<PAGE>
FUND PROFILE
____________, 1999
T. Rowe Price Personal Strategy Funds
Personal Strategy Income Fund
A fund seeking income and capital growth by investing in a mix of stocks,
bonds, and money market securities.
This profile summarizes key information about the fund that is included in the
fund's prospectus. The fund's prospectus includes additional information about
the fund, including a more detailed description of the risks associated with
investing in the fund that you may want to consider before you invest. You may
obtain the prospectus and other information about the fund at no cost by
calling 1-800-638-5660, or by visiting our Web site at www.troweprice.com.
What is the fund's objective?
The fund seeks the highest total return over time, with a primary emphasis on
income and a secondary emphasis on capital growth.
What is the fund's principal investment strategy?
The fund typically invests in a diversified portfolio consisting of about 40%
stocks, 40% bonds, and 20% money market securities. Under normal conditions,
allocations for the fund can vary by 10 percentage points above or below
these ranges, based on our outlook for the economy and the financial markets.
Under unusual conditions, the fund may invest in money market securities
without limitation for temporary defensive purposes.
When deciding upon allocations within these prescribed limits, the manager
may favor fixed income securities if the economy is expected to slow
sufficiently
<PAGE>
to hurt corporate profit growth. The opposite may be true when strong
economic growth is expected. And when selecting particular stocks to
purchase, the manager will examine relative values and prospects among
growth- and value-oriented stocks, domestic and international stocks, and
small- to large-cap stocks. This process draws heavily upon T. Rowe Price's
proprietary stock research expertise. While the fund maintains a
well-diversified portfolio, the manager may at a particular time shade stock
selection toward markets or market sectors that appear to offer attractive
value and appreciation potential. Much the same security selection process
applies to bonds. For example, when deciding on whether to adjust allocations
to high-yield (junk) bonds, the manager will weigh such factors as the
outlook for the economy and corporate earnings and the yield advantage
lower-rated bonds offer over investment-grade bonds.
<TABLE>
Fund Summary
<CAPTION>
<C> <C> <C> <S>
Strategy Benchmarks Ranges
Invests at least 65% of total assets in income- 40% Stocks 30 - 50%
producing bonds and dividend-paying stocks. 40% Bonds 30 - 50
20% Money markets 10 - 30
----------------------------------------------------------------------------------------
</TABLE>
Securities may be sold for a variety of reasons, such as to effect a change
in asset allocation, secure a gain, limit a loss, or redeploy assets into
more promising opportunities.
Further information about the fund's investments, including a review of
market conditions and fund strategies and their impact on performance, is
available in the annual and semiannual shareholder reports. To obtain free
copies of any of these documents, call 1-800-638-5660.
What are the main risks of investing in the fund?
The fund's program of investing in stocks, bonds, and money market securities
exposes it to a variety of risks. Each of these risks is proportional to the
percentage of assets the fund has in these securities. They include:
. Risks of stock investing Stock prices 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, changes in investor psychology, or heavy
institutional selling. 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, our assessment of
companies held in the fund may prove incorrect, resulting in losses or poor
performance even in a rising market. Finally, the fund's investment approach
could fall out of favor with the investing public, resulting in lagging
performance versus other types of funds.
<PAGE>
. Risks of bond investing Bonds are debt securities, meaning the issuer has a
contractual obligation to pay interest at a fixed rate on specified dates and
to repay the principal (face value) upon maturity. Bonds in the fund have two
main sources of risk. Interest rate risk is the decline in bond prices that
usually accompanies a rise in interest rates. Longer-maturity bonds typically
suffer greater declines than those with shorter maturities. Credit risk is
the chance that any fund holding could have its credit downgraded, or that a
bond issuer will default (fail to make timely payments of interest or
principal), potentially reducing the fund's income level and share price.
While the fund expects to invest primarily in investment-grade bonds, it may
also hold high-yield (junk) bonds, including those with the lowest rating.
Investment-grade bonds are those rated from the highest (AAA) to medium (BBB)
quality, and high-yield bonds are rated BB and lower. The latter are
speculative since their issuers are more vulnerable to financial setbacks and
recession than more creditworthy companies, but BBB-rated bonds may have
speculative elements as well. High-yield bond issuers include small companies
lacking the history or capital to merit investment-grade status, former blue
chip companies downgraded because of financial problems, and firms with heavy
debt loads.
. Risks of foreign securities To the extent the fund invests in foreign
stocks and bonds, it is also subject to the special risks associated with
such investments whether denominated in U.S. dollars or foreign currencies.
