Tips for Smart Investing (2024)

1. Original data was based on 1,269 observations and came from a special retirement planning module for the 2004 Health and Retirement Study targeting Americans over the age of 50. Source: Lusardi, Annamaria, and Mitchell, Olivia S., "Financial Literacy and Planning: Implications for Retirement Wellbeing," May 2011, page 29. ©2011 by Annamaria Lusardi and Olivia S. Mitchell. All rights reserved.

Investing involves risks including possible loss of principal.

Diversification, automatic investing, and rebalancing strategies do not ensure a profit and do not protect against losses in declining markets.

You should read the tax-loss harvesting disclosures on the Website and in the Brochure before choosing the tax-loss harvesting feature if you decide to enroll in Schwab Intelligent Portfolios. Neither the tax-loss harvesting strategy for the Schwab Intelligent Portfolios program nor any discussion herein is intended as tax advice. Neither Charles Schwab & Co., Inc. ("Schwab") nor its affiliates, including but not limited to Charles Schwab Investment Advisory, Inc. represent that any particular tax consequences, benefits, or outcomes will be obtained.

Indexes used for Charts 2 and 3

U.S. large company stocks: S&P 500^® Index; U.S. small company stocks: Russell 2000^® Index; Int'l large company stocks: MSCI EAFE^® Index; Int'l small company stocks: MSCI EAFE Small Cap Index; Emerging markets stocks: MSCI Emerging Market Index; REITs: S&P US REIT Index; U.S. Treasuries: Barclays US Treasury 3-7 Year Index; Investment-grade corporate bonds: Barclays US Credit Index; High-yield corporate bonds: Barclays Corporate High-Yield Index; International bonds: Barclays Global Aggregate Ex-USD Index; Emerging markets bonds: Barclays Emerging Markets USD Aggregate Index; Precious metals: S&P GSCI Precious Metals Index; Cash: Barclays US Treasury Bill 1-3 Month Index

Indexes used for Chart 4

U.S. large company stocks: S&P 500^® Index; prior to 1957, the S&P 500 was simulated using a well-accepted methodology provided by Ibbotson; U.S. small company stocks: Russell 2000^® Index; the CRSP 6-8 Index was used prior to 1979; International stocks: MSCI EAFE^® Net of Taxes; Bonds: Barclays U.S. Aggregate Index; the Ibbotson Intermediate-Term Government Bond Index was used prior to 1976; Cash and cash investments: Citigroup 3-Month U.S. Treasury Bill Index; the Ibbotson U.S. 30-day Treasury Bill Index was used prior to 1978.

Index Definitions

Bloomberg Barclays Global Aggregate ex-USD Index is designed to be a broad-based measure of global investment-grade fixed income markets outside of the U.S.

Bloomberg Barclays U.S. Aggregate Index is a market-value-weighted index of taxable investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities, with maturities of one year or more.

Bloomberg Barclays U.S. Corporate High Yield Index covers the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high-yield if the middle rating of Moody's, Fitch, and S&P is Ba1/BB+/BB+ or below.

Barclays U.S. Credit Index measures the investment grade, USD-denominated, fixed-rate, taxable corporate and government-related bond markets. It comprises of the U.S. Corporate Index and a non-corporate component that includes foreign agencies, sovereigns, supranationals and local authorities. The U.S. Credit Index is a subset of the U.S. Government/Credit Index and U.S. Aggregate Index.

Bloomberg Barclays U.S. Treasury Bill 1-3 Month Index includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value. In addition, the securities must be denominated in U.S. dollars and must be fixed rate and non-convertible.

Bloomberg Barclays U.S. Treasury 3-7 Year Index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity between three and seven years.

Bloomberg Barclays Emerging Markets USD Aggregate Index includes USD-denominated debt from emerging markets in the following regions: the Americas, Europe, the Middle East, Africa and Asia.

Citigroup 3-Month U.S. Treasury Bill Index measures monthly total return equivalents of yield averages that are not marked to market. The index consists of the last three three-month Treasury bill issues.

CRSP 6-8 Index is a small-cap index created and maintained by the Center for Research in Security Prices (CRSP) at the University of Chicago's Graduate School of Business. CRSP capitalization-based indexes include common stocks listed on the NYSE, AMEX, and the NASDAQ National Market. The CRSP 6-8 Index refers to the 6th through the 8th deciles and excludes micro-caps.

Ibbotson Intermediate-Term Government Bond Index is constructed from monthly returns of non-callable bonds with maturities of not less than five years, held for the calendar year.

Ibbotson U.S. 30-day Treasury Bill Index is compiled from Wall Street Journal prices for 1977 to the present and the CRSP U.S. Government Bond File from 1926 to 1976.

MSCI EAFE^® Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI EAFE Index consists of the following 21 developed market country indexes: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.

MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The index consists of the following 23 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Russia, Qatar, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.

MSCI EAFE Small Cap Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of small cap representation across developed markets, excluding the U.S. and Canada. Developed market countries in the MSCI-EAFE Small Cap Index include: Australia, Austria, Belgium, Denmark, Finland, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Signapore, Spain, Sweden, Switzerland and the UK.

Russell 2000^® Index is composed of the 2,000 smallest companies in the Russell 3000 Index, which contains the largest 3,000 companies incorporated in the United States and represents approximately 98% of the investable U.S. equity market.

S&P U.S. REIT Index defines and measures the investable universe of publicly traded real estate investment trusts domiciled in the US.

S&P 500^® Index is a market-capitalization-weighted index that consists of 500 widely traded stocks chosen for market size, liquidity, and industry group representation.

S&P GSCI Precious Metals Index provides investors with a reliable and publicly available benchmark for investment performance in the precious metals market.

The indexes are unmanaged, do not incur fees and expenses, and cannot be invested in directly.

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Diversification, automatic investing and rebalancing strategies do not ensure a profit and do not protect against losses.