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Our passion is helping those in or near retirement reach their goals
Your Retirement Portfolio Should be Segmented Something Like This
To reduce the bumpy ride, by providing a reliable source of ready cash for withdrawal, and the ability to avoid selling stocks in a volatile or down market, your retirement portfolio should be put together in segments, as illustrated in this image.
The tables below will help you think about the balance of stocks and bonds that may suit your personal risk profile within your segmented retirement portfolio.
We Manage To Each Client's Real Life Investment Goals Within Risk Tolerance
"The essence of investment is management of risk, not management of return"
... Benjamin Graham
We manage to individual client goals and limits, not to hypothetical or institutional benchmarks. We seek client specific adequate total return and required income within tolerable risk.
We are also mindful that the most important decision is the allocation between major asset classes, with security selection within reasonable bounds being important but of secondary importance to major asset class allocation. Therefore, we begin each client relationship, and regularly review with our clients, their comfort level with expected returns and risk levels.
The two most important asset classes, other than cash, are bonds and stocks. Therefore, we begin our portfolio design process by helping our clients find their comfort level with the relationship between risk and return, by studying data like that shown in the tables above and below. They prescient several decades of return and risk results from 11 allocations between US bonds and US stocks.
This chart compares the statistically estimated annual returns on above and below the mean return with the actual best and worst annual returns over the past 40 years.
This chart shows the annualized total return of each of the 11 allocations over various holding periods ranging from 1 year to 40 years, each period ending 12/31/2015.
This chart shows the total return of discreet calendar years from 2007 - 2015.
This chart shows the calendar year return of US stocks and US bonds separately for each of the past 40 years. Interest rates have been in decline for most of the past 40 years, which provided boost to bonds total return. That boost will not be available in the next several years, and in fact will be headwind to bonds total return.
Click here for dynamic tables to see how these allocations have done over the past 1 week, 4 weeks, 13 weeks, 26 weeks and 52 weeks.
This chart, of particular interest to those in or near retirement, shows the percentage of the time over the past 40 years, that each of the 11 allocations had a total return of at least the level shown in the head of each column. For example, a 60/40 stock/bond portfolio of US stocks and US investment grade bonds ("Balanced Aggressive") generated a 4% total return 68% of the time, while a 10/90 bonds/stock ("Strongly Conservative") did so 75% of the time.
Think About Which Of These Historical Blends of Benchmark Indexes Best Relate To Your Investment Goals and Personality..
The Harder You Look, The Better We Look
Rely on us to help you evaluate, design and manage your portfolio and investment risks in a way that is appropriate for you, at a fair and affordable cost.
If you seek Quality, Value and Management in your investments and your advisors ... rely on us.
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This dynamic table will help you keep abreast of performance by general asset categories. It is updated weekly.
General Assets Categories
|Returns Through Week Beginning Jun 20, 2016|
|Description||Symbol||1 Wk||4 Wks||13 Wks||26 Wks||52 Wks|
|Stocks: DM Non-US||VEA||-2.99%||-5.94%||-2.10%||-6.57%||-14.35%|
|Bonds: ST Corporate||VCSH||0.00%||0.26%||0.26%||1.07%||1.07%|
|Bonds: IT Corporate||VCIT||0.46%||1.95%||3.51%||6.62%||7.82%|
|Bonds: LT Corporate||VCLT||0.00%||0.06%||0.06%||2.87%||2.87%|
Click here to see multiple rolling year returns and calendar year returns for key asset categories.
See our weekly updated short-term tables for various stock/bond allocations: 90/10; 70/30; 50/50; 30/70 and 10/90.
Click here for allocation tables.
See other useful weekly updated returns tables: