A SCIENTIFIC APPROACH TO INVESTING

MUST YOU INVEST?

Having a nest egg gives you options (and yes, the larger your bank account, the more options). Want to switch careers, work part-time, or live in Costa Rica? Or just be sure you can maintain your current lifestyle for the rest of your life? Saving and investing today, gives you options for tomorrow.

Is Social Security Enough?

Social Security should provide some income, and perhaps you have a pension that will also help out. However, because Social Security is only enough revenue to subsist in life, your portfolio is where you will get the extra funds that add abundance.

Investing Version 1.0 and 2.0

For years, investing was thought of as picking winning stocks, and doing it at the right time. This idea of how to invest has dominated our philosophy of what we “should” do.

Investing 2.5: the four factors

Starting in the 1970s, ways to increase the returns in your portfolio started to come out in academic research.

So you would be wise to use these Investing 2.5 principles when building up your portfolio. Look at the same ratio of stocks to bonds (60% stocks and 40% bonds) that we looked at in Version 2.0 Investing.

Implementing 2.5 Tilt Toward Better Performing Assets

So you would be wise to use these Investing 2.5 principles when building up your portfolio. Look at the same ratio of stocks to bonds (60% stocks and 40% bonds) that we looked at in Version 2.0 Investing.

DISCLOSURES

The information presented reflects the views and opinions of Harvard Avenue, LLC, and is provided for general education purposes. It should not be construed as an offer to buy or sell investment products or securities. The information and data provided are for illustrative purposes only. The hypothetical portfolios shown are not meant to be actual portfolio recommendations.

The performance figures in this presentation often use hypothetical results. While we believe that this information provides value, hypothetical data can be misleading because it does not represent actual performance and should not be interpreted as an indication of actual performance.

Portfolios shown Reflect Annual Rebalancing

US Stock Allocations:

1970-1980: 70% US Market Equity, 30% US Small Cap Value

1981-2016: 60% US Market Equity, 30% US Small Cap Value, 10% REIT

International Stock Allocations:

1970-1980: 50% International Market Equity, 50% International Small Cap

1981-1993: 60% International Market Equity, 30% International Small Cap, 10% REIT

1994-2016: 40% International Market Equity, 30% International Small Cap, 20% Emerging Markets Value, 10% REIT

Bond Allocations:

1970-1996: 30% Short-Term Treasury, 70% Intermediate Term Treasury

1997-2016: 30% Short-Term Treasury, 50% Intermediate Term Treasury, 20% TIPS

Stocks:

Emerging Markets: Dimensional Emerging Markets Value Index from 1994

International Market Equity: MSCI World ex-US Adjusted Market Index from 1994

International Small Cap: Dimensional International Small Cap Index from 1970-1980

International Small Cap Value: Dimensional International Small Cap Value Index from 1981

US Market Equity: Dimensional US Adjusted 2 Index from 1970

US Small Cap Value: Dimensional US Small Cap Value Index from 1970

Real Estate Investment Trusts: Dow Jones Select REIT Index 1981-1993; S&P Global REIT Index from 1994

Bonds:

BofA Merrill Lynch 1-Year US Treasury Note Index from 1970-1980

Barclays Treasury Bond Index 1-5 Years from 1981

Five-Year Us Treasury Notes from 1970-1980

Barclays US Treasury Bond Index Intermediate from 1981

Barclays US TIPS Index from 1997