These risks include potentially adverse political and economic developments
overseas, greater volatility, less liquidity, and the possibility that
foreign currencies will decline against the dollar, lowering the value of
securities denominated in those currencies.
As with any mutual fund, there can be no guarantee the fund will achieve its
objective.
3 The fund's share price may decline, so when you sell your shares, you may
lose money. An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for risk. The fund is designed for investors seeking income
primarily, but also some capital growth.
The fund can be used in both regular and tax-deferred accounts, such as IRAs.
3 The fund should not represent your complete investment program or be used
for short-term trading purposes.
<PAGE>
How has the fund performed in the past?
The bar chart and the average annual total return table indicate risk by
illustrating how much returns can differ from one year to the next. The
fund's past performance is no guarantee of its future returns.
The fund can also experience short-term performance swings, as shown by the
best and worst calendar quarter returns accompanying the following chart. The
returns are only for the years depicted in the chart.
<TABLE>
INSERT PSI BAR
CHART HERE
<CAPTION>
Calendar Year Total Returns
-------------------------------
<S> <C>
"95" 24.71
"96" 11.79
"97" 15.01
"98" 11.50
-------------------------------
</TABLE>
Quarter ended Total return
Best quarter 6/30/97 8.01%
Worst quarter 3/31/97 -0.54%
<TABLE>
Average Annual Total Returns
<CAPTION>
Periods ended December 31, 1998
Since inception
1 year (7/29/94)
<S> <C> <C> <S>
Personal Strategy Income Fund 11.50% 14.24%
-------------------------------------
Lehman Brothers Aggregate Bond Index 8.69 8.76
Combined Index Portfolio/a/
(40% Stocks, 40% Bonds, 16.15 15.49
20% Money Markets)
------------------------------------------------------------------------------------------------
</TABLE>
These figures include changes in principal value, reinvested dividends, and
capital gain distributions, if any.
/ a/The securities indexes used as comparisons for the stock, bond, and money
market portions of the fund are the S&P 500, the Lehman Brothers Aggregate
Bond Index, and 90-day Treasury bills, respectively.
What fees or expenses will I pay?
The fund is 100% no load. There are no fees or charges to buy or sell fund
shares, reinvest dividends, or exchange into other T. Rowe Price funds. There
are no 12b-1 fees.
<PAGE>
<TABLE>
Fees and Expenses of the Fund
<CAPTION>
Annual fund operating expenses
(expenses that are deducted from fund assets)
----------------------------------------------------------------------------
<S> <C> <S>
Management fee 0.47%/a/
-----------------------------------------------
Other expenses 0.63%
-----------------------------------------------
Total annual fund 1.10%
operating expenses
-----------------------------------------------
Fee waiver/reimbursement 0.15%
-----------------------------------------------
Net expenses 0.90%/a/
---------------------------------------------------------------------------------
</TABLE>
/a /T. Rowe Price is contractually obligated to waive its fees and bear any
expenses to the extent such fees or expenses would cause the fund's ratio of
expenses to average net assets to exceed the indicated percentage
limitations. Fees waived or expenses paid or assumed are subject to
reimbursement to T. Rowe Price by the fund through the indicated
reimbursement date, but no reimbursement will be made if it would result in a
fund's expense ratio exceeding its specified limit. A summary of the fund's
expense limitation and the periods for which it is effective is set forth
below:
<TABLE>
<CAPTION>
<C> <C> <C> <S>
Limitation Period Expense Ratio Limitation Reimbursement Date
6/1/98-5/31/00 0.90% 5/31/02
6/1/96-5/31/98 1.05% 5/31/00
-----------------------------------------------------------------------------------------------------------------------
6/1/98-5/31/00 1.10% 5/31/02
</TABLE>
Previously the fund operated under a 0.95% expense ratio limitation that
expired on May 31, 1998. Effective June 1, 1998, T. Rowe Price agreed to
extend the limitation period through May 31, 2000, and lower the expense
limitation from 0.95% to 0.90%, as reflected in the table above. Any accrued
fees or expenses are subject to reimbursement to T. Rowe Price by the fund
whenever the fund's expense ratio is below 0.95% (for the first agreement) or
below 0.90% (for the second agreement). However, no reimbursement will be
made after May 31, 2000 (for the first agreement), May 31, 2002 (for the
second agreement), or if it would result in the expense ratio exceeding 0.95%
(for the first agreement) or 0.90% (for the second agreement).
