Page 251

251

Step 11: Risk Exposure

Index Portfolio 75

Simulated Passive Investor Experiences (SPIEs)

Based on 50 Years of Monthly Data (January 1, 1964 to December 31, 2013) 600 Months Examples of 13-Year Monthly Rolling Periods 1 1

Jan 64

13 Yrs

Feb 64

2 3

Mar 64

4

Apr 64

1961

1962

Dec 76

13 Yrs

Jan 77

13 Yrs

Feb 77

13 Yrs 1963

1964

1965

1966

1967

1968

Mar 77 1969

1970

1971

1972

1973

1974

1975

1976

1977

Rolling Period Return Data: 50 Years (1964 to 2013) Return Median Per Period # of Median Range Ann'lzd Number of: Rolling Return (High minus Growth of $1 Yrs Months Periods (50th %ile) Low) 0.08 0.25 0.5 1 2 3 4 5 6 7 8 9 10 11 12 13 1 13 14 15 20 30 40 50

1 3 6 12 24 36 48 60 72 84 96 108 120 132 144 156 156

600 598 595 589 577 565 553 541 529 517 505 493 481 469 457 445 445 433 421 361 241 121 1

168 180 240 360 480 600

1.29% 3.69% 6.56% 13.87% 12.75% 11.90% 11.28% 11.24% 10.77% 10.98% 11.31% 11.05% 10.73% 11.03% 11.09% 11.26% 11.26% 11.52% 11.75% 12.96% 12.85% 11.87% 11.55%

$1.01 $1.04 $1.07 $1.14 $1.27 $1.40 $1.53 $1.70 $1.85 $2.07 $2.36 $2.57 $2.77 $3.16 $3.53 $4.00 $4.00

33.73% 54.95% 79.87% 92.68% 59.94% 42.16% 34.08% 29.75% 27.01% 22.03% 18.49% 18.89% 16.21% 17.41% 16.64% 16.38% 16.38%

$4.60 13.97% $5.29 14.64% 10.05% $11.44 4.55% $37.57 2.81% $88.90 0.00% $236.18

Lowest Rolling Period Return

Lowest Rolling Period Date 10/87-10/87 9/08-11/08 9/08-2/09 3/08-2/09 3/07-2/09 3/06-2/09 3/05-2/09 3/04-2/09 1/69-12/74 1/68-12/74 3/01-2/09 3/00-2/09 3/99-2/09 3/98-2/09 3/97-2/09 3/96-2/09 3/96-2/09 3/95-2/09 3/94-2/09 3/89-2/09 7/83-6/13 3/69-2/09 1/64-12/13

Highest Rolling Period Date

Growth of $1 in Lowest Period

-16.74% $0.83 -26.53% $0.73 -35.83% $0.64 -37.29% $0.63 -22.49% $0.60 -12.10% $0.68 -6.23% $0.77 -2.69% $0.87 -3.26% $0.82 0.39% $1.03 2.18% $1.19 2.36% $1.23 4.15% $1.50 3.24% $1.42 4.14% $1.63 4.84% $1.85 4.84% $1.85 5.88% $2.22 5.39% $2.20 7.11% $3.95 10.47% $19.84 10.00% $45.25 11.55% $236.18

1/75-1/75 3/09-5/09 3/09-8/09 3/09-2/10 3/09-2/11 8/84-7/87 7/82-6/86 8/82-7/87 1/75-12/80 8/82-7/89 1/75-12/82 1/75-12/83 9/77-8/87 1/75-12/85 1/75-12/86 10/74-9/87 10/74-9/87 1/75-12/88 10/74-9/89 10/74-9/94 1/75-12/04 12/66-11/06 1/64-12/13

Growth of $1 in Highest Period

Highest Rolling Period Return

16.99% $1.17 28.42% $1.28 44.04% $1.44 55.40% $1.55 37.45% $1.89 30.05% $2.20 27.85% $2.67 27.06% $3.31 23.75% $3.59 22.42% $4.12 20.67% $4.50 21.25% $5.66 20.36% $6.38 20.65% $7.88 20.78% $9.63 21.22% $12.20 $12.20 19.84% $12.60 20.04% $15.48 17.16% $23.75 15.02% $66.63 12.81% $124.05 11.55% $236.18

13-Year 1 Monthly Rolling Periods: 50 Years (1964 to 2013) Total of 445 Rolling Periods 120 110 100 90 80 70 60 50 40 30 20 10 0

5th* 6.75%

0

1

2

3

4

5

6

7

8

25th* 9.44%

50th* 11.32%

9

11

10

12

75th* 15.31%

13

14

15

16

*Percentile ranking of all the rolling periods.

95th* 18.79%

17

18

19

20

21

22

23

24

25

Annualized Returns for 13-Year Monthly Rolling Periods (%) 13-years represents the estimated average holding period for investors who score 75 on the Risk Capacity Survey at ifa.com. The Median Annualized Returns, Return Range, and Median Growth of $1 shown for 1, 3, and 6 month periods are not annualized. Sources, Updates, and Disclosures: ifabt.com, Appx A

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