Dimensions Point to Differences in Expected Returns US Premiums (Arithmetic Average of Annual Premiums) Market (Equity Premium) 8.15% 1928–2014 Company Size (Small Cap Premium ) 3.46% 1928–2014 EQUITY DIMENSIONS Relative Price (Value Premium) 5.10% 1928–2014 Profitability (Profitability Premium) 3.08% 1964–2014 Talking Points: Dimensions point to systematic differences in expected returns. Portfolios can be structured around these dimensions, which are sensible, backed by data, and cost-effective to capture in diversified portfolios. Much of what we have learned can be summarized in simple terms. First, stocks have higher expected returns than bonds. Relative performance among stocks largely depends on company size (small vs. large), relative price (value vs. growth), and profitability (high vs. low). When setting prices, markets effectively apply different discount rates to stocks to reflect differences in underlying risk. Company size, relative price, and profitability are variables—or dimensions—that allow us to identify differences in these discount rates. In fixed income, two dimensions largely drive relative performance: term and credit. Longer-term bonds are more sensitive than shorter-term bonds to unexpected changes in interest rates. Bonds with lower credit quality have a greater risk of default than bonds with higher credit quality. By considering how much of each equity and fixed income dimension to target, investors can adjust the total expected return profile of their portfolios and more easily build a strategy to support their investment goals. Term (Term Premium) 2.55% 1928–2014 Fixed income DIMENSIONS Credit (Credit Premium) 1.17% 1973–2014 Information provided by Dimensional Fund Advisors LP. The Equity premium is the arithmetic average of the annual Fama/French Total US Market Research Index minus the annual one-month US Treasury Bill. The size premium is the arithmetic average of the annual Fama/French SmB factor, which is the average of the annual Fama/French US Small Value, US Small Neutral, and US Small Growth Research Indices, minus the average of the annual Fama/French US Large Value, US Large Neutral, and US Large Growth Research Indices. The value premium is the arithmetic average of the annual Fama/French HmL factor, which is the average of the annual Fama/French US Small Value and US Large Value Research Indices, minus the average of the annual Fama/French US Small Growth and US Large Growth Research Indices. The profitability premium is the arithmetic average of the annual Fama/French RmW factor, which is the average of the annual Fama/French US Small Robust and US Large Robust Profitability Research Indices, minus the average of the annual Fama/French US Small Weak and US Large Weak Profitability Research Indices. The term premium is the arithmetic average of the annual Ibbotson SBBI Long-Term Government Bonds index minus the annual one-month US Treasury Bill. The credit premium is the arithmetic average of the average of the annual Barclays US Intermediate Credit A and Baa Indices, minus the annual Barclays US Government Bond Intermediate Index. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Yearly Observations of Premiums Market, size, relative price, and profitability: US markets Arithmetic Average of Annual Premiums Market minus Bills Small Cap minus LARGE CAP Value minus Growth minus LOW PROF High Prof Talking Points: This chart documents relative performance of dimensions in the US equity market. The blue bars indicate years in which the market, small cap, value, and profitability premiums were positive. The red bars indicate years in which the premiums were negative. A positive premium indicates outperformance (e.g., small cap stocks outperform large cap stocks); a negative premium indicates underperformance (e.g., small cap stocks underperform large cap stocks). Over the given time periods for which there is available data, positive premiums have occurred more frequently than negative premiums across all dimensions. However, yearly observations of premiums can vary widely and experience extreme and prolonged negative relative performance. Investors should take a longer-term view when targeting dimensions of higher expected returns and be prepared to apply discipline throughout different market environments. Over longer periods of time, we have observed higher frequency of positive premiums. Information provided by Dimensional Fund Advisors LP. Equity premium is the Fama/French Total US Market Research Index minus the one-month US Treasury Bill. Size premium is the Fama/French SmB factor: (Fama/French US Small Value, US Small Neutral, and US Small Growth Research Indices) minus (Fama/French US Large Value, US Large Neutral, and US Large Growth Research Indices). Value premium is the Fama/French HmL factor: (Fama/French US Small Value and US Large Value Research Indices) minus (Fama/French US Small Growth and US Large Growth Research Indices). Profitability premium is the Fama/French RmW factor: (Fama/French US Small Robust and US Large Robust Profitability Research Indices) minus (Fama/French US Small Weak and US Large Weak Profitability Research Indices). Profitability is measured as operating income before depreciation and amortization minus interest expense, scaled by book. Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Yearly Observations of Premiums Market minus one-month Treasury bills: US markets 1928–2014 Arithmetic Average of Annual Premiums Within 2% of Average Premiums within Range Talking Points: The chart documents the US market (equity) premium and shows periods in history when US stocks underperformed T-bills. The blue bars in the graph indicate the years in which the broad US market delivered an average return above T-bills (positive equity premium). The red bars indicate years in which the market underperformed T-bills. The dark blue bars indicate the years when a positive equity premium was within a 2% range of its long-term average, as indicated by the horizontal line. The annual US market premium may vary widely and experience extreme positive or negative performance swings relative to T-bills. The premium has been within 2% of the annual average in only a few years since 1928, but it has been positive more often than negative. On average, the annual market premium also has experienced a stronger upside than downside. Information provided by Dimensional Fund Advisors LP. The equity premium is the Fama/French Total US Market Research Index minus the one-month US Treasury Bill. Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Yearly Observations of Premiums Small cap minus large cap: US markets 1928–2014 Arithmetic Average of Annual Premiums Within 2% of Average Premiums within Range Talking Points: This graph documents the size premium in the US market and shows that the premium is not predictable or consistent from year to year. The dark blue bars in the graph indicate the years in which US small cap beat US large cap (positive size premium). The red bars indicate when small cap underperformed large cap (negative size premium). The light blue bars indicate the years when a positive small cap premium was within a 2% range of its long-term average. The annual small cap premium varies widely and can experience extreme positive or negative swings relative to large cap. The premium has been within 2% of the average in only a few years since 1928, but it has been positive in a majority of years and experienced a stronger upside than downside. Information provided by Dimensional Fund Advisors LP. The size premium is the Fama/French SmB factor: (Fama/French US Small Value, US Small Neutral, and US Small Growth Research Indices) minus (Fama/French US Large Value, US Large Neutral, and US Large Growth Research Indices). Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Yearly Observations of Premiums Value minus growth: US markets 1928–2014 Arithmetic Average of Annual Premiums Within 2% of Average Premiums within Range Talking Points: This graph documents the value premium in the US market and illustrates that the premium can be extreme from year to year. The dark blue bars in the graph indicate the years in which US value stocks outperformed US growth stocks. The red bars indicate when value underperformed growth. The light blue bars indicate the years when a positive value premium was within a 2% range of its long-term average. The annual value premium varies widely and can experience extreme positive or negative performance swings relative to growth. The premium has been within 2% in only a few years since 1928, but it has been positive in a majority of years and experienced a stronger upside than downside. Information provided by Dimensional Fund Advisors LP. The value premium is the Fama/French HmL factor: (Fama/French US Small Value and US Large Value Research Indices) minus (Fama/French US Small Growth and US Large Growth Research Indices). Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Yearly Observations of Premiums High profitability minus low profitability: US markets 1964–2014 Arithmetic Average of Annual Premiums Within 2% of Average Premiums within Range Talking Points: This graph documents the profitability premium in the US market and illustrates that the premium can be extreme from year to year. The dark blue bars in the graph indicate the years in which high profitability stocks outperformed low profitability stocks. The red bars indicate when high profitability stocks underperformed low profitability stocks. The light blue bars indicate the years when a positive profitability premium was within a 2% range of its long-term average. The annual profitability premium varies widely and can experience extreme positive or negative performance swings relative to growth. The premium has been within 2% in only a few years since 1964, but it has been positive in a majority of years and experienced a stronger upside than downside. Information provided by Dimensional Fund Advisors LP. The profitability premium is the Fama/French RmW factor: (Fama/French US Small Robust and US Large Robust Profitability Research Indices) minus (Fama/French US Small Weak and US Large Weak Profitability Research Indices). Profitability is measured as operating income before depreciation and amortization minus interest expense, scaled by book. Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Five-Year Moving Average of Premiums Market, size, relative price, and profitability: US markets Market minus Bills Small Cap minus LARGE CAP Value minus Growth minus LOW PROF High Prof Talking Points: This chart documents relative five-year annualized performance of equity dimensions in the US. When looking at longer time spans, observations of premiums are more consistent compared to one observation in any given year. The blue bars denote five-year periods in which the market, small cap, value, and profitability premiums were positive; the red bars indicate negative premiums. Consider, for example, the first series of red bars in the top graph, which reflects the annualized performance difference between the US market and one-year Treasury bills from 1928 to 1932 (i.e., market premium). During this five-year period, the annualized return for US equities was less than that of one-year Treasury bills, as indicated by the negative red bar (or premium). The last bar in the top graph shows the return difference for the most recent five-year period ending in 2014. US equities logged a positive annualized return, as indicated by the blue bar. The other graphs show that US small cap stocks, value stocks, and high profitability stocks have delivered positive annualized returns relative to their large cap, growth, and low profitability counterparts in most five-year periods. Despite the higher frequency of positive premiums, outperformance may not be consistent, even over longer periods of time. Long-term investors should consider that premiums are never guaranteed and can experience periods of negative returns in both relative and absolute terms. Information provided by Dimensional Fund Advisors LP. Five-year rolling equity premium is the five-year arithmetic average return of the Fama/French Total US Market Research Index minus the five-year arithmetic average return of the one-month US Treasury Bill. Five-year rolling size premium is the five-year arithmetic average return of the Fama/French SmB factor: (Fama/French US Small Value, US Small Neutral, and US Small Growth Research Indices) minus (Fama/French US Large Value, US Large Neutral, and US Large Growth Research Indices). Five-year rolling value premium is the five-year arithmetic average return of the Fama/French HmL factor: (Fama/French US Small Value and US Large Value Research Indices) minus (Fama/French US Small Growth and US Large Growth Research Indices). Five-year rolling profitability premium is the five-year arithmetic average return of the Fama/French RmW factor: (Fama/French US Small Robust and US Large Robust Profitability Research Indices) minus (Fama/French US Small Weak and US Large Weak Profitability Research Indices). Profitability is measured as operating income before depreciation and amortization minus interest expense, scaled by book. Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Five-Year Moving Average of Premiums Market minus one-month Treasury bills: US markets 1932–2014 Talking Points: This graph compares five-year annualized performance of the US stock market vs. Treasury bills. The blue bars denote the five-year periods in which stocks beat T-bills; the red bars indicate when stocks underperformed T-bills. Consider, for example, the first red bar in the graph. This reflects the annualized performance difference between US stocks and T-bills from 1928 to 1932. During this five-year period, stocks had a lower annualized return, as indicated by the red bar extending below zero. The last bar in this graph (far right) shows the return difference for the most recent five-year period (2010–2014). US stocks logged a positive annualized return premium (relative to T-bills), as indicated by the blue bar. The graph shows that US stocks outperformed T-bills in most five-year periods since 1928. Despite the higher frequency of the market premium, this outperformance has not been consistent, even for the five-year periods. Longer-term investors should consider that US stocks may experience extended periods of underperformance. Information provided by Dimensional Fund Advisors LP. The five-year rolling equity premium is the five-year arithmetic average return of the Fama/French Total US Market Research Index minus the five-year arithmetic average return of the one-month US Treasury Bill. Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Five-Year Moving Average of Premiums Small cap minus large cap: US markets 1932–2014 Talking Points: This graph compares five-year annualized performance of small cap vs. large cap US stocks. The blue bars denote the years in which small beat large. The red bars indicate when small underperformed. Consider, for example, the first red bar. This reflects the annualized performance difference between small cap and large cap from 1928 to 1932. During this five-year period, the annualized return for small cap was less than large cap, as indicated by the red bar extending below zero. The last bar in this graph (far right) shows the return difference for the most recent five-year period (2010–2014). US small cap stocks logged a positive annualized return premium (relative to large cap), as indicated by the blue bar. The graphs show that US small cap stocks delivered higher average returns than large cap stocks in most five-year periods. Despite the higher frequency of the size premium, this outperformance has not been consistent, even for extended periods. Longer-term investors should also consider that the size premium may experience prolonged periods of underperformance. Information provided by Dimensional Fund Advisors LP. The five-year rolling size premium is the five-year arithmetic average return of the Fama/French SmB factor: (Fama/French US Small Value, US Small Neutral, and US Small Growth Research Indices) minus (Fama/French US Large Value, US Large Neutral, and US Large Growth Research Indices). Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Five-Year Moving Average of Premiums Value minus growth: US markets 1932–2014 Talking Points: This graph compares five-year annualized returns for value stocks relative to growth stocks in the US. The blue bars denote the years in which value beat growth. The red bars indicate when value underperformed large cap and growth. Consider, for example, the first red bar in the top graph. During this five-year period (1928–1932), the annualized return for value stocks was less than that for growth stocks, as indicated by the red bar extending below zero. The graphs show that US value stocks delivered higher average returns than growth stocks in most five-year periods. Despite the higher frequency of the value premiums, this outperformance has not been consistent, even for extended periods. Longer-term investors should also consider that the value premium may experience prolonged periods of underperformance. Information provided by Dimensional Fund Advisors LP. The five-year rolling value premium is the five-year arithmetic average return of the Fama/French HmL factor: (Fama/French US Small Value and US Large Value Research Indices) minus (Fama/French US Small Growth and US Large Growth Research Indices). Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Five-Year Moving Average of Premiums High profitability minus low profitability: US markets 1968–2014 Talking Points: This graph compares five-year annualized performance of high profitability vs. low profitability US stocks. The blue bars denote the years in which high profitability beat low profitability. The red bars indicate when low profitability beat high profitability. Consider, for example, the first red bar in the top graph. During this five-year period (1964–1968), the annualized return for high profitability stocks was less than low profitability stocks, as indicated by the red bar extending below zero. The last bar in this graph (far right) shows the return difference for the most recent five-year period (2010–2014). High profitability stocks logged a positive annualized return premium (relative to low profitability stocks), as indicated by the blue bar. The graphs show that high profitability stocks delivered higher average returns than low profitability stocks in most five-year periods. Despite the higher frequency of the profitability premium, this outperformance has not been consistent, even for extended periods. Longer-term investors should also consider that the profitability premium may experience prolonged periods of underperformance. Information provided by Dimensional Fund Advisors LP. The five-year rolling profitability premium is the five-year arithmetic average return of the Fama/French RmW factor: (Fama/French US Small Robust and US Large Robust Profitability Research Indices) minus (Fama/French US Small Weak and US Large Weak Profitability Research Indices). Profitability is measured as operating income before depreciation and amortization minus interest expense, scaled by book. Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Ten-Year Moving Average of Premiums Max 22.98% Min -18.00% Market, size, relative price, and profitability: US markets Market minus Bills Small Cap minus LARGE CAP Value minus Growth minus LOW PROF High Prof Talking Points: This chart documents relative ten-year annualized performance of equity dimensions in the US. When looking at longer time spans, observations of premiums are more consistent compared to one observation in any given year. The blue bars denote ten-year periods in which the market, small cap, value, and profitability premiums were positive; the red bars indicate negative premiums. The graphs show that US small cap stocks, value stocks, and high profitability stocks have delivered positive annualized returns relative to their large cap, growth, and low profitability counterparts in most ten-year periods. Despite the higher frequency of positive premiums, outperformance may not be consistent, even over longer periods of time. Long-term investors should consider that premiums are never guaranteed and can experience periods of negative returns in both relative and absolute terms. Information provided by Dimensional Fund Advisors LP. Ten-year rolling equity premium is the ten-year arithmetic average return of the Fama/French Total US Market Research Index minus the ten-year arithmetic average return of the one-month US Treasury Bill. Ten-year rolling size premium is the ten-year arithmetic average return of the Fama/French SmB factor: (Fama/French US Small Value, US Small Neutral, and US Small Growth Research Indices) minus (Fama/French US Large Value, US Large Neutral, and US Large Growth Research Indices). Ten-year rolling value premium is the ten-year arithmetic average return of the Fama/French HmL factor: (Fama/French US Small Value and US Large Value Research Indices) minus (Fama/French US Small Growth and US Large Growth Research Indices). Ten-year rolling profitability premium is the ten-year arithmetic average return of the Fama/French RmW factor: (Fama/French US Small Robust and US Large Robust Profitability Research Indices) minus (Fama/French US Small Weak and US Large Weak Profitability Research Indices). Profitability is measured as operating income before depreciation and amortization minus interest expense, scaled by book. Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Ten-Year Moving Average of Premiums Market minus one-month Treasury bills: US markets 1937–2014 Talking Points: This graph compares ten-year annualized performance of the US stock market vs. Treasury bills. The blue bars denote the ten-year periods in which stocks beat T-bills; the red bars indicate when stocks underperformed T-bills. The graph shows that US stocks outperformed T-bills in most ten-year periods. Despite the higher frequency of the market premium, this outperformance has not been consistent, even for the ten-year periods. Longer-term investors should consider that US stocks may experience extended periods of underperformance. Information provided by Dimensional Fund Advisors LP. The ten-year rolling equity premium is the ten-year arithmetic average return of the Fama/French Total US Market Research Index minus the ten-year arithmetic average return of the one-month US Treasury Bill. Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Ten-Year Moving Average of Premiums Small cap minus large cap: US markets 1937–2014 Talking Points: This graph compares ten-year annualized performance of small cap vs. large cap US stocks. The blue bars denote the years in which small beat large. The red bars indicate when small underperformed. The graph show that US small cap stocks delivered higher average returns than large cap stocks in most ten-year periods. Despite the higher frequency of the size premium, this outperformance has not been consistent, even for extended periods. Longer-term investors should also consider that the size premium may experience prolonged periods of underperformance. Information provided by Dimensional Fund Advisors LP. The ten-year rolling size premium is the ten-year arithmetic average return of the Fama/French SmB factor: (Fama/French US Small Value, US Small Neutral, and US Small Growth Research Indices) minus (Fama/French US Large Value, US Large Neutral, and US Large Growth Research Indices). Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Ten-Year Moving Average of Premiums Value minus growth: US markets 1937–2014 Talking Points: This graph compares ten-year annualized returns for value stocks relative to growth stocks in the US. The blue bars denote the years in which value beat growth. The red bars indicate when value underperformed large cap and growth. The graph show that US value stocks delivered higher average returns than growth stocks in most ten-year periods. Despite the higher frequency of the value premiums, this outperformance has not been consistent, even for extended periods. Longer-term investors should also consider that the value premium may experience prolonged periods of underperformance. Information provided by Dimensional Fund Advisors LP. The ten-year rolling value premium is the ten-year arithmetic average return of the Fama/French HmL factor: (Fama/French US Small Value and US Large Value Research Indices) minus (Fama/French US Small Growth and US Large Growth Research Indices). Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

Ten-Year Moving Average of Premiums High profitability minus low profitability: US markets 1973–2014 Talking Points: This graph compares ten-year annualized performance of high profitability vs. low profitability US stocks. The blue bars denote the years in which high profitability beat low profitability. The red bars indicate when low profitability beat high profitability. The graph show that high profitability stocks delivered higher average returns than low profitability stocks in most ten-year periods. Despite the higher frequency of the profitability premium, this outperformance has not been consistent, even for extended periods. Longer-term investors should also consider that the profitability premium may experience prolonged periods of underperformance. Information provided by Dimensional Fund Advisors LP. The ten-year rolling profitability premium is the ten-year arithmetic average return of the Fama/French RmW factor: (Fama/French US Small Robust and US Large Robust Profitability Research Indices) minus (Fama/French US Small Weak and US Large Weak Profitability Research Indices). Profitability is measured as operating income before depreciation and amortization minus interest expense, scaled by book. Fama/French indices provided by Ken French. Index descriptions available upon request. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP.

The Market’s Response to Crisis Performance of a Normal Balanced Strategy: 60% Stocks, 40% Bonds Cumulative Total Return Talking Points:  This slide shows performance of a balanced investment strategy following a few historical crises. Each crisis is labeled with the month and year that it occurred or peaked. The subsequent one-, three-, and five-year annualized returns start from the first day of the month following each crisis. Although a global investment strategy would have suffered losses immediately following most of these events, the financial markets recovered over time, as indicated by the positive three- and five-year cumulative returns. Negative events such as these may tempt investors to flee the financial markets. But diversification and a long-term perspective can help investors apply discipline to ride out the storm. October 1987: Stock Market Crash August 1989: US Savings and Loan Crisis September 1998: Asian Contagion Russian Crisis March 2000: Dot-Com Crash September 2001: Terrorist Attack September 2008: Bankruptcy of Lehman Brothers Balanced Strategy: 7.5% each S&P 500 Index, CRSP 6-10 Index, US Small Value Index, US Large Value Index; 15% each International Value Index, International Small Index; 40% BofA Merrill Lynch One-Year US Treasury Note Index.The S&P data are provided by Standard & Poor’s Index Services Group. The Merrill Lynch Indices are used with permission; copyright 2015 Merrill Lynch, Pierce, Fenner & Smith Incorporated; all rights reserved. CRSP data provided by the Center for Research in Security Prices, University of Chicago. US Small Value Index and US Large Value Index provided by Fama/French. International Value Index provided by Fama/French. International Small Cap Index compiled by Dimensional from StyleResearch securities data; includes securities of MSCI EAFE countries in the bottom 10% of market capitalization, excluding the bottom 1%; market-cap weighted; each country capped at 50%; rebalanced semiannually. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Not to be construed as investment advice. Returns of model portfolios are based on back-tested model allocation mixes designed with the benefit of hindsight and do not represent actual investment performance.

Patient Investing May Prevent You from Missing Opportunity This table reports the frequency of consecutive negative days that result in a cumulative drop of at least 5% and 10%. The number of 5% drops has historically been larger than the number of 10% drops for the indices shown. Occurrence of such drops has not been a reliable indicator of poor future subsequent market returns. Time periods displayed for each index are based on data availability of daily returns. Declines are defined as periods with consecutive days of negative index returns with cumulative losses at or above the cutoff. Annualized compound returns are averages across all declines. US Large Cap is the S&P 500 Index, provided by Standard & Poor’s Index Services Group. International Large Cap is the MSCI World ex USA Index. Emerging Markets is the MSCI Emerging Markets Index. MSCI data copyright MSCI 2015, all rights reserved. Past performance is not a guarantee of future results. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Values change frequently and past performance may not be repeated. There is always the risk that an investor may lose money. International investing involves special risks such as currency fluctuation and political instability. Investing in emerging markets may accentuate these risks.