Weathering the Storm

Long term investing requires discipline

At times, investing in the stock market can seem perilous and fraught with uncertainty. When the market gets rough, a natural reaction is to bail out. Is that the best move for you?

For the long-term investor, jumping ship may prove to be more detrimental than riding out the waves. The following image examines a hypothetical $1 investment in stocks, cash, and stocks minus the best 38 months during the period January 1926-December 2004. Missing the best 38 out of 948 months resulted in a return below that of cash—a $2,515 difference.

Keep in mind that an investment cannot be made directly in an index, and past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. The data assumes reinvestment of all income and does not account for taxes or transaction costs.

For the long term, consider a buy-and-hold strategy
Although successful market timing may improve portfolio performance, it is very difficult to time the market consistently. If you are an investor with a long-term investment horizon, timing the market's ups and downs may have a negative effect on a sound investment strategy. Talk to a financial representative about what strategy you should take to reach your goals.

Source: ©2005 Ibbotson Associates, Inc. All rights reserved. Used with permission.

Source: Stocks — Standard & Poor's 500®, an unmanaged group of securities and considered to be representative of the stock market in general; Cash — 30-day U.S. Treasury Bill.

Securities products are offered and sold by prospectus only. Carefully consider the investment objectives, risks, and charges and expenses of the investment company before investing. A contract and fund prospectus containing this and other important information can be obtained by contacting your Northwestern Mutual Investment Services registered representative. Please read the prospectus carefully before you invest or send money.

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