Seminar Presentation Actions You Can Take In A Volatile Market

Financial planning services and investments offered through Ameriprise Financial Services, Inc. Member FINRA and SIPC. © 2008-2009 Ameriprise Financial, Inc. All rights reserved. 2/09

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

Justin J. Spraker, Financial Advisor

September 12th 2009

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

-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 1926-2008

Source: Ibbotson for 1926 to 1970; Morningstar Direct for 1971 to current period.

Measuring volatility

S&P 500 stock index 1976-2008:

• Average return is about 11%

• Standard deviation (volatility) has been about 15%

• Range of returns is about 41% to -19%

• Probability range is 95% — returns can be worse (or better) than those shown here

11%

26%

41%

-4%

-19%

Source: Morningstar Direct & PAG.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 2008, the S&P 500 has returned an average of 8.88% per year

Returns in a given calendar year ranged from -37% to +38%

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

2008 2001 2000 2007 2006 2003 1983

2002 1973 1990 2005 2004 1999 1982

1974 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: Source: Morningstar Direct for 1971 to current period and Ibbotson for 1966 to 1970.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

30 19 18

8

-1-4

-39

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%

30

25

20

15

10

5

0

-5

-10

-15

-20

-25

-30

-35

-40

-12%

-23%

28%

11%

5%

16%

5%

?

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: Morningstar Direct. Annual Returns of S&P 500 Index, 2000-2008, assuming reinvestment of dividends. The average annual total return for the period 12/31/99 to 12/31/08 was -3.6%. 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.

-37%

Comparing this decade to others

Annualized performance of the S&P 500

20

15

10

5

0

-5

Source: Ibbotson for 1925 to 1979, 20s encompasses the years 1925 to 1929; Morningstar Direct for 1980 to current period. 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.

19%

20s 30s 40s 50s 60s 70s 80s 90s 00s(1925 – 1929) (2000 – 2008)

9%

-0.05%

9%8%

6%

18%

-4%

18%

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

Dollar-cost averaging involves continuous investment in securities, regardless of fluctuating price levels. Investors should consider their ability to continue purchases through periods of low price levels. 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. Dollar-cost averaging, diversification and asset allocation do not guarantee overall portfolio profit or protect against loss in declining markets. Neither Ameriprise Financial nor its representatives or affiliates provide tax or legal advice. Consult with your tax advisor or attorney regarding specific issues.

*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. Barclays Capital High Yield Bond Index (formerly Lehman Brothers High Yield Bond Index) covers the universe of fixed rate, non-investment grade debt. The Index includes both corporate and noncorporate sectors. Barclays Capital High Yield Bond Index (formerly Lehman Brothers High Yield 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 Indexn Large Cap Value: Russell 1000® Value Indexn Int’l Stocks: MSCI EAFE Indexn Small Cap Value: Russell 2000® Value Indexn Small Cap Growth: Russell 2000® Growth Indexn Mid Cap Stocks: Russell Mid Cap® Indexn High Yield Bonds: Barclays Capital High Yield Bond

Index (formerly Lehman Brothers High Yield Bond Index)n Bonds: Barclays Capital Aggregate Bond Index (formerly

Lehman Brothers Aggregate Bond Index)n Real Estate: Wilshire REIT Indexn 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 VALUE7.01%

