capital gains. The S&P 500 Index is an unmanaged index commonly used to

measure stock market performance. It is not possible to invest directly in an index. Past performance is not a guarantee of future results.

Where we stand in the current decade

-9.10%

30

25

20

15

10

5

0

-5

-10

-15

-20

-25

-11.88%

-22.9%

28. 37%

10.87%

4.91%

15.79%

5.49%

?

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

?

Source: S&P Fact Book. Annual Returns of S&P 500 Index, 2000-2007, assuming reinvestment of dividends. The average annual total return for the period 12/31/99

to 12/31/07 was 3%. The S&P 500 Index is an unmanaged index commonly used to measure stock market performance. It is not possible to invest directly in an

index. Past performance is not a guarantee of future results.

Comparing this decade to others

Annualized performance of the S&P 500

19.35%

20s 30s 40s 50s 60s 70s 80s 90s 00s(1925 – 1929) (2000 – 2007)

8.77%

-0.05%

9.17%7.81%

5.86%

17.55%

1.66%

18.20%20

15

10

5

0

-5

Source: Ibbotson. S&P 500 Index returns assume reinvestment of all dividends and capital gains. The S&P 500 Index is an unmanaged index commonly used to

measure stock market performance. It is not possible to invest directly in an index. Past performance is not a guarantee of future results.

Markets don’t move in a linear fashion

Stocks tend to bounce back after five-year periods of negative performance

-5.10%

-11.24%-12.47%

-9.93%-7.51%

-2.36%-0.20% -0.59% -.057%

-2.29%

22.47%

14.29%

10.67% 10.91%

17.87%

14.76% 14.10% 12.83%

25

20

15

10

5

0

-5

-10

-151927–1931

1932–1936

1929–1933

1933–1937

1929–1933

1934–1938

1930–1934

1935–1939

1937–1941

1942–1946

1970–1974

1975–1979

1973–1977

1978–1982

1998–2002

2003–2007

1999–2003

2000–2004

2004–2008

Source: Ibbotson. Losses are based on Large-Capitalization U.S. Stocks, based on annualized performance of the Standard & Poor's 500® Index through the

five calendar-year periods ending on the dates shown. Returns assume reinvestment of all dividends and capital gains. It is not possible to invest directly in an

index. Standard & Poor's 500 Index (S&P 500 Index) is an unmanaged list of common stocks which includes 500 large companies, and is frequently used as a

general measure of market performance. The index reflects reinvestment of all distributions and changes in the market prices, but excludes brokerage

commissions or other fees. Past performance is not a guarantee of future results.

Long-term investing strategies

Diversify to manage business, market, and interest rate risk

Rebalance your portfolio if it is appropriate

Consider the current and future tax ramifications of

your actions

Dollar-cost average to keep your investment strategy

on track

Manage your emotions by following a disciplined plan based

on solid fundamentals, not emotion

*Data as of 12/31/07. The table above shows how various asset

classes and a hypothetical diversified portfolio based upon equal

weighting of each of the asset classes have performed from 2000–

2007. Sources: Lipper, Inc., Thomson/InvestmentView and Wilshire

REIT Index. Past performance does not guarantee future results.

