For many investors, mutual funds are the easiest way to enter the investment marketplace. For a relatively small investment—usually no more than a few hundred dollars—investors can purchase shares of a professionally managed portfolio that usually consists of 50 or more different securities.

When you invest in a mutual fund, your money is pooled with other investors. The investment company then invests this collective pool in a variety of stocks, bonds and/or other securities.

Some mutual funds pay monthly or quarterly dividends, based on the dividends offered by the stocks and the interest payments offered by the bonds in the fund. Other mutual funds hold securities that offer the potential for capital appreciation. When these securities are sold by the fund, the fund distributes the profits from its sale to its investors. Most mutual funds will automatically reinvest your dividends and capital gains into additional shares if you so choose.

Annuities have some particularly attractive features and are one of the most commonly used insurance company products for investment purposes. One of the most prominent features of annuities is tax-deferred growth. Under current tax laws, you will not have to pay taxes on the income generated by the annuity until the money is withdrawn. Deferring the taxes on an interest-bearing account can have a dramatic effect on its eventual earnings.

Annuity contracts go through two distinct phases: the accumulation phase and the payout phase. During the accumulation phase, you pay no current income taxes on the earnings. During the payout phase, the insurance company pays you a percentage of the total account on a regular basis (monthly, quarterly, semi-annually or annually). Part of the distribution is taxed as income and part of it is considered "return of principal" (unless it's inside a tax deferred vehicle, and the contributions were tax deductible, in which case the total distribution is considered taxable income).

Annuities can have either a fixed or variable rate of return. The money in a fixed-rate annuity is generally invested very conservatively by the company issuing the annuity. Variable Annuities produce a varied rate of return based on the performance of the underlying investment portfolios.

Variable annuity contracts may offer a variety of stock, bond, balanced and money market subaccounts, as well as a fixed-interest subaccount. These subaccounts give you access to investment professionals who manage assets according to the stated objectives of the prospectus.

No investment strategy can guarantee a profit or protect against a loss.

You should carefully consider the investment objectives, risks, expenses and charges of the investment company before you invest. Your Northwestern Mutual Investment Services Registered Representative can provide you with a mutual fund prospectus and/or a variable annuity contract and fund prospectus that will contain the information noted above, and other important information that you should read carefully before you invest or send money.