Example. The following table gives you a rough idea of how expense ratios
may translate into dollars and helps you to compare the cost of investing in
this fund with that of other funds. Although your actual costs may be higher
or lower, the table shows how much you would pay if operating expenses remain
the same, the expense limitation currently in place is not renewed, you
invest $10,000, you earn a 5% annual return, and you hold the investment for
the following periods:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 year 3 years 5 years 10 years
$92 $ $ $
332 598 1,386
----------------------------------------------------
</TABLE>
Who manages the fund?
The fund is managed by T. Rowe Price Associates, Inc. Founded in 1937, T.
Rowe Price and its affiliates manage investments for individual and
institutional accounts. The company offers a comprehensive array of stock,
bond, and money market funds directly to the investing public.
Edmund M. Notzon manages the fund day-to-day and has been chairman of its
Investment Advisory Committee since 1998. He has been managing investments
since joining T. Rowe Price in 1989.
<PAGE>
The following questions and answers about buying and selling shares and
services do not apply to employer-sponsored retirement plans. If you are a
participant in one of these plans, please call your plan's toll-free number for
additional information.
How can I purchase shares?
Fill out and return a New Account Form in the postpaid envelope, along with
your check. The minimum initial purchase is $2,500, ($1,000 for IRAs and
gifts or transfers to minors) or $50 if investing through Automatic Asset
Builder, our no-cost systematic investment plan for T. Rowe Price investors.
The minimum subsequent investment is $100 ($50 for IRAs, gifts or transfers
to minors, or Automatic Asset Builder). You can also open an account by bank
wire, by exchanging from another T. Rowe Price fund, or by transferring
assets from another financial institution.
How can I sell shares?
You may redeem or sell any portion of your account on any business day.
Simply write to us or call. You can also access your account at any time via
Tele*Access /(R)/ or our Web site. We offer convenient exchange among our
entire family of domestic and international funds. Restrictions may apply in
special circumstances, and some redemption requests need a signature
guarantee. A $5 fee is charged for wire redemptions under $5,000.
When will I receive income and capital gain distributions?
The fund distributes income, if any, quarterly and net capital gains, if any,
at year-end. For regular accounts, income and short-term gains are taxable at
ordinary income rates, and long-term gains are taxable at the capital gains
rate. Distributions are reinvested automatically in additional shares unless
you choose another option, such as receiving a check. Distributions paid to
IRAs and employer-sponsored retirement plans are automatically reinvested.
What services are available?
A wide range, including but not limited to:
. retirement plans for individuals and large and small businesses;
. automated information and transaction services by telephone or computer;
. electronic transfers between fund and bank accounts;
. automatic investing and automatic exchange;
. brokerage services; and
. asset manager accounts.
<PAGE>
NEW ACCOUNT FORM (LOGO)
You may purchase shares of a T. Rowe Price fund after
reviewing the information in the profile or after requesting
and reviewing the fund's prospectus (and other information).
Please note: an IRA will not be established using this form.
If you want to open an IRA, call 1-800-638-5660 to request
an IRA New Account Form.
Mail this form to: T. Rowe Price
P.O. Box 17300, Baltimore, MD 21298-9353
For help with this form, call toll free 1-800-638-5660.
Please do not remove the mailing label from this form.
1 PROVIDE YOUR TAX IDENTIFICATION NUMBER
Owner's or Minor's Social Security or Tax ID Number
(Use Minor's Social Security Number for Custodial Account)
_ _ _ _ _ _ _ _ _
Joint Owner's or Custodian's Social Security or Tax ID Number
_ _ _ _ _ _ _ _ _
2 DESIGNATE TYPE OF ACCOUNT AND OWNER NAME(S)
Please print in CAPITAL LETTERS. Choose one:
__ Individual or Joint Account.*
*Joint tenancy with right of survivorship unless you instruct otherwise.
Owner's Name (First, Middle Initial, Last)
________________________________
Title: Mr. Ms. Mrs. Dr.
Joint Owner's Name (First, Middle Initial, Last)
________________________________
Title: Mr. Ms. Mrs. Dr.
__ Custodial Account.
Uniform Gift or Transfer to Minors Act (UGMA or UTMA)
Custodian's Name (First, Middle Initial, Last)
________________________________
Minor's Name (First, Middle Initial, Last)
________________________________
State of Residence (Minor's or Custodian's)
________________________________
__ Trust, Corporation, Business, or Other Entity Account.*
*Please attach the first and last pages of the trust agreement or a copy
of
the corporate resolution.
