Why We Do It

risk (risk)

A situation involving exposure to danger.

Hypothetical Portfolio Illustration

Symmetric approach to returns places equal emphasis on risk and reward. Steady portfolios compound at better rates of return in volatile markets. 

  STEADY VOLATILE
Simple Return 6% 6%
Compound Return 19% 12%
Annualized Return 6% 4%

Lower Risk. Steady Return.

A HISTORY OF MARKET DECLINES (1900-2015)

DECLINE %FREQUENCY1AVERAGE LENGTH2LAST OCCURENCE
5% OR MOREAbout 3 times/year47 daysSeptember 2015
10% or moreAbout once/year115 daysSeptember 2015
15% or moreAbout once/2 years115 daysSeptember 2015
20% or moreAbout once/3 ½ years338 daysMarch 2009

Source:  Capital Management & Research Company.  1.  Assumes 50% recovery rate of lost value.  2.  Measure market high to market low.