Diversification helps you spread risk throughout your portfolio, so

investments that do poorly may be balanced by others that do

relatively better. Diversification and asset allocation do not

guarantee overall portfolio profit and do not protect against loss. The

above performance is not intended to represent any specific

investment. It is not possible to invest directly in any of the

unmanaged indices shown above. All performance shown assumes

reinvestment of interest and does not include the expenses of

managing a mutual fund. Every investor has unique goals and

tolerance for risk. Russell 1000® Growth Index measures the

performance of the 1,000 largest companies in the Russell 3000

Index with higher price-to-book ratios and higher forecasted growth

values. Russell 1000® Value Index measures the performance of the

1,000 largest companies in the Russell 3000 Index with lower price-

to-book ratios and lower forecasted growth values. MSCI EAFE

Index is designed to measure the performance of the developed

stock markets of Europe, Australia and the Far East, weighted by

capitalization. Russell 2000® Value Index contains those Russell

2000 securities with lower price-to-book ratios. Russell 2000®

Growth Index contains those Russell 2000 securities with higher

price-to-book ratios. Russell Midcap® Index consists of the smallest

800 companies in the Russell 1000 Index, as ranked by total market

capitalization. Lehman Brothers High Yield Bond Index covers the

universe of fixed rate, non-investment grade debt. The Index

includes both corporate and noncorporate sectors. Lehman Brothers

Aggregate Bond Index is composed of corporate, U.S. Government,

mortgage-backed and Yankee bonds with an average maturity of

approximately 10 years. Wilshire REIT Index is an unmanaged

group of publicly-traded real estate investment trusts. Diversified

Portfolio assumes quarterly rebalancing and an equal weighting in

each of the listed indices. This is for illustrative purposes only and

does not reflect the performance of any specific investment.

