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Investing Basics
 
 Investing Basics
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Investing terminology can be daunting.  Below are a few terms to help get you started.  

 

Asset Allocation1
Asset allocation is finding the right combination of asset classes – stocks, bonds and/or cash – to balance your expectations for returns with your tolerance for risk. Proper asset allocation takes into consideration your risk tolerance level and personal time horizon to help achieve consistent investment objectives. It also may help spur potential long-term growth, as well as diffuse volatility and prevent large swings in your overall variable product contract value. Asset allocation can be applied to purchase payments for any variable product, if you work to find the right mix. 

 

Rebalancing

When you created your portfolio, you established a "balance" of investments...perhaps a blend of equities, bonds, real estate and money market assets. Over the course of time, the different assets will have different rates of returns, causing your initial allocation to become unbalanced. Selling "winners" and buying "losers" will rebalance your portfolio.

For example, let's say that in January 2016 you established a portfolio that was 60% equities, 30% bonds and 10% cash (money market). By December that portfolio may have changed to 65% equities 28% bonds and 7% cash. In January 2017 you sold some equities to reestablish your allocation of 60%/30%/10%. That's rebalancing.

It is generally recommended that rebalancing be done at consistent intervals of time, in order to remove human error in judgment of timing.

 

Dollar Cost Averaging1
Dollar cost averaging is a technique used by investors who are concerned about investing a large sum of money into volatile assets at one time. By investing a portion of those assets on a regular basis, typically monthly or quarterly, more investment shares are purchased when prices are low and fewer when prices are high.  Over time, the purchase costs are averaged out, lowering the total cost per share.

Establishing a DCA program on an Ohio National variable annuity contract or variable universal life insurance policy will automatically transfer your assets from a Fixed Account or DCA Account (if available) into other investment options on a regularly scheduled basis.

The initial purchase payment amount to be dollar cost averaged is allocated to the appropriate DCA Account, and a portion of the money is moved on a monthly or quarterly basis to the selected variable portfolios over a six- or 12-month period, until the entire amount to be dollar cost averaged has been transferred. Because of the monthly or quarterly transfers, the stated interest rate is not earned on the entire amount allocated to the dollar-cost averaging account; therefore, the daily accrual and the effective yield will be affected. These interest rates do not reflect the performance of any portfolio option available under the contract.

 


1 Asset allocation and Dollar Cost Averaging neither guarantee a gain nor protect against loss in a declining market.

 



Insurance products issued by The Ohio National Life Insurance Company and Ohio National Life Assurance Corporation. Guarantees are based upon the claims-paying ability of the issuer. Product, product features and rider availability vary by state. Issuers not licensed to conduct business in NY. Clients should consult their financial professional on all tax matters.

Not a deposit | Not FDIC insured | Not guaranteed by any bank | May lose value | Not insured by any government agency

Variable Annuity Issuer: The Ohio National Life Insurance Company
Registered Product Distributor: Ohio National Equities, Inc., Member FINRA

Variable annuities are sold by prospectuses, which contain more complete information including fees, surrender charges (contingent deferred sales charges) and other costs that may apply.

To obtain current prospectuses, contact your financial professional or visit ohionational.com/fundinfo. Please read the product and fund prospectuses carefully before you invest or send money. Investors should consider the investment objectives, strategies, risk factors, charges and expenses of the underlying variable portfolios carefully before investing. The fund prospectus contains this and other information about the underlying variable portfolios.

Early withdrawals or surrenders may be subject to surrender charges. Withdrawals are also subject to ordinary income tax and, if taken prior to age 59½, a 10% federal tax penalty may apply. For tax purposes only, withdrawals will come first from any gain in the contract. Federal and state tax laws in this area are complex and subject to change. Consult your personal tax adviser on all tax matters. Withdrawals may reduce the death benefit, cash surrender value and any living benefit amount.

There is no additional tax-deferral benefit for contracts purchased in an IRA or other tax-qualified plan because these are already afforded tax-deferred status. An annuity should only be purchased in an IRA or qualified plan if you value some of the other features of the annuity and are willing to incur any additional costs associated with the annuity.

Variable annuities are long-term investment vehicles designed to accumulate money on a tax-deferred basis for retirement purposes. Upon retirement, variable annuities may pay out an income stream of a series of payments or a lump sum. If you die during the accumulation or payout phase, your beneficiary may be eligible to receive any remaining contract value.

Guarantees are based upon the claims-paying ability of The Ohio National Life Insurance Company. Guarantees do not apply to the investment performance or account value of the underlying variable portfolios. As with any investment, investing in variable portfolios involves risk, including possible loss of principal. 

Product, product features and rider availability vary by state. Issuer not licensed to conduct business in NY.

THIS MATERIAL IS FOR GENERAL USE WITH THE PUBLIC AND IS NOT INTENDED TO PROVIDE INVESTMENT ADVICE FOR ANY INDIVIDUAL.  

THE OHIO NATIONAL LIFE INSURANCE COMPANY AND ITS AFFILIATES HAVE FINANCIAL INTERESTS IN THE SALE OF THE PRODUCT DETAILED WITHIN THIS MATERIAL.

This material contains general information describing Ohio National's plan servicing capabilities and/or investment platform. Ohio National is not providing impartial investment advice or acting in any fiduciary capacity.

Resources

 
Internet Access Agreement
State certificates of authority

©2017 Ohio National Financial Services, Inc.
Product Issuers: The Ohio National Life Insurance Company
and Ohio National Life Assurance Corporation
Registered Products Distributed by: Ohio National Equities, Inc.
Member FINRA
One Financial Way | Cincinnati, Ohio 45242
513.794.6100