Smoke Signals 9
APRIL 152013
Description of Investment Options
for the Minors' Custodial Trust & Rabbi Trust
The Age-Based Allocations option provides a way to invest based on the age of the minor. As the minor reaches specific age
milestones, the accounts automatically move to a more conservative allocation. The degree of return and risk varies over time for
this option.
The age groups and investment allocations are as follows:
Age 0-8: Stock 60 Fixed Income 40 (See Option 5 for description)
Age 9-13: Stock 40 Fixed Income 60 (See Option 4 for description)
Age 14-18: Stock 20 Fixed Income 80 (See Option Hi for description)
Age 19-20: No Stock Fixed Income 100 (See Option N2 for description)
The following graphical chart and associated descriptions use color-coding to illustrate investment return expectations and levels of
risk for four (4) fixed allocation investment options: Option 02, Option 3, Option 4 and Option S. The farther to the left an option
diamond appears on the chart line, the lower is the expected gainloss and risk. Thus, the leftmost options are more conservative
and rightmost options are less conservative.
Less
(Lower)
Option 2
Expected Return & Risk
Option 3
Option 4
Option US
More
(Greater)
This investment option seeks current income and stability by investing in a mix of approximately 75 bonds and 25 money market
investments. If this option is selected, the accounts will remain in this allocation until the minor turns age 21 or the parentguardian
changes to a different investment option. Changes between investment options are allowed once per calendar year in May.
Option 2 is the most conservative of the available fixed allocation investment options. In the Expected Return & Risk graphical
chart above, the blue Option 2 diamond is farthest to the left indicating the lowest expected return & risk of the available fixed
allocation investment options.
This investment option seeks current income with minimal growth by investing in a mix of approximately 20 stocks (equity), 55
bonds, and 25 money market investments. If this option is selected, the accounts will remain in this allocation until the minor turns
age 21 or the parentguardian changes to a different investment option. Changes between investment options are allowed once per
calendar year in May.
Option 3 is the second most conservative of the available fixed allocation investment options. In the Expected Return & Risk
graphical chart above, the red Option 3 diamond indicates a somewhat greater expected return & risk compared to Option 02 and
a somewhat lower expected return & risk compared to Option 4.
This investment option seeks current income with moderate growth by investing in a mix of approximately 40 stocks (equity), 55
bonds, and 5 money market investments. If this option is selected, the accounts will remain in this allocation until the minor turns
age 21 or the parentguardian changes to a different investment option. Changes between investment options are allowed once per
calendar year in May.
Option 4 is the second least conservative of the available fixed allocation investment options. In the Expected Return & Risk
graphical chart above, the green Option 4 diamond indicates a somewhat greater expected return & risk compared to Option 3
and a somewhat lower expected return & risk compared to Option 5.
This investment option seeks long-term growth with moderate income by investing in a mix of approximately 60 stocks (equity),
38 bonds, and 2 money market investments. If this option is selected, the accounts will remain in this allocation until the minor
turns age 21 or the parentguardian changes to a different investment option. Changes between investment options are allowed
once per calendar year in May.
Option S is the least conservative of the available fixed allocation investment options. In the Expected Return & Risk graphical chart
above, the purple Option 5 diamond indicates the greatest expected return & risk of the available fixed allocation investment
options.
All of the Investment Options listed above are subject to certain market risks. Investment returns and principal value
of an investment may fluctuate so that your Investment may be worth more or less than original cost.
GLOSSARY OF TERMS
Stocks: Investments that represent ownership in a Corporation in the United States and other countries. Stocks will fluctuate in value
and have the potential to produce a gain or a loss. Professional money managers are used to make the buy and sell decisions.
Fixed IncomeBonds: Investments that are bonds or short term loans to both the US Government and Corporations, in the United States
and other countries. Bonds can and will fluctuate in value and have the potential to produce a gain or a loss. Professional Money
Managers are used to make the buy and sell decisions.
Money Market: Short term investments in US Government and Corporations in the United States and other countries. These are
expected to have very little fluctuation in price. The yield will change from one period to the next period.
Risk: This term is used to explain that there can be gains or losses due to investing in stocks and fixed income investments that will
change in value due to changes in the financial markets and the price buyers and sellers are willing to pay for an investment. The more
risk something has, the more it may change in value from one time period to another, both as a gain or as a loss.
Fixed Allocation: This term is used to describe Options 2, 3, 4 and S. It means that if you invest in this fixed allocation, then for the period
of time you are invested no change to the mix of stocks and fixed income investments will occur.
Stability: The expectation that there will be little or no change in market value due to price changes.
Growth: The increase in value of an investment from price appreciation. This could be a small portion of the total increase in value
(minimal), a bigger component of total increase in value (moderate) or the majority of the increase in value when current income is
minimized (long-term).
Current Income: The increase in value of an investment from actual income being paid versus price appreciation. This could be a small
portion of the total increase in value (minimal), a bigger component of total increase (moderate), or the majority of the increase in value
when current income is emphasized.