Stocks - A Proven History for Long-Term Growth
Everyone seeks good investment returns. Yet, as an investor, you're probably aware of the trade-off between risk and return; the higher your return expectations, the greater the risk you must be willing to assume.
Do the potential rewards of stocks justify the risks? For investors who keep a long-term investment perspective, and assume the risks, the answer is clearly yes.
For years, stocks have provided returns which far surpass bonds, cash and inflation. The table below illustrates how $1,000 in various investment alternatives grew from 09/30/1982 through 09/30/2007 when invested in several market indexes.
Investment Alternative |
Amount Invested 0n 09/30/1982
|
Value at end of 09/30/2007
|
|---|---|---|
| S&P 500 Stock Composite | $1,000 | $24,462 |
| Lehman Brothers Long Gov't | $1,000 | $11,224 |
| Lehman Brothers Credit Bond | $1,000 | $9,452 |
| U.S. 30 Day Treasury Bills | $1,000 | $3,259 |
| Consumer Price Index US | $1,000 | $2,130 |
Source: Thomson Financial
When reviewing this data, you must consider the important differences between investment categories. Of course, the common stocks in which Principal growth-oriented funds invest have a greater risk of loss of principal and price fluctuation than U.S. government securities, such as Treasury bonds and bills which are backed by the full faith and credit of the U.S. government. The market value of Treasury bonds and bills will fluctuate inversely with interest rates prior to maturity, and will equal par value at maturity. The S&P 500 Stock Composite is an unmanaged index and is not available for investment. The market value of stocks and bonds will fluctuate with market conditions. And there is no guarantee that any investment will continue to perform as well as it has in the past.
Before investing in mutual funds, investors should carefully consider the investment objectives, risks, charges and expenses of the funds. This and other information is contained in the free prospectus, which can be obtained by:
- Calling 1.800.222.5852 and requesting a prospectus (all share classes)
- Downloading a prospectus (A, B & C shares)
- Downloading a prospectus (J shares)
- Requesting a prospectus be mailed to you (A, B & C shares)
- Requesting a prospectus be mailed to you (J shares)
Please read the prospectus carefully before investing. See the mutual fund section of our site for a description of the different share classes.
