Risk Factors
Overview of the Components of Risk
Investing in small companies involves greater risk than is customarily associated with larger companies. The value of small companies are subject to more abrupt or erratic price movements than larger companies. Small companies often have limited product lines, markets, or financial resources, and their managements may lack depth and experience. Such companies seldom pay significant dividends that could cushion returns in a falling market.
Companies with growth characteristics can have sharp price declines as a result of earnings disappointments, even small ones. Companies with value characteristics carry the risk that Members will not recognize their intrinsic value for a long time or that they are actually appropriately priced at a low level. Because this Program holds stocks with both growth and value characteristics, the Program may be negatively affected by either set of risks.
Small companies, especially private ones, can be illiquid. In such cases, the Program may have difficulty selling holdings or may only be able to sell the Holdings at prices substantially less than what the fund believes they are worth.
As with any investment, this Program’s value can fall because of weakness in the broad market, a particular industry, or specific holdings. The market as a whole can decline for many reasons, including adverse political or economic developments here or abroad, or changes in investor psychology.
The prospects for an industry or company may deteriorate because of a variety of factors, including disappointing earnings or changes in the competitive environment. In addition, the assessment of Companies held in the Program may prove incorrect, resulting in losses or poor performance even in a rising market.
The Program’s investment approach could fall out of favor with the investing public, resulting in lagging performance versus other types of investment vehicles or funds. Foreign stock Holdings may lose value because of declining foreign currencies or adverse political or economic events overseas. Investments in futures and options, if any, are subject to additional volatility and potential losses.
As with any Program, there can be no guarantee the investment will achieve its objective.
The Program’s value may decline, so when you sell your shares, you may lose money.