Risk Compression over Time

Over time, good years and bad years average out. The longer your Investment Horizon, the narrower your range of outcomes will be.click for more information Click the buttons to see the table and chart show various efficient portfolios.  Using history, we start with the portfolio that has the highest minimum return over 30 years with a 5% Chance (95% of the time its returns will be higher).
 

Efficient Over any Annually Over Optimized
Portfolios One Year 30 Years  

Asset Allocation

  Average Return  Money Markets
  Relative Riskclick for more information  US Bonds
5% Chance of Returns  Large Cap Stocks

  being higher than

 Small Cap Stocks
  being lower than  Foreign Stocks

To browse portfolios, click >>

or  

The red dashes in the chart are the average expected returns. There is a 90% chance that your annual return over the period will be in the green ranges (years are shown at top of chart). There is a 5% chance that your annual return will be below the green range, and a 5% chance that it will be above it. The green ranges are called 90% confidence intervals.
 

 
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