n Large Cap Growth: Russell 1000® Growth Index

n Large Cap Value: Russell 1000® Value Index

n Int’l Stocks: MSCI EAFE Index

n Small Cap Value: Russell 2000® Value Index

n Small Cap Growth: Russell 2000® Growth Index

n Mid Cap Stocks: Russell Mid Cap® Index

n High Yield Bonds: Lehman Brothers High Yield Bond

Index

n Bonds: Lehman Brothers Aggregate Bond Index

n Real Estate: Wilshire REIT Index

n Diversified Portfolio: Hypothetical portfolio with quarterly

rebalancing and an equal weighting in each of the

indices listed

REAL

ESTATE

31.04%

SMALL CAP

VALUE

22.83%

BONDS

11.63%

MID CAP

STOCKS

8.25%

LARGE CAP

VALUE

7.01%

DIVERSIFIED

PORTFOLIO

1.14%

HIGH YIELD

BONDS

-5.86%

INT’L

STOCKS

-13.96%

LARGE CAP

GROWTH

-22.42%

SMALL CAP

VALUE

14.02%

REAL

ESTATE

12.35%

BONDS

8.44%

HIGH YIELD

BONDS

5.28%

DIVERSIFIED

PORTFOLIO

-1.87%

LARGE CAP

VALUE

-5.59%

MID CAP

STOCKS

-5.62%

LARGE CAP

GROWTH

–20.42%

INT’L

STOCKS

-21.21%

BONDS

10.25%

REAL

ESTATE

3.58%

HIGH YIELD

BONDS

-1.41%

SMALL CAP

VALUE

-11.43%

DIVERSIFIED

PORTFOLIO

-11.74%

LARGE CAP

VALUE

-15.52%

INT’L

STOCKS

-15.66%

MID CAP

STOCKS

-16.19%

LARGE CAP

GROWTH

-27.88%

SMALL CAP

GROWTH

48.54%

SMALL CAP

VALUE

46.03%

MID CAP

STOCKS

40.06%

INT’L

STOCKS

39.17%

REAL

ESTATE

36.18%

DIVERSIFIED

PORTFOLIO

33.58%

LARGE CAP

VALUE

30.03%

LARGE CAP

GROWTH

29.75%

HIGH YIELD

BONDS

28.97%

BONDS

4.10%

REAL

ESTATE

33.16%

SMALL CAP

VALUE

22.25%

INT’L

STOCKS

20.70%

MID CAP

STOCKS

20.22%

DIVERSIFIED

PORTFOLIO

16.63%

LARGE CAP

VALUE

16.49%

HIGH YIELD

BONDS

11.13%

LARGE CAP

GROWTH

6.30%

BONDS

4.34%

INT’L

STOCKS

14.02%

REAL

ESTATE

13.82%

MID CAP

STOCKS

12.65%

DIVERSIFIED

PORTFOLIO

7.46%

LARGE CAP

VALUE

7.05%

LARGE CAP

GROWTH

5.26%

SMALL CAP

VALUE

4.71%

HIGH YIELD

BONDS

2.74%

BONDS

2.43%

REAL

ESTATE

35.97%

INT’L

STOCKS

26.86%

SMALL CAP

VALUE

23.48%

LARGE CAP

VALUE

22.25%

DIVERSIFIED

PORTFOLIO

17.97%

MID CAP

STOCKS

15.26%

HIGH YIELD

BONDS

11.85%

LARGE CAP

GROWTH

9.07%

BONDS

4.33%

LARGE CAP

GROWTH

11.81%

INT’L

STOCKS

11.63%

BONDS

6.97%

MID CAP

STOCKS

5.60%

DIVERSIFIED

PORTFOLIO

2.19%

HIGH YIELD

BONDS

1.87%

LARGE CAP

VALUE

-0.17%

SMALL CAP

VALUE

-9.78%

REAL

ESTATE

-17.55%

SMALL CAP

GROWTH

-22.43%

SMALL CAP

GROWTH

-9.23%

SMALL CAP

GROWTH

-30.26%

SMALL CAP

GROWTH

14.31%

SMALL CAP

GROWTH

4.15%

SMALL CAP

GROWTH

13.35%

SMALL CAP

GROWTH

7.05%

2000 2001 2002 2003 2004 2005 2006 2007*

Historic volatility by standard deviation

S&P 500 Stock Index

1976-2007 14%

29%

44%

-2%

-17%

Lehman Aggregate

Bond Index 1976-2007

Stocks

Bonds23%

16%

9%

2%

-6%

Past performance is not a guarantee of future results. Lehman Brothers Aggregate Bond Index, an unmanaged index, is made up of a representative list of

government, corporate, asset-backed and mortgage-backed securities. The index is frequently used as a general measure of bond market performance. Standard &

Poor's 500 Index (S&P 500 Index), an unmanaged list of common stocks, is frequently used as a general measure of market performance. The index reflects

reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. You can not invest directly in an index.

Diversification options

Asset classes (stocks, bonds, cash, real estate, etc.)

Investment products (e.g. mutual funds, annuities, ETFs)

Tax characteristics (taxable, tax-deferred, tax-free)

Diversification does not guarantee overall portfolio profit or protect against loss in declining markets.

Expected risk and return in any

single year

50% stocks/

50% bonds

This hypothetical example is provided for illustrative purposes only. It is not intended to represent the performance of a specific investment or investment strategy.

Investment products involve risks including possible loss of principal and fluctuation in value.

On occasion returns may occur

above this point

On occasion returns may occur

below this point

Most of the time returns may

fall into this range

Some of the time returns may

fall into this range

Some of the time returns may fall

into this range

31.2%

19.8%

8.4%

-3%

-14.4%

65% stocks/

35% bonds

25.5%

16.6%

7.7%

-1.2%

-10.1%

Diversification can temper

market volatility

Performance of Stocks, Bonds and 50/50 Mix 1988 to 2007

50%

40%

30%

20%

10%

0%

-10%

-20%

-30%

1988 1998 2007

Past performance does not guarantee future results. These examples do not reflect sales charges, taxes or other costs associated with investing. Lehman

Brothers Aggregate Bond Index, an unmanaged index, is made up of a representative list of government, corporate, asset-backed and mortgage-backed

securities. The index is frequently used as a general measure of bond market performance. Standard & Poor's 500 Index (S&P 500 Index), an unmanaged list

of common stocks, is frequently used as a general measure of market performance. The index reflects reinvestment of all distr ibutions and changes in market

prices, but excludes brokerage commissions or other fees. You can not invest directly in an index.

S&P 500 Index 50/50 MixLehman Brothers Aggregate Bond Index

Rebalancing can keep you on plan

Initial allocation Rebalance backOne year later

50%

Bonds

50%

Stocks

50%

Stocks

50%

Bonds

40%

Bonds

60%

Stocks

Dollar-cost averaging – price rises

Average price: $15.00

Average cost: $14.19

Invested amount: $6,000.00

Ending value: $8,456.40

Dollar-cost averaging does not guarantee a profit or protect against losses in a declining market. Investors should consider their ability to continue investing

during periods of low markets. This illustration is hypothetical and is not a forecast or guarantee of specific investment results.

