inVesTing For THe Long TermDespiTe VoLaTiLiTY, marKeTs HaVe appreCiaTeD oVer Time

INVESTMENT INSIGHT

source: Thomson reuters Datastream. all data from 31 December 1989 to 31 December 2014. The information provided is for illustrative purposes only and is not meant to represent the past or future performance of any particular investment. it is not possible to invest directly in an index. equities are represented by the FTse all-share index (total return). Bonds are represented by the FTse actuaries UK gilts all stocks index (total return). Cash is represented by three-month LiBor rates. all returns are in sterling terms and are based on monthly closing prices of the respective indices.

Financial markets can be volatile and downturns as well as upturns are part of equity investing. But short-term declines should not detract from the potential of the stock market to help investors meet their goals.

in fact, short-term market declines underline the case for a long-term approach to investing. The chart shows that even with market volatility, an investment in the FTse all-share index 25 years ago would have grown to more than seven times its original value by December 2014.

of course, the investment choices depend on an investor’s specifi c circumstances, goals, attitude to risk and investing time horizon. This will infl uence how much money is allocated and, if appropriate, how much of this is invested in growth-oriented equities. all fi nancial investments involve an element of risk, so the value of your initial investment cannot be guaranteed and the historical performance of markets is not a guide to future returns.

£71,602

£68,125

£39,908

FTSE All Share Annualised 5 Year Returns 1988–1992 14.8% 1993–1997 16.6% 1998–2002 –2.2% 2003–2007 15.4%  2008–2012 2.5%

£20,000

£10,000

£40,000

£60,000

£100,000

£80,000

maastricht Treaty1992

europeansovereigndebt crisis

2010

asiancurrency

crisis1997

september 11th2001

invasionof iraq2003

Dot Compeak 2000

4,000

3,000

subprimeloan problems

emerge2007

LTCmfailure1998

establishmentof the eCB1998

Lehman Brotherscollapses

2008european

m&asurpasses

Us2007

Us losesits ‘aaa’

credit rating2011

FTSE All-Share Annualised 5 year Returns 1990–19949.7%

1995–199920.3%

2000–2004–3.0%

2005–20096.5%

2010–20148.7%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

EQUITIES –9.72% 20.8% 20.49% 28.39% –5.85% 23.85% 16.7% 23.56% 13.77% 24.20% –5.90% –13.29% –22.68% 20.86% 12.84% 22.04% 16.75% 5.32% –29.93% 30.12% 14.51% –3.46% 12.30% 20.81% 1.18%

BONDS 9.61% 16.17% 18.66% 21.01% –6.27% 16.43% 7.3% 14.14% 18.93% –0.88% 8.75% 3.04% 9.25% 2.10% 6.6% 7.93% 0.7% 5.27% 12.81% –1.16% 7.20% 15.56% 2.69% –3.95% 13.85%

cASH 14.89% 11.56% 9.70% 5.99% 5.55% 6.74% 6.16% 6.92% 7.42% 5.55% 6.17% 5.07% 4.06% 3.74% 4.65% 4.75% 4.83% 6.03% 5.52% 1.21% 0.70% 0.87% 0.83% 0.51% 0.54%

267218_3707_Investing During Uncertain Times_UK_P1.indd 1 23/03/2015 12:55

Keeping a Long-Term VieW oF marKeTs is imporTanT

Overseas investments may involve risk of capital loss from unfavourable fluctuation in currency values from differences in generally accepted accounting principles or from economic or political instability in other nations. Smaller company shares can be more unpredictable and less liquid than those of larger company shares. Two main risks related to fixed income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to repay principal and make interest payments. In the event of default, the value of your investment may reduce. Under extreme market conditions, liquidity in bond markets may fall significantly without warning and it may not be possible to sell a security at the last market price quoted or at a value considered to be fair. In extreme market conditions it may be difficult to realise your investments. Funds specialising in commodities may seek exposure to a limited number of market sectors. Compared to funds which spread investment risk more generally through a variety of sectors, price movements may have a greater effect on the overall value of the fund.

This information is intended solely for use by professional advisers in one on one discussions with clients and circulation must be restricted accordingly. BlackRock has not considered the suitability of investment against your individual needs and risk tolerance. To ensure that you understand whether a financial product is suitable, please seek assistance from your professional adviser. Issued by BlackRock Investment Management (UK) Limited (authorised and regulated by the Financial Conduct Authority). Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Registered in England No. 2020394. Tel: 020 7743 3000. For your protection, telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited.© 2015 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, BUILD ON BLACKROCK, SO WHAT DO I DO WITH MY MONEY and the stylized i logo are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. RSM-0354 (Splash/267218/Mar15)

FURTHER INFORMATIONIndividual Investors: please speak to your Financial adviser Adviser Tel: 08457 405 405 Adviser Email: broker.services@blackrock.co.uk Website: blackrock.co.uk

Data as at 31 December 2014. source: Datastream. all sectors in the chart on the left are selected from the FTse all-share index (total return). percentage returns for the different asset classes shown are represented as follows: property is represented by the spgi Bmi UK property index (total return), gilts are represented by the FTse actuaries UK gilts all stocks index (total return). Credit is represented by the FT Fixed interest index (total return). UK equities is represented by the FTse all-share index (total return). The Large Cap sector is represented by the FTse 100 index (total return); the mid-cap by the FTse 250 index (total return) and the small-cap by the FTse small Cap index (total return). The alternative investment market is an international index for smaller growing companies. oil is represented by the London Brent Crude oil index in Us$/bbl. gold is represented by the London Bullion market index in Us$/troy ounce. all other asset classes are in £ sterling. Past performance is no guarantee of future results.