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 BONDS5.28%

DIVERSIFIED PORTFOLIO -1.87%

LARGE CAP VALUE-5.59%

MID CAP STOCKS-5.62%

LARGE CAP GROWTH–20.42%


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%


MID CAP STOCKS-16.19%

LARGE CAP GROWTH-27.88%

SMALL CAP GROWTH48.54%

SMALL CAP VALUE

46.03%


INT’L STOCKS39.17%

REAL ESTATE 36.18%

DIVERSIFIED PORTFOLIO 33.58%

LARGE CAP VALUE

30.03%

LARGE CAP GROWTH29.75%


BONDS4.10%

REAL ESTATE 33.16%

SMALL CAP VALUE

22.25%



DIVERSIFIED PORTFOLIO 16.63%

LARGE CAP VALUE

16.49%



BONDS 4.34%


REAL ESTATE 13.82%

MID CAP STOCKS12.65%


7.46%

LARGE CAP VALUE7.05%


SMALL CAP VALUE 4.71%


BONDS2.43%

REAL ESTATE 35.97%


SMALL CAP VALUE

23.48%

LARGE CAP VALUE

22.25%

DIVERSIFIED PORTFOLIO17.97%

MID CAP STOCKS15.26%



BONDS 4.33%



BONDS 6.97%

MID CAP STOCKS5.60%


2.19%


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%





2000 2001 2002 2003 2004 2005 2006 2007*

Historic volatility by standard deviation

S&P 500 Stock Index1976-2008 11%

26%

41%

-4%

-19%

Barclays Capital Aggregate Bond Index (formerly Lehman Aggregate Bond Index) 1976-2008

Stocks

Bonds20%

14%

8%

3%

-3%

Source: Morningstar Direct & PAG.Past performance is not a guarantee of future results. Barclays Capital Aggregate Bond Index (formerly 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 helps you 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 protection against loss.

Barclays Capital Aggregate Bond Index (formerly Lehman Brothers Aggregate Bond Index)

Diversification can temper market volatility

Performance of Stocks, Bonds and 50/50 Mix 1988 to 200850%

40%

30%

20%

10%

0%

-10%

-20%

-30%

-40%

1988 1998

S&P 500 Index 50/50 Mix

2008

Source: Morningstar Direct & PAG. Blended index returns calculated by PAG using a monthly weighting.Past performance does not guarantee future results. These examples do not reflect sales charges, taxes or other costs associated with investing. Barclays Capital Aggregate Bond Index (formerly 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.

Rebalancing can keep you on plan

Initial allocation Rebalance backOne year later

50% Bonds

50% Stocks

50% Stocks

50% Bonds

40% Bonds

60% Stocks

Diversification helps you 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 protection against loss.

Dollar-cost averaging – price rises

Average price: $15.00 Average cost: $14.19

Invested amount: $6,000.00Ending 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

$01 2 3 4 5 6

Dollar-cost averaging – market down, then recovers




$25

$20

$15

$10

$5

$01 2 3 4 5 6

Dollar-cost averaging – market down, partial rebound




$25

$20

$15

$10

$5

$01 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

$7,167

Understanding emotional investing

Optimism

Relief

Hope“Things may be turning around.”

Excitement

Thrill

Optimism

“Wow, I ammaking money.I feel good about this investment.”

Euphoria Point of maximum financial risk

Fear

Denial“This is just a temporary setback.”

Desperation

Anxiety

PanicCapitulation

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 equityFund investor

Inflation

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.Dollar-cost averaging involves continuous investment in securities, regardless of fluctuating price levels. Investors should consider their ability to continue purchases through periods of low price levels. 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. Dollar-cost averaging, diversification and asset allocation do not guarantee overall portfolio profit or protect against loss in declining markets. Neither Ameriprise Financial nor its representatives or affiliates provide tax or legal advice. Consult with your tax advisor or attorney regarding specific issues.

Steps you can take

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

Dollar-cost averaging involves continuous investment in securities, regardless of fluctuating price levels. Investors should consider their ability to continue purchases through periods of low price levels. 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. Dollar-cost averaging, diversification and asset allocation do not guarantee overall portfolio profit or protect against loss in declining markets. Neither Ameriprise Financial nor its representatives or affiliates provide tax or legal advice. Consult with your tax advisor or attorney regarding specific issues.

Next steps

Let’s get started.

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

© 2008-2009 Ameriprise Financial, Inc. All rights reserved.

Justin J. Spraker, Financial Advisor

Ameriprise Financial Advisors5 Southside DriveSte 202Clifton Park, NY 12065(518) [email protected]

Seminar Presentation Actions You Can Take In A Volatile Market

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