Strategy Allocation a.k.a. Millennial Portfolio TheoryBy: AMIC Advisors, Inc. 2016 All Rights Reserved
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved Research excerpts used with permission.
http://www.amicadvisors.com/tools-ebooks-timeless-information.html
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Investors need more active strategies in order to avoid potential catastrophic drawdowns (think Global Financial Crisis of 2007-2008). As retirement/objective approaches, it becomes more difficult to recover from these drawdowns.
Top 5 Investing Concerns
The Top 5 concerns were: Market Volatility Funding my retirement Investment risk Don’t know where to put my money Fear of investing and/or failing to make
smart choices
$1,000,000 Portfolio Growth Over 20 Years, not to be expected going forward
Stock Bonds HistoricalAnnual Return
HistoricalPortfolio Value at Year 20
100% 0% 10% $6,727,500
90% 10% 9.6% $6,254,766
80% 20% 9.2% $5,813,702
70% 30% 8.8% $5,402,290
60% 40% 8.4% $5,018,635
50% 50% 8% $4,660,957
40% 60% 7.6% $4,327,583
30% 70% 7.2% $4,016,943
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Running out of money in retirement is a very real risk.
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Market declines happen frequently and severely.
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights ReservedStrategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Drawdowns can cause an investor to run out of money.
How would you be affected if it took your portfolio up to 57 months to recover?That’s over 4 and a half years!!!!!
Strategy Allocation a.k.a Millennial Portfolio Theory addresses all of these concerns
The Top 5 concerns were: Market Volatility Funding my retirement Investment risk Don’t know where to put my money Fear of investing and/or failing to make
smart choices
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
How?Avoiding large drawdowns through
active tactical investing mitigates all 5 fears
Strategy Allocation a.k.a Millennial Portfolio Theory addresses all of these concerns
The Top 5 concerns were: Market Volatility Funding my retirement Investment risk Don’t know where to put my money Fear of investing and/or failing to make
smart choices
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
But aren’t market crashes things of the past?
What makes us think that we still need to worry about large, future drawdowns?
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Remember: Market declines happen frequently and severely.
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
In one out of every two years (51% of the time), markets decline from their highs by over 20%!
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Meaningful drawdowns still occur regularly.
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
What do you see happening every 8 years since the 1990’s?
Same 8-year segment (2008-2016) compared against S&P 500 two previous times
#1
#2
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Why is this occurring?
And, more importantly, what can we do about it?
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
This recovery has been embarrassingly weak.
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Continued lackluster growth in working population and Gross Domestic Product (GDP)
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Corporate profits have been declining in recent years. Future profits are likely too optimistic.
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Inflation is the enemy
Problematic since 2001
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Current yield curve has been too flat for too long. Low rates means banks and investment institutions take on more risk.Financial system becomes riskier the longer rates stay low.
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Balanced portfolios have returned 6.7 - 7.2%.The average investor only returned 2.1%.
These scenarios assume that an investor was invested in the market every day.
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
But what if…
…an investor could get returns by being in the market less often than every day?
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
This is what the “Active” component of our strategy allocation accomplishes.You REDUCE RISK when you spend LESS time in the market.
Strategy Allocation a.k.a. Millennial Portfolio TheoryContact us.Let’s discuss how these concepts can be applied to protect and grow your portfolio.
AMIC Advisors, Inc. [email protected]
A new approach for a new era.
Strategy Allocation a.k.a. Millennial Portfolio Theory AMIC Advisors, Inc. 2016 All Rights Reserved
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