% TEN-yEAR SNApSHOT OF FTSE All-SHARE SEcTOR RETURNS % TEN-yEAR SNApSHOT OF ASSET clASS RETURNS2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Asset Class

property

gilts

Corporate Bonds

UK equities

Large Cap

mid Cap

small Cap

smaller growing Companies (aim)

Crude oil

goldWO

RS

T

BE

ST

61.55 50.50 53.51 42.77 75.37 44.07 15.98 29.76 32.77 20.23

30.84 30.21 29.57 12.81 68.08 33.41 15.57 27.82 32.27 13.86

30.23 20.59 7.36 -9.94 54.27 27.40 11.90 26.11 23.35 12.25

22.40 16.75 5.32 -28.33 50.64 23.85 5.40 15.61 21.33 3.66

22.04 14.43 5.27 -29.93 30.12 19.52 -2.18 12.30 20.81 1.18

20.99 8.59 0.64 -38.15 27.33 14.51 -3.46 9.97 18.66 0.89

20.78 1.53 0.43 -42.34 15.10 12.62 -8.49 2.86 1.93 0.74

8.79 0.83 -2.46 -43.91 13.18 8.67 -10.06 2.70 0.88 -1.78

7.93 0.69 -10.55 -46.35 13.00 7.20 -12.53 0.94 -3.94 -16.53

4.77 -7.48 -37.48 -61.78 -1.16 4.18 -25.19 -1.73 -27.34 -48.62

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sector

oil and gas

Basic materials

industrials

Consumer goods

Health Care

Consumer services

Telecoms

Utilities

Financials

information TechnologyW

OR

ST

BE

ST 46.66 40.30 51.53 9.01 110.60 34.67 18.70 33.62 62.06 14.88

37.17 27.54 27.20 -13.24 78.91 31.03 14.80 32.10 33.65 13.20

36.98 24.36 23.43 -13.51 31.95 28.20 11.98 22.53 33.49 9.65

27.54 23.60 14.06 -16.62 30.49 22.22 9.18 18.25 31.92 3.24

25.88 20.58 10.81 -25.33 29.99 17.78 8.97 18.16 30.69 1.76

20.51 20.44 0.01 -28.39 28.03 15.56 7.49 18.04 20.92 0.89

17.18 20.31 -3.55 -30.99 20.70 14.64 0.02 4.71 17.16 -1.40

16.06 1.59 -5.09 -32.83 11.03 7.99 -5.52 -1.30 12.51 -4.68

15.19 1.49 -5.92 -47.90 10.08 5.04 -19.16 -1.51 11.88 -8.67

3.30 -2.02 -13.76 -54.90 5.27 3.69 -27.52 -7.86 -10.45 -10.24

Here’s why: You can buy investments cheaply during a downturn…By viewing market declines as an opportunity, it is possible to improve your portfolio’s long-term returns as stocks recover. While nobody can predict exactly when markets will decline or rebound, adding to holdings when they are ‘on sale’ may be a smarter move than pulling out of equities when prices fall.

You don’t want to miss the market’s best performing days…over every market cycle, there will be up days and down days. missing even a few of the stock market’s best- performing days can result in significantly lower returns than the market index over the longer-term. often, a few very good days account for a large part of the market’s total return. Being out of the market means you could potentially miss out on rallies that substantially improve your long-term returns. all financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed.

Here’s how to do it wisely:Be diversifiedrather than trying to pick a single investment, spreading your money across a variety of asset classes may decrease your overall risk. it could also enhance the potential for long-term returns. This technique is often called ‘diversification’ and it can be a successful strategy because every investment will not perform in exactly the same way over a similar time period. spreading money across multiple investments, sectors, regions and styles (such as growth or value-oriented stocks) reduces risk and increases the likelihood that the best-performing asset classes will be included in your portfolio. at the same time, diversification can reduce the impact of investing in the worst-performing products. The chart below details a 10-year snapshot of asset class returns. it demonstrates how diversification can be a useful strategy during difficult markets. Diversification and asset allocation may not protect you fully against market risk.

Seek professional adviceHistory has shown that markets can be volatile, but you do not have to navigate challenges alone. Blackrock has the experience, investment insight, global resources and breadth of products to help you stay the course and meet your financial goals. With an unwavering focus on risk management across all our portfolios, you can feel reassured that your assets are being managed by some of the most experienced and best prepared investment professionals in the industry.

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