Diversification is Key
Chart of the Week for July 30-August 5, 1999
Over time the market goes up and down, and some investors tolerate these fluctuations better than others. One way to reduce your overall risk while meeting your retirement goals is to diversify your portfolio. You can achieve this by investing in more than one asset class (e.g. stocks, bonds and/or cash).
The chart above shows an all-equity portfolio (S&P 500), an all-bond portfolio (Lehman Brothers Aggregate Bond Index), and the ICMA-RC’s Traditional Growth Model Portfolio Fund. The Traditional Growth Fund invests in a variety of other ICMA-RC funds.
Traditional Growth Fund
Since the beginning of the year, the S&P saw a high monthly return of 6% and a low of -3%, whereas the Traditional Growth Fund had a monthly high and low of 3% and -2% respectively. While the cumulative performance year-to-date of the Traditional Growth Fund was 7.0% versus 12.4% for the S&P 500 Index, the volatility was reduced by more than one third (as measured by standard deviation for the same time period).
In addition to the Traditional Growth Fund, there are three other balanced funds from which to choose. Based on your individual time horizon and tolerance for risk, one of them may be right for you. Information about each of these funds will be included in the next Vantagepoint newsletter.
- Savings Oriented Fund
- Conservative Growth Fund
- Traditional Growth Fund
- Long-Term Growth Fund
This illustration was compiled by information from outside sources. These companies are not affiliated with ICMA-RC. This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. ICMA-RC does not offer specific tax or legal advice. Individuals are advised to consider any new investment strategies carefully prior to implementing.
Please consult both the current applicable prospectus and MAKING SOUND INVESTMENT DECISIONS: A Retirement Investment Guide carefully for a complete summary of all fees, expenses, charges, financial highlights, investment objectives, risks and performance information. Investing in mutual funds and other investment vehicles involves risk, including possible loss of the amount invested. Investors should consider the Fund's investment objectives, risks, charges and expenses before investing or sending money. The prospectus contains this and other information about the investment company. Please read the prospectus carefully before investing. All Vantagepoint Funds invested through 401 or 457 plans are held through VantageTrust. Vantagepoint Funds are distributed by ICMA-RC Services LLC, a wholly owned broker-dealer subsidiary of ICMA-RC and member FINRA/SIPC. For a current prospectus, contact ICMA-RC Services, LLC.
The performance data quoted represents past performance. Past performance is no guarantee of future results. Investment returns and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data illustrated. For performance data current to the most recent month end, contact ICMA-RC Services, LLC by calling 800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240. Para asistencia en Español llame al 800-669-8216. Performance data current to the most recent quarter end is available by visiting www.icmarc.org.