Welcome to Disciplined Financial Services, Inc.

CONNECT

Address:

19575 Janacek Ct., Suite 105
Brookfield, WI 53045

Phone:

262-784-6650

A Scary Predicament To Be In

Gene is privileged to serve on a number of endowment committees and pension plan boards.  Typically meeting on a quarterly schedule, it's not unusual for a significant portion of each meeting being devoted to one very important topic:

"How are we going to attain our assumed rate of return over the next 3-5 years?"

Nowadays, the assumed portfolio average rate of return is probably around 7.5% per year, on average.

You see, many of these investment pools are assuming - rightly or wrongly - that over a period of time, their portfolio will be able to achieve a certain average rate of return.  The implicit assumption is that, if you hold a mix of different asset classes over a long enough period of time, "everything will work out just fine."

But will they?

And, what about those inevitable bear markets?  The 2007-2009 bear market resulted in a 50%+ drawdown!  It takes many, many years to "get back to even" - and who wants to go through that experience again?

Quality bonds yielding less than 2% certainly aren't the answer, either.

Here's the reality of the problem for the "buy and hold" crowd: It's looking more and more probable that a huge gap is developing between what stocks and bonds are likely to offer in total performance versus the targeted (assumed) return of the investment portfolio.

It's a big problem that seems to be growing every year.

And, "Modern Portfolio Theory" is not going to provide the solution.

Our suggestion: Seriously consider devoting a portion (or all) of the investment portfolio to incorporate a strategy that identifies, through relative strength analysis, those asset classes that should be owned - while bypassing those asset classes that are exhibiting poor relative strength.

 

      Learn more by contacting us at 262-784-6650 or email

   GeneSzaj@DisciplinedFinancial.com