Investment Strategy Details
In general, the investment lifecycle can be divided into one of two phases: the accumulation
phase and decumulation phase.
• The accumulation phase begins when an investor enters the workforce, typically in one’s
early 20s, and begins saving and investing toward retirement.
• The accumulation phase ends and the decumlation phase begins when one enters
retirement, typically around age 65, thereafter the individual begins spending down their
retirement savings.
• During the accumulation phase, an investor is primarily concerned with capital
appreciation, whereby in the decumulation phase an investor is primarily concerned with
retirement income and capital preservation.
Break it Down: 3 Essential Investment Strategies
Aggressive Strategy
Objective (1): Seeks to maximize total return through a diversified
asset allocation strategy consistent with an above average level of
risk.
Target Allocation: During the accumulation phase, an aggressive
Dramatized example.
allocation investor would have an initial target equity allocation
of 100% and ending target equity allocation of 55% at the date
of retirement. During the decumulation phase, an aggressive allocation investor would have an initial target equity
allocation of 55% and terminal equity allocation of 15% 20 years into retirement.
Within equities these securities include a variety of investments that may include large cap equities, small cap equities,
and foreign equities. Within fixed income these securities include a variety of investments which may include investment
grade debt, non-investment grade debt and foreign debt.
Other Considerations: Over long periods of time, a well-diversified portfolio of stock mutual fund investments has
historically offered higher returns than more conservative investments which may be less variable. Investors should
expect regular changes in portfolio values, up and down, reflecting general stock market conditions. We also anticipate
there may be periods when the portfolios will sustain losses.
(1) To invest properly in Equities (stocks), Fixed Income (bonds), Real Estate and other non-guaranteed or money market assets, investors should
understand the tradeoff between the rewards (investment return) and risk of various investments. Historically, investors, who have dollar cost
averaged into a properly diversified portfolio over long periods of time, have been rewarded with fair market returns that are often positive.
History also indicates that for some strategies and investments, short-term results can be negative. Investing is not without risk and there can be no
guarantees that past performance will generate future results.
Moderate Strategy
Objective (1): Seeks growth of capital through a diversified asset
allocation strategy consistent with a moderate level of risk.
Target Allocation: During the accumulation phase, a
moderate allocation investor would have an initial target equity
allocation of 90% and ending target equity allocation of 47% at the Dramatized example.
date of retirement. During the decumulation phase, a moderate
allocation investor would have an initial target equity allocation of 47% and terminal equity allocation of 15% 20 years
into retirement.
Within equities these securities include a variety of investments that may include large cap equities, small cap equities,
and foreign equities. Within fixed income these securities include a variety of investments which may include investment
grade debt, non-investment grade debt and foreign debt.
Other Considerations: Over long periods of time, a well-diversified portfolio of stock mutual fund investments has
historically offered higher returns than more conservative investments which may be less variable. Investors should
expect regular changes in portfolio values, up and down, reflecting general stock market conditions. We also anticipate
there may be periods when the portfolios will sustain losses.
(1) To invest properly in Equities (stocks), Fixed Income (bonds), Real Estate and other non-guaranteed or money market assets, investors should
understand the tradeoff between the rewards (investment return) and risk of various investments. Historically, investors, who have dollar cost
averaged into a properly diversified portfolio over long periods of time, have been rewarded with fair market returns that are often positive.
History also indicates that for some strategies and investments, short-term results can be negative. Investing is not without risk and there can be no
guarantees that past performance will generate future results.
Conservative Strategy
Objective (1): Seeks to generate income and preserve capital
through a diversified asset allocation strategy consistent with a
conservative level of risk.
Target Allocation: During the accumulation phase, a conservative
Dramatized example.
allocation investor would have an initial target
equity allocation of 80% and ending target equity allocation of 32%
at the date of retirement. During the decumulation phase, a conservative allocation investor would have an initial target
equity allocation of 32% and terminal equity allocation of 15% 20 years into retirement.
Within equities these securities include a variety of investments that may include large cap equities, small cap equities,
and foreign equities. Within fixed income these securities include a variety of investments which may include investment
grade debt, non-investment grade debt and foreign debt.
Other Considerations: Over long periods of time, a well-diversified portfolio of stock mutual fund investments has
historically offered higher returns than more conservative investments which may be less variable. Investors should
expect regular changes in portfolio values, up and down, reflecting general stock market conditions. We also anticipate
there may be periods when the portfolios will sustain losses.
(1) To invest properly in Equities (stocks), Fixed Income (bonds), Real Estate and other non-guaranteed or money market assets, investors should
understand the tradeoff between the rewards (investment return) and risk of various investments. Historically, investors, who have dollar cost
averaged into a properly diversified portfolio over long periods of time, have been rewarded with fair market returns that are often positive.
History also indicates that for some strategies and investments, short-term results can be negative. Investing is not without risk and there can be no
guarantees that past performance will generate future results.
ProNvest, Inc. is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments or
investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or
purchase of any specific securities, investments or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. No part of this document may be reproduced in any manner, in whole or
in part, without the prior written permission of ProNvest. By accepting this material, you acknowledge, understand and accept the foregoing.