"The right choice for the long term"

What’s inside:

    * Novel ways shareholders earned extra money to start their first investment portfolios
    * Why it may be time to take a second look at 529 college savings plans
    * The increasing complexity of the bond market and what it means for investors

Departments
2 From the Chairman’s desk
A message from Jim Rothenberg, chairman of Capital Research and Management Company.

4 At the opening
Why investors need to look beyond short-term results; time is running out to take advantage of an excellent tax incentive for charitable contributions; measuring a mutual fund’s risk.

Features
6 An early start
Several shareholders found novel ways to earn the extra money they needed to start their first investment portfolios. Thanks to their motivation and long-term focus — as well as the power of compounding — they turned small sums of money into the achievement of their long-term financial goals.

10 Six questions you may have about 529 college savings plans
Although 529 accounts offer many advantages over other college savings plans, misconceptions linger. We address some common ones and highlight a few lesser known plan benefits.

Download American Funds Investor Magazine, Fall/Winter 2007

PDF format, 558KB, 16Pages.

From the Chairman’s desk:

The idea may be simple but it’s one worth remembering and passing down to children or grandchildren. The sooner you begin investing, the longer the money can work for you. If you invest early, even relatively small amounts can add up with the help of compound interest. More than 30 years ago, Bob and Elena Haase of California discovered that they were growing more pumpkins in their empty lot than they could use. So the Haase children started selling the surplus pumpkins at a nearby park. Over time, the pumpkin proceeds went into an American Funds account to benefit the Haase children and grandchildren. That investment has grown handsomely through the years.

Intrigued with Bob and Elena’s approach, we talked to American Funds shareholders in Indiana and North Carolina about their saving strategies. In Logansport, Indiana, Purdue University veterinary student Christy Bielat financed her education by raising and auctioning cattle at county fairs and investing the proceeds in American Funds. In Winston-Salem, North Carolina, physical education teacher Don Puckett found he could earn extra money in his spare time by turning his passion for exercise and dance into teachers’ workshops and line dancing instruction videotapes.

Through an American Funds automatic investing program, Don was able to save the money he needed to put two sons through college. The story begins on page 6. Speaking of saving for college, the popularity of 529 plans has  grown sharply in recent years. Our story on page 10 answers some of the most common questions investors have about these accounts. Finally, on page 14, fixedincome portfolio counselor David Hoag discusses the growing complexity of bond investing and how bond funds can complement your investment portfolio.

We wish you continued success in all your long-term investment endeavors. Cordially,

James F. Rothenberg
Chairman
Capital Research and Management Company,SM
investment adviser for American Funds

Visit American Funds Website

American Funds has been managing investors’ assets since 1931. We take a conservative long-term approach that’s consistent with the needs of most people saving for the future. That’s why the great majority of our investments are intended for retirement.

At American Funds, we know how important it is to select an experienced manager who understands the value of your trust. This is just one example of what makes us different.

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