Sticking with Your Strategy Don't Chase Investments Based on Sizzling Returns Changing investment strategies based on the past performance of a particular investment can be a buy-high strategy that could leave you with disappointing investment returns. Avoiding Rearview Mirror Decision-Making Typically, rearview mirror investors watch the sizzling returns from a particular investment and buy in, hoping to realize similar returns. But their timing is generally off. Often, the biggest gains have already been realized before the investment attracts the attention of the rearview mirror investor. Assume, for example, that a stock with a $20-per-share value rises to $30, earning $10 per share for the early investors. The performance attracts attention and rearview mirror investors jump in at $30 per share, or higher. Now the stock runs into a slow period and the shares drop to $25 each. The early investors still made a tidy profit. The rearview mirror investors have lost $5 per share, as shown in the following chart.* * This hypothetical illustration is for example only. The rates of return mentioned are not intended to reflect the performance of any actual investment. Investments do not typically grow at an even rate of return and may experience negative growth. Diversification — Designed for a Smoother Ride A diversified portfolio is designed to provide a smoother ride for the investor by spreading risk among investment types. By definition this means a diversified portfolio could include, at any one time, some of the hottest and some of the coolest investment options. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. Long-term, diversified investors don't chase the latest trend. Diversified investors generally expect that some of the best investments could be part of their portfolios — at the beginning of their cycle, not at the end. Rearview mirror investing is, by nature, based on past performance. And allocating your assets based on past performance is simply not a good substitute for focusing on your specific investment goals and sticking to a long-term strategy. Fund objectives, risks, charges, and expenses should be carefully considered before investing. A prospectus containing this and other important information can be obtained by calling (866) 676-7680 or by visiting this page on russell.com. Please read the prospectus carefully before investing. Copyright © Russell Investments 2005. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an as is basis without warranty. Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company. Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional. Securities products and services offered through Russell Financial Services, Inc. (formerly Russell Fund Distributors, Inc.), member FINRA, part of Russell Investments. For information on the Financial Industry Regulatory Authority, go to www.finra.org. RFD 05-5605. First used: November 2005.			Why RUSSELL? See what Russell's diversified investment approach can do for you.   With LifePoints, you get a diversification-rich portfolio in one fund.     RELATED Articles Developing Your Investment Strategy Using Diversification to Combat Risk   Expert INSIGHTS Printer friendly version of this page Send feedback or comments Site Search

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