WORDHOUSE WEALTH COACHING

MARKET CRASH HISTORY

We realize many of our clients could not attend our Winter Client Appreciation Party in snowy Grand Rapids, so here is a hard copy of Phyllis’ presentation.

Children are very similar to Asset Allocation Mutual Funds: they are unique in size, temperament, names, ages, likes and dislikes. No two children are exactly the same, even those from the same parents. No two Asset Allocation Mutual Funds are the same and our Modern Portfolio Theory strategy uses 16 unique Asset Allocation funds. Alone the funds are one of a kind and each has its own cycle, but working together in dissimilar accord, they correlate and the result is that your portfolio has less risk and provides market returns.

By looking at past Market Crashes you can see each was unique and so was the rebound of the market after the crash. Yes, and the one we are currently in is also unique…but we can learn from history!

The presentation used a hypothetical 70% Stock / 30% Bond Long Term Growth US Diversified Portfolio mix with 7 different asset classes, as many of the small and international funds do not have a long audited history.

• Dot.Com Crash:
• February 2001-February 2003
• 22 Months
• Total Portfolio Return: -36.42%
• After the Crash:
• 1 Yr. Annualized Return: 44.54%
• 3 Yr. Annualized Return: 20.08%
• 5 Yr. Annualized Return: 12.76%

• 1987 Crash:
• September 1987 – October 1987
• 2 Months
• Total Portfolio Return: -23.25%
• After the Crash:
• 1 Yr. Annualized Return: 18.40%
• 3 Yr. Annualized Return: 6.07%%
• 5 Yr. Annualized Return: 12.55%
• 10 Yr. Annualized Return: 14.24%
• 20 Yr. Annualized Return: 11.80%

• 1973-1974 Crash:
• January 1973-September 1974
• 21 Months
• Total Portfolio Return: -42.62%
• After the Crash:
• 1 Yr. Annualized Return: 35.12%
• 3 Yr. Annualized Return: 26.27%
• 5 Yr. Annualized Return: 23.66%
• 10 Yr. Annualized Return: 20.38%
• 20 Yr. Annualized Return: 16.26%

• 1962 Crash:
• March 1962-October 1962
• 8 Months
• Total Portfolio Return: -17.55%
• After the Crash:
• 1 Yr. Annualized Return: 26.17%
• 3 Yr. Annualized Return: 18.96%
• 5 Yr. Annualized Return: 17.41%
• 10 Yr. Annualized Return: 11.94%
• 20 Yr. Annualized Return: 12.53%

• 1946-1947 Crash:
• June 1946-April 1947
• 11 Months
• Total Portfolio Return: -20.96%
• After the Crash:
• 1 Yr. Annualized Return: 13.30%
• 3 Yr. Annualized Return: 10.65%
• 5 Yr. Annualized Return: 12.59%
• 10 Yr. Annualized Return: 13.17%
• 20 Yr. Annualized Return: 12.42%

• The Great Crash:
• September 1929-June 1932
• 34 Months
• Total Portfolio Return: -83.41%
• After the Crash:
• 1 Yr. Annualized Return: 257.00%
• 3 Yr. Annualized Return: 46.00%
• 5 Yr. Annualized Return: 43.03%
• 10 Yr. Annualized Return: 17.42%
• 20 Yr. Annualized Return: 17.76%

Summary:

• Love your children and celebrate their uniqueness!
• The greatest growth of wealth: 12/1959-8/2008
• $1 invested during the period of 9/1929 - 8/2008 grew to the following values: $4,685.62 Diversified Long Term Growth 70/30Portfolio
• $17.97 One Month US Treasury Bill
• $12.70 US Consumer Price Index
• The BEST time to panic is… NEVER!
• Stay disciplined in the 16 Asset Class Mutual Funds which hold over 14,000 unique stocks and bonds!
• You are invested in the ONLY Nobel Prize winning investment strategy Modern Portfolio Theory (MPT).
• Celebrate that your MPT portfolios are not down near as much as “retail” portfolios!

Phone: 616-301-9049 · Fax: 888-797-8703
Wealth Coaching provided through Wealth Advisors Group, LLC.