45-Year Asset Allocation Risk & Return Spectrum: 1970-2014

Craig L. Israelsen, Ph.D.

45-Year Period from 1970-2014
www.7TwelvePortfolio.com

Risk Level

Various Asset Allocation Models

45-Year
Annualized
Return (%)

45-Year
Standard
Deviation of
Return (%)

Average Rolling
10-Year Return
(21 10-Year
Rolling Returns)

Median Ending
Account
Balance in
Retirement
Portfolios*

Very
Conservative

100% Cash

5.11

3.45

5.64

332,615

Conservative

50% Cash
50% Bonds

6.54

4.15

6.99

570,137

9.82

11.28

10.35

1,531,523

10.12

10.18

10.88

2,141,408

10.48

17.43

11.21

1,930,166

Moderately
Aggressive

60% US Stock
40% Bonds
Traditional
Balanced Fund
14.3% in
7 different
asset classes

Moderately
Aggressive

7-Asset
Diversified
Portfolio**
70% Growth/
30% Fixed Income

Very
Aggressive

100% US Stock

* Median ending account balance over 21 rolling 25-year periods. Assuming a starting balance of $250,000, 5% initial withdraw rate,
3% cost of living increase in the annual cash withdrawal. Total withdrawal in each 25-year rolling period equaled $455,741.
Past performance does not guarantee future performance.
The multi-asset portfolios were rebalanced at the start of each year.
** 7-asset portfolio consisted of large cap US stock, small cap US stock, non-US stock, real estate, commodities, US bonds, and cash.
Raw data source: Lipper for Investment Management, calculations by Craig L. Israelsen
www.7TwelvePortfolio.com

Retirement Portfolio Survival Analysis: Rolling 25-Year Periods from 1970-2014

$250,000 starting balance in each 25-Year Period
5% initial withdrawal
3% COLA (annual cost of living adjustment)

Retirement Portfolio
Asset Allocation
Models

1-Asset
Portfolio

2-Asset
Portfolio

2-Asset
Portfolio

7-Asset
Portfolio

Very
Conservative

Conservative

Moderately
Aggressive

Moderately
Aggressive

Cash
and
Bonds

US Stock
and
Bonds

Diversified
7-Asset Portfolio*
with Equal
Allocations

(50% in each)

(60% US Stock,
40% Bonds)

(14.3% each)

100%
Cash

Rolling 25-Year Periods

Starting Account Balance $250,000
5% initial withdrawal rate
3% annual cost of living adjustment
(Total withdrawal of $455,741
in each 25-Year Period)

Starting Year

Ending Year

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990

1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Median Ending Account Balance

Ending Account Balance After 25 Years

352,506
354,760
385,161
420,364
412,091
391,702
403,764
417,185
418,138
391,241
332,615
268,075
185,189
135,994
100,987
58,984
33,639
18,772
5,862
0
0

570,137
528,367
534,670
591,509
624,581
611,308
639,285
592,903
648,622
680,299
682,391
665,145
611,481
426,043
393,972
318,555
225,552
177,031
184,213
157,827
106,631

1,090,081
1,310,620
1,292,730
1,312,351
2,282,803
3,910,386
2,815,315
2,073,038
2,241,727
2,718,993
2,661,022
2,186,857
2,690,393
2,110,557
1,397,418
1,531,523
1,183,572
986,296
1,121,074
1,149,944
872,236

2,086,863
2,714,930
2,694,728
2,450,756
2,681,771
3,766,599
3,360,585
2,554,941
2,302,402
2,442,985
2,141,408
1,791,971
2,179,529
1,903,798
1,065,672
1,211,611
986,639
735,415
784,609
657,047
489,074

332,615

570,137

1,531,523

2,141,408

Past performance does not guarantee future performance

The multi-asset portfolios were rebalanced at the start of each year.
* 7-asset portfolio consisted of large cap US stock, small cap US stock, non-US stock, real estate, commodities, US bonds, and cash.
Raw data source: Lipper for Investment Management, calculations by Craig L. Israelsen
www.7TwelvePortfolio.com