$25

$20

$15

$10

$5

$0

1 2 3 4 5 6

Dollar-cost averaging – market down,

then recovers


Average cost: $13.85





$25

$20

$15

$10

$5

$0

1 2 3 4 5 6

Dollar-cost averaging – market down,

partial rebound


Average cost: $9.73





$25

$20

$15

$10

$5

$0

1 2 3 4 5 6

Three different markets —

three positive results

Total invested – $6,000 in monthly $1,000 increments



$10,000

$7,500

$5,000

Market goes up

$8,456

Market down:

full recovery

$8,667

Market down:

partial recovery

$6,167

Understanding emotional investing

Optimism

Relief

Hope―Things may be turning around.‖

Excitement

Thrill

Optimism

―Wow, I am

making money.

I feel good

about this

investment.‖

Euphoria Point of maximum financial risk

Fear

Denial―This is just a temporary setback.‖

Desperation

Anxiety

Panic

Capitulation

Despondency

―I think I need to sell.‖

Depression

Point of maximum financial opportunity

Source: Radarwire.com. A product of Simon Economic Systems, Ltd.

The average equity investor lags

the market

Equity market returns v. equity mutual fund investors’ returns

0%

4%

8%

12%

16%

Source: Dalbar, Inc., 2007 Quantitative Analysis of Investor Behavior for the period (1986 - 2006). Benchmark returns represented by total returns of the S&P 500.

The Standard & Poor’s 500 Stock Market Index (S&P 500) is an unmanaged list of common stocks frequently used as a measure of market performance. You can

not invest directly in an index.

S&P 500 Index

11.8%

4.3%3.0%

Average equity

Fund investor

Inflation

How emotion can put investors on

the wrong path

Net inflows to equity mutual funds and subsequent

5-year returns

YearNet flows

(in $ billions)

5-year Avg.

Annual Return

1988 -$14.9 15.88%

2000 +$309.4 -2.30%

2002 -$27.6 6.19%

Source: Net inflows from Investment Company Institute. 5-year AATR represents total return of S&P 500 for five year period beginning in the year listed.

No taxes or fees are assumed. It is not possible to invest directly in the index.

Benefits of a personalized financial plan

Focuses on your goals, not short-term market conditions

Assesses your risk tolerance

Employs time-tested disciplines to dampen market

volatility, such as rebalancing, dollar-cost averaging and opportunity

purchases

Takes taxes into consideration

Helps you neutralize the inclination to make emotional investment

decisions

Provides for review and rebalancing on a regular basis

A financial plan can help you feel more on track during

market turmoil*

*The Financial Planning Association® (FPA®) and Ameriprise® Value of Financial Planning Study, was conducted by Harris Interactive in June/July, 2008

among 3,022 adults. While market volatility was significant during the study period, subsequent financial developments, which may have affected

attitudes and behaviors, had not yet occurred. No estimates of theoretical sampling error can be calculated; a full methodology is available.

Steps you can take

Saving and Building

Market volatility may be a new

experience for you

Your portfolio may be heavily

weighted in equities

You may feel tempted to sit on the

sidelines for awhile until things

settle down

Smart choices in uncertain times

Stay invested so you don’t miss out on the upside

Dollar-cost average through your workplace retirement plan

Diversify your portfolio

Have a cash reserve

Missing the best days

S&P 500 Index 1977 - 2007

For illustrative purposes. The index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other

fees. The chart shows the S&P 500 total return. Dividends are reinvested. It is not possible to invest directly in an index. Source: Ned Davis Research, Inc.

All 7,571 Trading Days

Miss the Best 10 Days




0% 5% 10% 15%

12.90%

10.88%

9.40%

8.09%

6.89%

The benefits of diversification

Initial investment: $10,000

Hypothetical example. Rate of return is for illustration purposes only and is not meant to represent any specific investment. Yields are hypothetical compounded rates of return. The actual value and returns on most investments will fluctuate. It does not take into account any federal or state taxes that may apply. Diversification and asset allocation help spread risk throughout your portfolio, so that investments that do poorly may be balanced by others that do relatively better. Diversification and asset allocation do not guarantee overall portfolio profit or protect against loss in declining markets.

