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Investment Fundamentals

Investing success isn't about luck. It's about knowledge. By practicing these basic fundamentals, you'll have the foundation for a lifetime of investing.

Fight inflation

People invest to make money. But there's another reason - to fight inflation. Save the money you earn under a mattress and you may end up losing some of its value when consumer prices go up. Get invested and try to get a step up on inflation.

Use the power of compounding

Compounding means you earn money on the money your investments make. If you invest in a product that has regular interest, like a Certificate of Deposit (CD), you only receive interest on your original investment. When you invest in mutual funds or similar investments that have growth potential, as an increase in the investment value occurs, it compounds at a faster rate because you earn money on principal as well as the growth that was earned earlier.

Say you invested $1,000 and it pays 5% regular interest each year - you would get $50 each year. Now consider a mutual fund investment where you invested the same amount and earned the same 5% annual return for the same number of years. Since the investment earnings are compounded and you make money on the money your investment earned earlier, your investment value is greater every year than it would be had the interest not been compounded. As the chart illustrates, the power of compounding adds up over time.

  5% Regular Interest 5% Compounded Earnings
Initial Investment $1,000 $1,000
End of Year 5 $1,250 $1,276
End of Year 10 $1,500 $1,629
End of Year 15 $1,750 $2,079
End of Year 20 $2,000 $2,653
End of Year 25 $2,250 $3,386

Other fees and expenses apply to a continued investment in a mutual fund and are described in the Fund's current prospectus. The rates of return are hypothetical and do not represent the returns of any particular investment.

Balance growth & safety

It's true that stocks and stock funds have historically outpaced more conservative investments and inflation by a wide margin over the long run. But over shorter time periods, stocks have also been more volatile. Deciding how to invest is a balancing act and it's all about your time horizon. If you will need your money soon, keep it in more conservative investments. But if you have a longer time horizon, consider the historical market trends and explore opportunities that may allow you to benefit from stock market's growth potential.

Know your limits

Finding the right balance is also about knowing yourself. Try to develop a sense of how you might respond to market volatility and take that into account when you determine your asset allocation. We can help you. Take the simple test in our Asset Allocation Planner to discover your investor profile. The Planner will suggest a mix of investments that potentially fits your risk tolerance.

Learn more about how to invest for the long term.

Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus , or if available, a summary prospectus containing this and other information. Read it carefully before you invest or send money.

A Fund's performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.

There is no assurance that the investment process will consistently lead to successful investing.

Past performance is no guarantee of future results.

There is no assurance the stated objective(s) will be met.

Diversification and asset allocation do not assure a profit or eliminate the risk of experiencing investment losses. Investment decisions should be based on an individual's own goals, time horizon and tolerance for risk.

Janus Distributors LLC