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EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS

Be Confident, Be Invested
An Historical Perspective of Stock Market Behavior
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Be Confident, Be Invested

Shock. Fear. Anger. Sell! While this may be a natural progression

when reacting to catastrophic events, avoiding an emotional
response to investing by keeping sight of your investment
objectives during these times is often a determining factor
in long-term success. Of course, gauging the likely path of
the global stock markets is difficult, if not impossible, under
the best of circumstances. That problem could be amplified
by the waves of emotion that investors may experience in the
aftermath of calamitous events.
There are many precedents of bubble-bursting in our financial history, such as
the energy bubble of the 1980s and the technology bubble of the 1990s. We have
also seen our share of financial panics, including the savings and loan crisis
of the late 1980s and early 1990s, the currency crisis of the late 1990s and the
current credit crunch. Continued acts of violence in the Middle East and elsewhere
in the world exacerbate worries over possible terrorism, and add to the list of
events that could rattle global financial markets and economies. Despite the
horrific nature of terrorism and other geopolitical crises, the financial effects
of individual acts tend to be brief, and markets have shown the ability to recover
quickly. In other words, down years are a natural part of equity investing and
in the long run, markets have shown remarkable resiliency in times of crisis.

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How Can Investors Weather Difficult Times?
Be Confident, Be Invested
While no one can predict when markets
will decline or rebound, a strategy of
adding to holdings when markets are
“on sale” may provide significant
advantages versus a strategy of pulling
out of the market.
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3:05 PM Page 5
Be Informed
Understand Market Ups and Downs
Understanding general stock market behavior is an important factor for investing
during good times as well as trying times, and in achieving long-term investment
success. Stocks have historically proven to be a very good investment. This does
not mean that every year will produce a double-digit, or even a positive, return. In
other words, down periods, as well as up, are natural parts of equity investing.
Unpredictable events will have an impact on markets, sometimes negatively.
However, do not let the short-term declines distract you from your long-term goals
or the long-term potential of stock market investing.
Be Invested
Keep Your Money Working for You
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. Often, a few very good days account for a large part of the
market’s total return. By trying to time the market, you potentially miss out on
market rallies that can substantially improve your overall return and long-term
wealth. Thus, what is most important is not timing the market, but rather time in
the market. Staying the course when confronting difficult markets ensures that
investments will be “in” the market on the good days and may ultimately prove
very rewarding.
Be Resolute
Stay the Course
Do not panic and pull out of the market during a downturn. The rallies you miss
could significantly hurt your overall return and impede achieving your investment
goals. Goals that are most important to investors, such as a financially secure
retirement, funding children’s education, providing for the well-being of one’s
own parents, or leaving a legacy to family or charities, require a long-term
perspective. Clouding long-term goals by reacting to short-term events and
interrupting a disciplined investment approach is often counterproductive to
achieving those goals.
Be Opportunistic
Take Advantage of the Downturns
By viewing market declines as great buying opportunities, you could significantly
enhance your long-term return potential when the market rebounds. While no
one can predict when markets will decline or rebound, a strategy of adding to
holdings when markets are “on sale” may provide significant advantages versus
a strategy of pulling out of the market. Furthermore, dollar cost averaging, in which
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you invest a fixed amount of money at regular intervals, is a disciplined investment Investing across multiple asset classes,
strategy that can turn volatility into a potential positive. This strategy ensures that styles, sectors and regions reduces risk
you buy more shares of an investment when prices are low and less when they
and enhances the potential for being
are high. Ultimately, a lower average cost translates to a higher return when the
market swings back up. Since such a plan involves continuous investment in invested in the best-performing asset class
securities regardless of their fluctuating price levels, you should consider your and diminishes the impact of being
financial ability to continue purchases through periods of low price levels.
invested in the worst.
Be Diversified
Reduce Volatility and Enhance Returns
Diversify your investments. Rather than trying to pick a single investment type and
time the market, diversifying across asset classes may decrease your risk and
enhance long-term return potential. Not all investment types perform the same
during similar time periods. Investing across multiple asset classes, styles, sectors
and regions reduces risk and enhances the potential for being invested in the
best-performing asset class and diminishes the impact of being invested in the
worst. This strategy may be especially important in a difficult market environment
when sector rotations and market fluctuations happen continuously. Diversification
may reduce the overall volatility of your entire portfolio while helping you achieve
above-average long-term returns.