Name of Trust, Corporation, or Other Entity
_________________________________________________________
Trustee Names or Type of Entity
________________________________________________________
<PAGE>
Name of Trust Beneficiary (Optional) Date of Trust Agreement
________________ __-__-__
month day year
__ Check this box if your organization is incorporated or tax-exempt under
Section 501(a) of the Internal Revenue Code, a qualified retirement plan
under Section 401(a), or a custodial account under Section 403(b)(7),
and
you DO NOT want us to file information returns on your behalf.
3 PROVIDE YOUR ADDRESS
Street Address or P.O. Box
__________________________________________________
__________________________________________________
City State
____________________ __
ZIP Code
_ _ _ _ _ - _ _ _ _
4 PROVIDE OTHER ACCOUNT DATA
Daytime Phone Ext.
_ _ _ _ _ _ - _ _ _ _ _ _ _ _
Evening Phone Ext.
_ _ _ _ _ _ - _ _ _ _ _ _ _ _
Date of Birth (Owner/Minor)
Date of Birth (Joint Owner/Custodian)
_ _ - _ _ - _ _ _ _ - _ _ - _ _
month day year month day year
__ U.S. Citizen __ Resident Alien
__ Nonresident Alien. My permanent foreign address for tax purposes is:
_____________________________________
_____________________________________
Owner's Occupation / Employer Name (Optional)
_____________________________________
Employer Address (Optional)
__________________________________________________________________________
5 SELECT YOUR FUND(S)
Please print the fund name(s) exactly as listed inside the Investment Kit you
received with this form. Fill in the amount of your investment for each fund.
The minimum initial investment is $2,500 per fund ($1,000 for UGMAs/UTMAs)
but is waived if you use Automatic Asset Builder (see Sections 6 and 7E).
Fund Name Amount
__________________________________ $________
Fund Name Amount
__________________________________ $________
Fund Name Amount
__________________________________ $________
<PAGE>
Fund Name Amount
__________________________________ $________
Total Investment$________
6 CHOOSE YOUR INVESTMENT METHOD
A. __ By check.
Make payable to T. Rowe Price Funds. (Otherwise it may be returned.)
B. __ By Automatic Asset Builder.
See Section 7E for instructions.
C. __ By wire.
Please call 1-800-225-5132 for the following information and wiring
instructions:
Account Number
_ _ _ _ _ _ _ _ _ _ - _
Date of Wire
_ _ - _ _ - _ _
month day year
(over, please)
7 SELECT YOUR ACCOUNT SERVICE OPTIONS
A. TO RECEIVE YOUR DISTRIBUTIONS
Your dividends and capital gains will be reinvested unless you indicate
------
otherwise.
__ Pay dividends and capital gains to me by check.
__ Transfer dividends and capital gains to my bank account.
(Please complete Section 7C if you elect this option.)
__ Pay dividends to me by check and reinvest capital gains.
B. TO EXCHANGE AND REDEEM FUND SHARES
You can use the telephone or your personal computer to check your account
balance, redeem shares, or make exchanges among any identically registered
accounts unless you check the boxes below.
------
__ I do NOT want telephone/computer exchange.
__ I do NOT want telephone/computer redemption.
C. TO MAKE TRANSFERS BETWEEN YOUR BANK AND T. ROWE PRICE
This service makes purchasing or redeeming fund shares even more convenient.
Simply call a T. Rowe Price representative or Tele*Access (R) and your
transaction
will be processed by electronically moving money between your bank
account and your mutual fund accounts.
Transfers occur only when you initiate them ($100 minimum) and are made
through the Automated Clearing House (ACH) network or by wire.* This service
becomes available approximately 20 days after your application is
processed. Since you initiate transfers by phone or computer, be sure that
you did not decline the phone/computer redemption service above.
<PAGE>
__ Check this box to set up this service. YOU MUST ALSO ATTACH A BLANK,
VOIDED CHECK (other than your investment check) from your bank
account to this form.
Any co-owner of your bank account who is not a co-owner of
---
your mutual fund account must sign below.
X___________________________________________
Bank Account Co-owner's Signature
*There is a $5 fee for wire redemptions under $5,000 but no fee for ACH
transactions.
ATTACH VOIDED CHECK HERE
D. TO SET UP CHECKWRITING
You can write checks for $500 or more on all T. Rowe Price money market and
bond fund accounts (except the High Yield and Emerging Markets Bond funds).
Those authorized to write checks should read the checking agreement and sign
below.
