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Asset Allocation Model Portfolios
Our asset allocation model portfolios were created using risk balancing and simulation modeling. These portfolios are a simple way for you to have a diversified investment portfolio that needs nothing more than annual rebalancing. Of course you can do better than that by following our active allocation strategy, but you do not need to do that to achieve much better results than 99% of the investment choices being offered to you today, including the Target Date Mutual Funds offered by major mutual fund companies that give no consideration to the risk of the current market environment. In addition to our simulation results, we have included the hypothetical performance results that you could have achieved since we started our newsletter in 2003, or over the past 10 years.
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Active Asset Allocation uses stock market return extremes to rebalance our portfolio between the Retirement Asset Allocation, Conservative Asset Allocation, Insightful Asset Allocation and Aggressive Asset Allocation depending on the stock market environment.
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Asset Class Allocations
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S&P 500
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60% Stocks 40% Bonds
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401k Portfolio
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Retirement Portfolio
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Conservative Portfolio
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Insightful Portfolio
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Aggressive Portfolio
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Cash (T-Bills)
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12%
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Short Bonds
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32%
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10%
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12%
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8%
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4%
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Intermediate Bonds
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8%
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8%
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6%
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5%
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Long Treasury Bonds
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4%
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4%
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4%
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3%
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TIPS
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10%
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10%
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8%
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6%
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Broad Bonds
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40%
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24%
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8%
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10%
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8%
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6%
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High Yield Bonds
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8%
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3%
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4%
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3%
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3%
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Global Bonds
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6%
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8%
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5%
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4%
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Emerging Bonds
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3%
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4%
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3%
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3%
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Debt Securities
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40%
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64%
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64%
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60%
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45%
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34%
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Large Cap Equity
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100%
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30%
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6%
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3%
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3%
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6%
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6%
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Mid Cap Equity
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10%
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7%
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3%
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3%
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6%
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9%
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Small Cap Equity
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10%
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7%
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3%
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3%
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6%
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9%
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International
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10%
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10%
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3%
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4%
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6%
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8%
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Emerging Markets
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4%
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5%
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8%
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10%
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Real Estate(REITS)
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6%
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4%
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4%
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6%
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7%
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Equity Securities
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100%
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60%
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36%
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20%
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22%
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38%
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49%
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Long / Short Equity
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6%
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8%
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7%
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7%
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Long / Short Futures
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10%
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10%
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10%
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10%
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Hedged Securities
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16%
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18%
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17%
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17%
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Total
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100%
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100%
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100%
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100%
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100%
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100%
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100%
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Portfolio Performance
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S&P 500
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60% Stocks 40% Bonds
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401k Portfolio
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Retirement Portfolio
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Conservative Portfolio
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Insightful Portfolio
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Aggressive Portfolio
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1 Year Time Period Simulation Results
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5th Percentile
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41.1
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28.6
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21.0
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17.5
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19.3
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23.5
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27.1
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Mean Total Return
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10.0
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8.8
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7.8
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7.9
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8.4
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9.2
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9.9
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95th Percentile
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(22.1)
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(10.7)
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(5.0)
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(1.4)
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(2.1)
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(5.0)
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(7.3)
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Probability of Loss
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29.0
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23.2
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16.2
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8.1
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9.6
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14.5
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17.4
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Standard Deviation
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19.4
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11.9
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7.9
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5.7
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6.5
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8.7
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10.5
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Worst Case
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(55.2)
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(34.1)
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(22.0)
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(12.4)
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(16.0)
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(22.2)
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(28.1)
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6 Year Time Period (Annualized) Simulation Results
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5th Percentile
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23.7
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17.6
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13.7
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12.4
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12.7
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15.4
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17.5
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Mean Total Return
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8.6
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8.3
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7.6
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7.8
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8.3
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8.9
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9.5
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95th Percentile
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(7.6)
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(0.9)
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1.4
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3.3
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4.0
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2.6
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1.4
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Probability of Loss
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17.5
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6.7
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2.1
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0.2
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0.1
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1.1
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2.9
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Standard Deviation
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9.5
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5.6
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3.8
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2.8
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2.7
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3.9
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4.9
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Worst Case
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(27.4)
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(14.1)
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(5.8)
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(1.7)
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(0.7)
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(4.3)
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(9.8)
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Expected Portfolio Value
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$177,416
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$165,844
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$157,026
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$157,831
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$162,509
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$169,738
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$176,252
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Hypothetical performance since 2003 rebalancing annually.
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Backtested Portfolio
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$145,622
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$165,578
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$165,150
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$165,392
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$174,712
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$187,728
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$198,578
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Backtested Return
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3.0
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7.5
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7.4
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7.5
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8.3
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9.4
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10.3
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Drawdown
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(51.0)
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(32.0)
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(21.1)
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(12.5)
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(14.5)
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(23.2)
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(30.2)
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10 Year Time Period (Annualized) Simulation Results
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5th Percentile
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18.9
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14.5
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11.8
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10.8
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11.7
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13.4
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14.9
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Mean Total Return
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8.3
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8.2
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7.5
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7.8
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8.3
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8.9
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9.5
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95th Percentile
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(2.3)
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2.1
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3.4
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4.7
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4.9
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4.4
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3.9
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Probability of Loss
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9.8
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1.6
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0.1
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0.0
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0.0
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0.1
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0.2
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Standard Deviation
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6.4
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3.8
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2.5
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1.9
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2.1
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2.7
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3.3
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Worst Case
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(19.8)
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(5.4)
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(1.1)
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1.0
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1.4
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(0.5)
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(3.8)
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Expected Drawdown
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(24.9)
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(11.2)
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(5.0)
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(1.7)
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(2.3)
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(4.9)
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(7.3)
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Worst Case Drawdown
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(89.0)
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(56.6)
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(29.3)
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(15.6)
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(19.5)
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(29.7)
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(44.7)
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Expected Portfolio Value
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$259,238
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$232,511
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$212,208
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$213,968
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$224,639
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$241,536
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$257,053
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Hypothetical performance since 1999 rebalancing annually.
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Backtested Portfolio Value
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$103,743
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$163,863
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$184,389
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$203,378
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$215,459
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$220,464
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$224,952
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Backtested Return
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0.3
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4.7
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5.9
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6.8
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7.4
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7.6
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7.8
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Drawdown
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(51.0)
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(32.0)
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(21.1)
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(12.5)
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(14.5)
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(23.2)
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(30.2)
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Need help finding what you are looking for? Search our web site or the Internet.
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© Copyright 2003 - 2009 Insightful Ideas, Inc.
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Site Updated March 04, 2010
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