The Quarter in Review

Chart of the Week for April 6-12, 2001

Yahoo! The quarter is over! To be sure this was a trying quarter. In fact it was the worst overall quarterly performance for the three major U.S. indexes since the third quarter of 1990.

During the first quarter of 2001 the bond market cheered as the Federal Reserve cut interest rates three times in three months. U.S. and overseas stock markets fell mainly due to the one-two combination of a weakening economy and a tidal wave of corporate earnings warnings. Most companies cited slowing sales as the primary reason for lower earnings, and some have announced job cuts. Hit particularly hard were “new economy” technology companies which are reflected in the Nasdaq. “Old economy” stocks, represented by the Dow, flirted with bear territory but recovered in the last two weeks of the quarter. International stocks offered no relief either. Investors overseas also grew more concerned about a global slowdown which caused major markets in Europe and Asia to lose ground.

What does all this mean to your retirement account? Reviewing the chart, a few observations are clear. A portfolio consisting of both stocks and bonds will tend to be less volatile than portfolios comprised entirely of either stocks or bonds. Investors should diversify across different types of stocks (i.e. large versus small, growth versus value, domestic versus foreign). Building a well diversified portfolio is a key to investment success.

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.

Investment information can change rapidly and the changes can be significant particularly in volatile markets. For this reason “as of”’ dates are provided for specific data where applicable. The information should not be considered current after the dates provided.

Please read 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 carefully 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. The 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.