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The Disconnect Between Perception and RealityFranklin Templeton surveyed one thousand Americans in 2010, 2011, 2012 and 2013 and askedthem how the stock market finished at the end of the previous year. Roughly half of respondentsfor each survey answered that the stock market was down or flat.Perception—What U.S. Investors Believe HappenedPercentage ofSurvey RespondentsWho Said the StockMarket Was Downor Flat 466%200949%201070%201131%2012Reality—How the Market PerformedInvestors have continued to take money out of equity funds, in part due to the belief that thestock market has performed poorly in recent years. But has it? As shown in the chart below, whileU.S. stocks experienced a severe downturn in 2008, the next three years were positive, indicatinga misperception about the stock market’s performance.S&P 500 Annual Returns 526.5%15.1%16.0%2.1%20082009201020112012-37.0%4. Sources: The 2010 Franklin Templeton Global Investor Sentiment Survey, designed in partnership with ORC International, included 1,010 telephone responses from participants age 18 and older in theU.S. from 3/25/10 to 3/28/10. The 2011 Franklin Templeton Global Investor Sentiment Survey, designed in partnership with ORC International, included 1,049 online responses from participants age 18 andolder in the U.S. from 1/6/11 to 1/7/11. The 2012 Franklin Templeton Global Investor Sentiment Survey, designed in partnership with Duke University professor Dan Ariely and Qualtrics, included 1,142 onlineresponses from participants age 18 and older in the U.S. from 1/30/12 to 2/13/12. The 2013 Franklin Templeton Global Investor Sentiment Survey designed in partnership with ORC International. Included 501telephone respondents from participants aged 25 years and older in the U.S. with investable assets of $25,000 or greater from 1/14/13 to 1/25/13.5. Source: © 2013 Morningstar. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warrantedto be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Indexes are unmanaged and one cannotinvest directly in an index.4 Time to Take Stock franklintempleton.ca