6%

8%

12%

4%

Ben Kent

8%

LOSE

The benefits of diversification

25 years later, Kent has earned $23,367 more

Hypothetical example. Rate of return is for illustration purposes only and is not meant to represent any specific investment. Yields are hypothetical compounded rates of return. The actual value and returns on most investments will fluctuate. It does not take into account any federal or state taxes that may apply.

6%

$42,919

8%

12%

$66,286

4%

$42,500

$17,121

$6,665

Ben Kent

8%

*The Financial Planning Association® (FPA®) and Ameriprise® Value of Financial Planning Study, was conducted by Harris Interactive in June/July, 2008 among

3,022 adults. While market volatility was significant during the study period, subsequent financial developments, which may have affected attitudes and

behaviors, had not yet occurred. No estimates of theoretical sampling error can be calculated; a full methodology is available.

Preparing and protecting

You’ve experienced market

volatility before

Though time is still your ally,

retirement is closer so you have

less time to recover

You feel challenged to protect what

you have and grow your wealth

Smart moves in uncertain times

Rebalance your portfolio

Re-assess your risk tolerance

Reduce portfolio volatility

Raise cash to fill up reserves

Plan for five key risks in retirement and your

withdrawal strategy

Be flexible

Five key risks your retirement plan

should address

Market volatility

Longevity

Tax risks

Health care

Unexpected events

The Ameriprise Financial Retirement

Income Framework

Ameriprise Bank, FSB, member FDIC, provides certain deposit and lending products and services for Ameriprise Financial Services, Inc. Ameriprise Bank, FSB

products are FDIC-insured to at least $250,000 per depositor. Investment products, including shares of mutual funds, are not federally or FDIC-insured, are not

deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value. The

Ameriprise ONE® Financial Account is a brokerage account with cash management features. Investments, brokerage and investment advisory services are made

available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.

Sources of

Income

Short-Term Assets

Long-Term

AssetsContingent

Cash Flows

LegacyDreamsNeeds

Paycheck

Cash HubAmeriprise ONE®

Financial Account

Determining a safe rate of withdrawal

Portfolio of 50% stocks/50% intermediate-term bonds

For illustrative purposes only. Ameriprise Financial cannot guarantee financial results.

Source: Ibbotson Presentation Materials, © 2005 Ibbotson Associates, Inc. All rights reserved. Used with permission. Each hypothetical portfolio has an initial

starting value of $500,000. It is assumed that a person retires on December 31, 1972, and withdraws an inflation-adjusted percentage of the initial portfolio wealth

($500,000) each year beginning in 1973. Each monthly withdrawal is adjusted for inflation. Each portfolio is rebalanced monthly. Government bonds are guaranteed

by the full faith and credit of the United States government as to the timely payment of principal and interest, while stocks are not guaranteed and have been more

volatile than the other asset classes. Sources of information:

Stocks: Standard & Poor’s 500®, which is an unmanaged group of securities and is considered to be representative of the stock market in general; bonds: five-year

U.S. Government Bond; inflation: Consumer Price Index.

1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

$1,600,000

$1,400,000

$1,200,000

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0

Withdrawal Rates

9%

8%

7%

6%

5%

4%

An individual who began taking inflation-adjusted withdrawals

of 5% at age 65 in 1972 would have seen their portfolio last

until approximately 1995 at age 88.

*The Financial Planning Association® (FPA®) and Ameriprise® Value of Financial Planning Study, was conducted by Harris Interactive in June/July, 2008 among

3,022 adults. While market volatility was significant during the study period, subsequent financial developments, which may have affected attitudes and

behaviors, had not yet occurred. No estimates of theoretical sampling error can be calculated; a full methodology is available.

