AAII Asset Allocation Models

AAII Asset Allocation Models

AAII Asset Allocation Models

aggressive investment allocation -  Our asset allocation area is an unbiased educational resource for anyone interested in asset allocation and portfolio building.

In this area, you'll see the performance of many popular investment benchmarks; plus you'll benefit from being able to review AAII's asset allocation models. The models are designed to help you match your risk level with appropriate asset classes.

Take the Asset Allocation Survey.
Popular Investment Benchmarks   (Data as of 3/31/2016)
Stocks     Standard Deviation     1 yr     5 yrs     10 yrs
Large-Cap Stocks     11.35%     1.65%     11.41%     6.89%
Mid-Cap Stocks     12.52%     -4.02%     9.01%     7.32%
Small-Cap Stocks     13.75%     -7.25%     8.64%     6.68%
International Stocks     13.31%     -8.45%     2.16%     1.93%
Emerging Markets Stocks     16.9%     -12.8%     -4.31%     2.68%
Fixed Income
Intermediate Bonds     3.67%     3.08%     3.7%     5.09%
Short-Term Bonds     0.96%     1.16%     1.07%     2.72%
Overall market
Vanguard Total Stock Market Index (VTSMX)     11.54%     -0.56%     10.86%     6.93%
AAII Asset Allocation Models

What is your investor profile? Follow one of our recommended allocations and check back frequently for monthly return data.
Investor Profile     Standard Deviation     1 yr     5 yrs     10 yrs
Aggressive Investor

    Age 18-35
    30+ Years Investment Horizon

    10.8%     -4.6%     6.2%     5.3%
Moderate Investor

    Age 35-55
    20+ Years Investment Horizon

    8.3%     -2.2%     6.2%     5.5%
Conservative Investor

    Age 55+
    10+ Years Investment Horizon

    5.8%     0.2%     6.3%     5.5%
 Suggested Allocation Breakdowns
Aggressive


   20% Large-Cap Stocks
   20% Mid-Cap Stocks
   20% Small-Cap Stocks
   20% International Stocks
   10% Emerging Markets Stocks
   10% Intermediate Bonds
   0% Short-Term Bonds
    Moderate


   20% Large-Cap Stocks
   20% Mid-Cap Stocks
   10% Small-Cap Stocks
   15% International Stocks
   5% Emerging Markets Stocks
   30% Intermediate Bonds
   0% Short-Term Bonds
    Conservative


   25% Large-Cap Stocks
   10% Mid-Cap Stocks
   10% Small-Cap Stocks
   5% International Stocks
   0% Emerging Markets Stocks
   40% Intermediate Bonds
   10% Short-Term Bonds
Aggressive Portfolio Return
YTD:     1.5%
1 yr:     -4.6%
5 yrs:     6.2%
10 yrs:     5.3%
    Moderate Portfolio Return
YTD:     2.0%
1 yr:     -2.2%
5 yrs:     6.2%
10 yrs:     5.5%
    Conservative Portfolio Return
YTD:     2.1%
1 yr:     0.2%
5 yrs:     6.3%
10 yrs:     5.5%

Broad Allocation Scenarios
Aggressive Investor

Allocations

Aggressive Portfolio Return
1 yr:     -4.6%
5 yrs:     6.2%
10 yrs:     5.3%
   
Characteristics
Growth:     Substantial
Income:     Very Low
Risk:     Substantial Year-to-Year Volatility of Portfolio Value
10%     Average Annual Growth in Value
-30%     Bad Year
   
Time Horizon
Age:     often 18-35
30+Years:     Long Investment Horizon
For investors who are very risk tolerant
Transition:     80% Diversified Stock
20% Fixed Income     Investors, as they age, usually transition their portfolios toward less risky and less aggressive asset allocations.

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Moderate Investor

Allocations

Moderate Portfolio Return
1 yr:     -2.2%
5 yrs:     6.2%
10 yrs:     5.5%
   
Characteristics
Growth:     Moderate
Income:     Low
Risk:     Moderate Year-to-Year Volatility of Portfolio Value
8%     Average Annual Growth in Value
-20%     Bad Year
   
Time Horizon
Age:     often 35-55
20+Years:     Mid-Term Investment Horizon

For investors who can tolerate some risk
Transition:     60% Diversified Stock
40% Fixed Income     Investors, as they get closer to retirement, usually transition their portfolios toward lower risk and more conservative allocations.

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Conservative Investor

Allocations
Conservative Portfolio Return
1 yr:     0.2%
5 yrs:     6.3%
10 yrs:     5.5%
   
Characteristics
Growth:     Low
Income:     Moderate
Risk:     Low Year-to-Year Volatility of Portfolio Value
6%     Average Annual Growth in Value
-15%     Bad Year
   
Time Horizon
Age:     often 55+
10+Years:     Short-Term Investment Horizon

For investors who are not risk tolerant

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