BALANCE RISK AND REWARD Asset classes perform differently over time: Stocks offer the potential for the highest returns over the long term, but they also carry the highest risk. Bonds historically aren't as lucrative, but they tend to be more stable than stocks. Cash equivalent returns are relatively low, but their stability can provide peace of mind as they tend to keep pace with inflation. The past few years are great examples of typical asset class behavior. If you diversified among asset classes, you helped control your risk and reward based on your personal tolerance for risk and what rewards you expected.  STOCKS AND BONDS PERFORM DIFFERENTLY Over a 20 year period (1983-2002), stocks and bonds had different levels of return. Source: Standard & Poor's 500® Composite Stock Price Index (U.S. stock market), the Russell 2000® Index (small-company stocks), and the Lehman Brothers Aggregate Bond Index (U.S. and corporate bonds). Performance is based on average annual total returns and reflects reinvestment of dividends. Indices are unmanaged and cannot be invested in directly.

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