Accessing and preserving

your money

Your retirement security is

challenged by market volatility

Portfolio losses can leave a lasting

mark in retirement

You might think that stocks are no

longer appropriate for your portfolio

Smart moves in uncertain times

Know your risk tolerance

Be realistic about your withdrawals

Understand the impact of volatile markets

Maintain a sufficient cash reserve

Plan for the unexpected

Be flexible

The impact of volatility on income portfolios

Beginning value $100,000

YearAnnual return

End value w/$5,000 withdrawals*

1 20% $114,000

2 6% $115,540

3 0% $110,540

4 -6% $99,208

5 -20% $75,366

Sarah starts retirement Bill starts retirement

YearAnnual return


1 -20%

2 -6%

3 0%

4 6%

5 20%

YearAnnual return


1 -20% $76,000

2 -6% $66,740

3 0% $61,740

4 6% $60,144

5 20% $66,173

Distributions occur at the beginning of each year. This illustration is hypothetical and is not meant to represent any specif ic investment.

The Ameriprise Financial Retirement

Income Framework

Ameriprise Bank, FSB, member FDIC, provides certain deposit and lending products and services for Ameriprise Financial Services, Inc. Ameriprise Bank, FSB

products are FDIC-insured to at least $250,000 per depositor. Investment products, including shares of mutual funds, are not federally or FDIC-insured, are not

deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value. The

Ameriprise ONE® Financial Account is a brokerage account with cash management features. Investments, brokerage and investment advisory services are made

available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.

Sources of

Income

Short-Term Assets

Long-Term

AssetsContingent

Cash Flows

LegacyDreamsNeeds

Paycheck

Cash HubAmeriprise ONE®

Financial Account

Determining a safe rate of withdrawal

Portfolio of 50% stocks/50% intermediate-term bonds


Source: Ibbotson Presentation Materials, © 2005 Ibbotson Associates, Inc. All rights reserved. Used with permission. Each hypothetical portfolio has an initial

starting value of $500,000. It is assumed that a person retires on December 31, 1972, and withdraws an inflation-adjusted percentage of the initial portfolio wealth

($500,000) each year beginning in 1973. Each monthly withdrawal is adjusted for inflation. Each portfolio is rebalanced monthly. Government bonds are guaranteed

by the full faith and credit of the United States government as to the timely payment of principal and interest, while stocks are not guaranteed and have been more

volatile than the other asset classes. Sources of information:

Stocks: Standard & Poor’s 500®, which is an unmanaged group of securities and is considered to be representative of the stock market in general; bonds: five-year

U.S. Government Bond; inflation: Consumer Price Index.

1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

$1,600,000

$1,400,000

$1,200,000

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0

Withdrawal Rates

9%

8%

7%

6%

5%

4%

An individual who began taking inflation-adjusted withdrawals

of 5% at age 65 in 1972 would have seen their portfolio last

until approximately 1995 at age 88.

Chances of success based

on withdrawal rate

Probability of Success

Withdrawal Rate

Indices: cash—30-day T bills

Bonds—US Intermediate Govt., plus Median Premium of LEHB Agg Index to 1976, then LEHB Agg Index

Stocks—CRSP NY/AM/NM 1-10 TR


Conservative

Moderate Conservative

Moderate

Moderate Aggressive

Aggressive

100%

75%

50%

25%

0%

3% 4% 5% 6% 7% 8% 9%

Chances of success based

on withdrawal rate

Portfolio Composition Cash/Bonds/Equities

3% 4% 5% 6% 7% 8% 9%

Conservative: 20/45/35 99% 84% 48% 16% 0% 0% 0%

Mod. Cons.:15/35/50 99% 87% 61% 29% 10% 0% 0%

Moderate: 10/25/65 99% 88% 68% 40% 19% 7% 0%

Mod. Agg.: 10/15/75 99% 88% 70% 46% 25% 11% 0%

Aggressive: 10/0/90 98% 88% 73% 52% 32% 18% 0%

Chance of

Success

(liquidity

through

retirement)

Annual Withdrawal Rate


Six steps to consider taking now

1. Diversify, diversify, diversify

2. Rebalance or review your asset allocation

3. Dollar-cost average

4. Avoid market timing, but prepare for opportunities

5. Don’t let your emotions affect your financial future

6. Get or review your financial plan

Next steps

Let’s get started.

Financial planning services and investments offered through Ameriprise Financial Services, Inc. Member FINRA and SIPC.

© 2008 Ameriprise Financial, Inc. All rights reserved.

[Benjamin Glover 919-227-3170

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