Investing Basics

This is an educational tool. As it provides only a rough assessment of a hypothetical asset allocation, it should not be relied upon, nor form the primary basis for your investment, financial, tax-planning or retirement decisions. This analysis is not a replacement for a comprehensive financial plan.

IMPORTANT: The results or other information generated by this tool are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

Your personal and financial situation, the macroeconomic environment, and federal and state tax laws will certainly change over time. Please note that this tool is not a substitute for a comprehensive financial plan, and should not be relied upon as your sole or primary means for making retirement planning or asset allocation decisions. Strategies that may be appropriate at one stage of life or point in time can become inappropriate in the future. Changing needs and circumstances, including changes to the economy and securities markets in general, make it prudent to determine whether your asset allocation should be updated. You should discuss your situation with your financial planner, tax advisor, or an estate planning professional before acting on the information you receive from this tool, and to identify specific issues not addressed by this tool.

The tool does not take into consideration all asset classes. For example, asset classes such as real estate, precious metals, and currencies are excluded from consideration. Asset classes not considered may have characteristics similar or superior to those being analyzed.

In addition, portfolio returns assume the reinvestment of interest and dividends, no transaction costs, no management or servicing fees, and the portfolios are assumed to be rebalanced annually at each calendar year end. Performance returns for actual investments generally will be reduced by fees or expenses not reflected in these hypothetical illustrations.

SAMPLE ASSET ALLOCATION RESULTS

Results are based on the investing style entered in the tool, even if you have implemented a different investing style for your existing brokerage or retirement accounts. The default investing style in the tool is initially set to Moderate Growth. If in the drop-down menu you select a more aggressive or more conservative than the default investing style, the chart and asset allocation shown will update accordingly.

The investing styles in the tool consist of predetermined asset allocations. Asset allocation refers to the process of distributing assets in a portfolio among different asset classes such as stocks, bonds, and cash. The purpose of asset allocation is to reduce risk by diversifying a portfolio. The ideal asset allocation differs based on the risk tolerance and time horizon of the individual investor. The tool uses model asset allocation portfolios that are comprised of the following high-level asset classes in the following proportions:

Other than "cash," it is not possible to invest generically in any of the above asset classes. All assumed rates of return include reinvestment of dividends and interest income. Other investments not considered may have characteristics similar or superior to the asset classes identified above.

The historical rates of return for each sub-divided asset class used in this tool are below and represent dates from 1/1/2002-12/31/2021:

The Best and Worst 12 months is calculated from rolling 12-month returns over the above mentioned 20-year time period. The Average 12 Months is calculated as annualized returns over that same 20-year time period. The returns shown above are hypothetical and for illustrative purposes only. They do not represent performance of the above asset allocation strategies or actual accounts. The information is intended to show the effects on risk and returns of different asset allocations over time based on hypothetical combinations of the benchmark indexes that correspond to the relevant asset class. Hypothetical results have many inherent limitations and no representation is made that any account will or is likely to have returns similar to those shown above.  The asset allocation, indexes, and methodology utilized are broad and simplified, and intended solely for the purpose of providing an overview demonstration.

The historical returns are calculated as the weighted average of the target model weights and the market index returns that represent each asset class. Displayed returns include reinvestment of dividends, and are rebalanced annually. The indexes representing each asset class are: S&P 500® Index (for Large Cap Blend Equity);  Russell 1000 Value (for Large Cap Value Equity) Russell 2000 Index (for Small-Mid Cap Blend Equity); MSCI All Country World ex U.S. Index (for International Equity); Barclays U.S. Aggregate Bond Index (for Fixed Income); and Citi Treasury Bill 3-Month Index (for Cash).  Due to the limitation of other indexes, which were excluded from this illustration due to their shorter time periods, the allocation represented may be more general than an actual recommended allocation (for example, it may exclude particular styles and subsets within equity and fixed income). Indexes are unmanaged, do not incur fees or expenses, and cannot be invested in directly. Actual future returns in any given year can and probably will be significantly different from the historical averages shown.

Past performance is no indication of future results.