By signing this form, I agree to all of State Street Bank's checking account
rules, and to any conditions and limitations on redeeming checks from the
T. Rowe Price Funds. I also agree that:
(1) This form applies to any other identically registered T. Rowe Price
fund checking account I establish later;
(2) If I am subject to IRS backup withholding, I may write checks only on
money fund accounts;
(3) State Street Bank and the Fund reserve the right to change, revoke, or
close any checking account;
(4) The signatures are authentic, and, for organizations, I have submitted
an original or certified resolution authorizing the individuals with legal
capacity to sign and act on behalf of the organization.
(Do not detach this section from the rest of the form.)
_____________________________________________________
Fund Name Fund Name
_____________________________________________________
Print Name of Owner, Custodian, or Trustee
X___________________________________________________
Signature Date
_____________________________________________________
Print Name of Joint Owner, Co-trustee, Corporate Officer, etc.
X___________________________________________________
Signature Date
How many signatures do you require on checks?
__ Only one owner __ All owners
G00-008 6/30/98
<PAGE>
E. TO SET UP AUTOMATIC ASSET BUILDER
This service allows you to automatically invest in your fund account through
your
bank account and/or payroll deduction each month (minimum $50 per fund).
___ Check this box to invest from your bank account.
Be sure to complete Section 7C and fill in the information below.
Fund Name
__________________________________________________________________________
Amount Day of Month You Would Like to Invest
__________________________________ ____
Fund Name
__________________________________________________________________________
Amount Day of Month You Would Like to Invest
_____________________ ___
Fund Name
__________________________________________________________________________
Amount Day of Month You Would Like to Invest
_____________________ ___
Fund Name
__________________________________________________________________________
Amount Day of Month You Would Like to Invest
_____________________ ___
____ Check this box to invest through payroll deduction.
T. Rowe Price will mail you instructions for this service.
8 SIGN YOUR NEW ACCOUNT FORM
By signing this form, I certify that:
- - I agree to be bound by the terms of the prospectus for each fund in which
I am investing. If I am purchasing shares after reviewing a fund profile, I
understand that I will receive the prospectus after I purchase shares in the
fund. I have the authority and legal capacity to purchase mutual fund shares,
am of legal age in my state, and believe each investment is suitable for me.
- - I authorize T. Rowe Price, the Funds, their affiliates and agents to act on
any
instructions believed to be genuine for any service authorized on this form,
including telephone/computer services. The Funds use reasonable procedures
(including shareholder identity verification) to confirm that instructions
given by telephone/computer are genuine, and the Funds are not liable for
acting on these instructions. (If these procedures are not followed, it is the
opinion of certain regulatory agencies that the Funds may be liable for any
loss that may result from acting on instructions given.) I understand that
anyone who can properly identify my account(s) can make phone/computer
transactions on my behalf.
- - The Funds can redeem shares from my account(s) to reimburse a fund for
any loss due to nonpayment or other indebtedness.
<PAGE>
- - By selecting the electronic transfer service in Section 7C, I hereby authorize
T. Rowe Price to initiate credit and debit entries to my (our) account at the
Financial Institution indicated and for the Financial Institution to credit or
debit the same to such account through the Automated Clearing House
(ACH) system, subject to the rules of the Financial Institution, ACH, and the
Fund. T. Rowe Price may correct any transaction error with a debit or credit
to my Financial Institution account and/or Fund account. THIS AUTHORIZATION,
including any credit or debit entries initiated thereunder, is in full
force and effect until I notify T. Rowe Price of its revocation by telephone
or in writing and T. Rowe Price has had sufficient time to act on it.
- - Under penalties of perjury, the tax identification number(s) shown on
this form is correct. If I fail to give the correct number or fail to sign this
form, T. Rowe Price may reject, restrict, or redeem my investment. I may
also be subject to IRS backup withholding (currently 31%) on all
distributions and redemptions, and I may be subject to a $50 IRS penalty.
- - Under penalties of perjury, I am NOT subject to IRS backup withholding
because 1) I have not been notified, or 2) notification has been revoked
(cross out "NOT" if you are currently subject to withholding), or 3) I have
indicated in Section 4 that I am a nonresident alien and certify that for
dividends I am not a U.S. citizen or resident (or I am filing for a foreign
corporation, partnership, estate, or trust).
- - For clarification on any of these certification issues, please contact us for
assistance.
- - The IRS does not require your consent to any provision of this document
other than the certifications required to avoid backup withholding.
PLEASE SIGN HERE
X__________________________________________________
Signature of Owner, Custodian, or Trustee Date
X__________________________________________________
Signature of Joint Owner, Co-trustee, Corporate Officer, etc. Date
Thank you for your investment. You will receive a confirmation shortly.
8
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