Participant education

To help you enhance your relationship and deepen your value proposition with Plan Sponsors Invesco has developed a series of public approved materials focused on educating participants about retirement. Check out the tabs below for more information.

The importance of dividends for stock investors

Dividends are the only way investors can collect cash from their stock investments without having to sell them. Dividends are also one of the oldest gauges investors can use to help evaluate the financial health of a company.

Dividends have driven returns: Dividend-paying stocks have outperformed non-payers
S&P 500 payers vs. non-payers for the five-year period following every recession since 19722
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[{ name: 'Dividend-paying stocks', data: [10.63, 16.07, 12.82, 13.34, 10.17] }, { name: 'Non-dividend stocks', data: [8.13, 4.91, -.58, 7.58, 1.33] }]

1 Ned Davis Research Inc. Dec. 31, 1929, through Dec. 31, 2014.
2 Source: All data is sourced from Ned Davis Research Inc. as of Dec. 31, 2014. Further distribution prohibited without prior permission. Copyright© 2015 Ned Davis Research, Inc.
All rights reserved. Past performance does not guarantee future results.
All rights reserved. S&P 500 Index past performance is not indicative of future results. Index performance is shown for illustrative purposes only and is not intended to represent historical or to predict future performance of any specific investment. Indexes are unmanaged and an investor cannot invest in an index. They do not include any fees or charges. Returns based on monthly equal-weighted geometric average of total returns of S&P 500 component stocks, with components reconstituted monthly. "Standard & Poor's" and "S&P" are trademarks of The McGraw-Hill Companies, Inc.

The basics

Essentially, dividends are payouts that some companies make to shareholders as a return on their investment. The money paid comes from a company's earnings, and it is generally seen as a reflection of the company's past performance as well as its potential for the future. Older, more established companies are more likely to pay dividends than newer firms. Dividends are often paid quarterly at a pre-announced rate that gives shareholders a predictable payout for that quarter, regardless of daily share price fluctuations. Dividends are taxed at your individual tax rate.


Keep in mind, however, that the payment of stock dividends is never guaranteed and may vary over time. This material is for educational purposes only and does not contend to address the financial objectives, situation or specific needs of any individual investor. It is not a solicitation or an offer to buy or sell any security or investment product.

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The importance of dividends for stock investors

Understanding dividends and how they can be beneficial in an allocation.

Making the most of your retirement savings: Traditional or Roth: Which is right for you?

Helps investors understand the tax-deductible benefit of traditional IRAs and the tax-free earnings growth of Roth IRAs.

Your total financial picture: A planning checklist

Divides comprehensive financial planning into six parts and includes a checklist of financial issues for considerations.

 

Risk tolerance: Facts should trump emotions

Risk tolerance is one of the most important issues you’ll consider when building your investment portfolio. But it’s often misunderstood. While many investors believe risk tolerance is a reflection of their emotions, the more important component is your financial ability to take risk. Your portfolio needs to suit both your personality and your pocketbook

Many investors measure risk tolerance primarily on an emotional level

As stock prices go up, some investors may feel more optimistic — and more willing to buy stocks. Likewise, as stock prices go down, investors may feel more pessimistic and perhaps less inclined to buy stocks.

Many investors measure risk tolerance primarily on an emotional level

Source: This illustration is based on the Cycle of Market Emotions chart created by Christianna Wood at Westcore Funds/Denver Investment Advisors LLC, 1998.

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Risk tolerance: Facts should trump emotions

Discusses emotions vs. facts and how true risk tolerance is based on a person's financial ability to take risk, not their emotions about risk.

Building your knowledge: The tale of 10 days

Exposes the myth perpetuated by the financial industry that it's more important to avoid missing the best days without consideration to the impact of missing the worst days.

Investing your portfolio: Keeping up with the growth of the world's middle class

A growing global middle class equals opportunities for US investors.

Investing your portfolio: Broaden your investment horizons

Explore the option of diversifying your portfolio to include international markets.

Understanding asset class performance: Building a better block chart

Introduces a better way to view asset class performance — by economic environment.

 
 

Why it's important to start playing defense early in retirement

Once they made it to retirement, Bob and Julie had to change their game plans. A retiree's goals are more focused on preserving hard-earned savings while also generating enough income to fund a comfortable retirement. And once you begin making withdrawals from your savings, the sequence of returns can make a big difference.

Julie Blue's retirement portfolio started strong. Her returns, shown below, follow the actual returns of the S&P 500 Index from 1990 through 2010, taking into account an annual $50,000 withdrawal (indexed for inflation). As you may remember, the returns in the early '90s were stronger than returns since 2008. But even though Julie's portfolio took some major hits in 2002 and then again in 2008, strong early returns sustained her portfolio so that she ended up with more than twice what she started with — all while taking out money to live on each year.

During Bob Green's retirement, the market finished much stronger than it started. His returns are also based on the S&P 500 Index — but in the reverse order of Julie's. So Bob experienced early setbacks, not early gains. Therefore, even with strong market returns in later years, his portfolio never fully recovered.

It's more important to start strong than to finish strong

$1 million beginning balance invested in S&P 500 Index
$50,000 annual withdrawls, increased 3% annually, from 1990-2010

Source: Lipper. Data as of Dec. 31, 2015.
For illustrative purposes only. Past performance does not guarantee future results. The S&P 500 is an unmanaged index considered representative of the US stock market. An investment cannot be made directly in an index. Each portfolio assumes a first year withdrawl that was subsequently adjusted for actual inflation, represented by changes to the historical Consumer Price Index (CPI). The table assumes annual withdrawls are taken at the end of each year. The (CPI) is a measure of change in consumer prices as determined by the US Labor of Statistics.

This is a hypothetical example with fictional characters. They do not necessarily represent the experiences of actual clients, nor do they indicate future performance.

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Why it's important to start playing defense early in retirement

The sequence of returns does matter when clients begin making withdrawls from their retirement accounts.

Presentations

Rethinking Risk: The truth behind five common investment myths

Rethinking Risk: The truth behind five common investment myths

Discover the truth behind five common investment myths and five actions you can take toward building an intentional portfolio.