Be Confident
Be Invested
Investors have seen a number of shocks and disruptions to global financial markets
caused by both political and economic factors, and markets may react dramatically
in response to specific events. While investors may see the market react dramatically
to horrific events, they should be far more influenced by their long-term goals
and remain disciplined. Maintaining a clear focus on your investment objectives
during difficult times is often a determining factor in long-term success. Seasoned
investors know that in the long run, markets have shown remarkable resiliency in
times of crisis. Investors who are informed, invested, resolute, opportunistic and Please note: All financial investments
diversified can have a greater degree of confidence that their investment goals can involve an element of risk. Therefore, the
be met.
value of your investment and the income
History has shown that markets can be volatile, but you do not have to navigate
from it will vary and your initial investment
these challenging times alone. BlackRock has the experience, insight, global
resources and investments to help you stay the course and meet your financial amount cannot be guaranteed. You should
goals. Through our strengths in the areas of investment excellence, global reach, remember past performance is not a guide
risk management, intellectual leadership and service—as well as our partnership
to future performance and should not be
with your Financial Advisor — you can feel confident that your assets are being
managed by some of the most experienced and best prepared investment the sole factor of consideration when
professionals in the industry. selecting a product.

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Not surprisingly, financial crises tend to be

MSCI World Index: Investing During Uncertain Times
associated with periods of intense market
volatility and in many cases, downturns in 1,800

equity markets. The accompanying chart Annual Total Returns (%)

1970 -1.98 1989 17.19
depicts the MSCI World Index since 1970
SM
1971 19.56 1990 -16.52
1,600 1972 23.55 1991 18.97
and shows that while crises can disrupt
1973 -14.51 1992 -4.66
markets over the short term, over the long 1974 -24.48 1993 23.13
1975 34.50 1994 5.58
term markets have tended to recover. 1976 14.71 1995 21.32
1,400 1977 2.00 1996 14.00
1978 18.22 1997 16.23
1979 12.67 1998 24.80
1980 27.72 1999 25.34
1981 -3.30 2000 -12.92
1,200 1982 11.27 2001 -16.52
1983 23.28 2002 -19.54
1984 5.77 2003 33.76
1985 41.77 2004 15.25
1986 42.80 2005 10.02
1,000 1987 16.76 2006 20.65
1988 23.95 2007 9.57
1983
United States
invades Grenada
800
1970
1982
United States
bombs Cambodia Falkland Islands War

600
1979 Energy bubble-bursting
1979-1980 Union of Soviet Socialist
Republics (USSR) in
Afghanistan
1973
400
Arab oil embargo

1974
Nixon resigns
200

1/70 1/73 1/76 1/79 1/82 1

1970-1979: 8.4% 1980 -1

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2001-2002 2007
Post 9/11; Enron/Worldcom Subprime credit crunch

2000
Technology bubble

2003
1992
War in Iraq
European exchange rate
mechanism (ERM) United
Kingdom currency crisis

1997
Asian stock market crisis 2008
JPMorgan’s acquisition
1990-1991 of Bear Stearns
Gulf War ultimatum

1989 1998
Savings and loan crisis Russian crisis; Long-Term Capital Management failure;
U.S. Embassy bombings in Africa
1995
Oklahoma City bombing

1994
Russia and Mexico crises; Orange County bankruptcy
1987
1993
Black Monday
World Trade Center bombing
1991
1986 Gorbachev coup
United States
bombs Libya

1/85 1/88 1/91 1/94 1/97 1/00 1/03 1/06 6/08

80 -1989: 20.7% 1990-1999: 12.8% 2000-2007: 4.0%

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Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not
constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.
The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. As of June 2007, the MSCI World Index consisted
of the following 23 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal,
Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States.
The opinions expressed are those of BlackRock as of August 2008 and subject to change. There is no guarantee that the forecasts made will come to pass. This material is not intended as an endorsement of any
specific investment. Investment involves risk.
This material has been produced by BlackRock for use by Merrill Lynch Financial Advisors in countries and with clients where Merrill Lynch has the appropriate authorization to market the product and use
this material. BlackRock takes no responsibility for this Merrill Lynch marketing activity.

You should consider the investment objectives, risks, charges and expenses of any BlackRock mutual fund carefully before investing.
Each mutual fund’s prospectus contains this and other information about the fund and is available by contacting your Financial Advisor.
The prospectus should be read carefully before investing. Unless otherwise noted, all information contained herein is as of the date of
the publication of this brochure.
BLACKROCK is a registered trademark of BlackRock, Inc. MSCI WORLD is a registered trademark of Morgan Stanley Capital International.

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