AAII Asset Allocation Models

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Our asset allocation area is an unbiased educational resource for anyone interested in asset allocation and portfolio building.

In this area, you'll see the performance of many popular investment benchmarks; plus you'll benefit from being able to review AAII's asset allocation models. The models are designed to help you match your risk level with appropriate asset classes.

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Popular Investment Benchmarks   (Data as of 2/28/2013)
Stocks Standard Deviation 1 yr 5 yrs 10 yrs
Large-Cap Stocks 15.20% 13.30% 4.85% 8.12%
Mid-Cap Stocks 18.13% 13.93% 8.14% 11.52%
Small-Cap Stocks 19.97% 15.27% 8.53% 12.32%
International Stocks 20.12% 10.06% -1.16% 9.07%
Emerging Markets Stocks 21.94% -0.01% 0.21% 16.5%
Fixed Income
Intermediate Bonds 3.78% 2.49% 5.22% 5.04%
Short-Term Bonds 1.00% 0.66% 2.10% 2.98%
Overall market
Vanguard Total Stock Market Index (VTSMX) 15.90% 13.38% 5.50% 9.01%

AAII Asset Allocation Models

What is your investor profile? Follow one of our recommended allocations and check back frequently for monthly return data.

Investor Profile Standard Deviation 1 yr 5 yrs 10 yrs
Aggressive Investor
  • Age 18-35
  • 30+ Years Investment Horizon
 14.8% 10.8% 4.6% 10.4%
Moderate Investor
  • Age 35-55
  • 20+ Years Investment Horizon
 10.8% 9.2% 4.9% 8.9%
Conservative Investor
  • Age 55+
  • 10+ Years Investment Horizon
 7.0% 7.8% 5.1% 7.2%
 Suggested Allocation Breakdowns
Aggressive


   20% Large-Cap Stocks
   20% Mid-Cap Stocks
   20% Small-Cap Stocks
   20% International Stocks
   10% Emerging Markets Stocks
   10% Intermediate Bonds
   0% Short-Term Bonds
Moderate


   20% Large-Cap Stocks
   20% Mid-Cap Stocks
   10% Small-Cap Stocks
   15% International Stocks
   5% Emerging Markets Stocks
   30% Intermediate Bonds
   0% Short-Term Bonds
Conservative


   25% Large-Cap Stocks
   10% Mid-Cap Stocks
   10% Small-Cap Stocks
   5% International Stocks
   0% Emerging Markets Stocks
   40% Intermediate Bonds
   10% Short-Term Bonds
Aggressive Portfolio Return
YTD: 5.0%
1 yr: 10.8%
5 yrs: 4.6%
10 yrs: 10.4%
Moderate Portfolio Return
YTD: 4.1%
1 yr: 9.2%
5 yrs: 4.9%
10 yrs: 8.9%
Conservative Portfolio Return
YTD: 3.4%
1 yr: 7.8%
5 yrs: 5.1%
10 yrs: 7.1%

Broad Allocation Scenarios
Aggressive Investor

Allocations

Aggressive Portfolio Return
1 yr: -3.3%
5 yrs: 0.4%
10 yrs: 7.2%

Characteristics
Growth: Substantial
Income: Very Low
Risk: Substantial Year-to-Year Volatility of Portfolio Value
10% Average Annual Growth in Value
-30% Bad Year

Time Horizon
Age: often 18-35
30+Years: Long Investment Horizon
For investors who are very risk tolerant
Transition: 80% Diversified Stock
20% Fixed Income		 Investors, as they age, usually transition their portfolios toward less risky and less aggressive asset allocations.

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Moderate Investor

Allocations

Moderate Portfolio Return
1 yr: 0.1%
5 yrs: 2.1%
10 yrs: 6.6%

Characteristics
Growth: Moderate
Income: Low
Risk: Moderate Year-to-Year Volatility of Portfolio Value
8% Average Annual Growth in Value
-20% Bad Year

Time Horizon
Age: often 35-55
20+Years: Mid-Term Investment Horizon
 
For investors who can tolerate some risk
Transition: 60% Diversified Stock
40% Fixed Income		 Investors, as they get closer to retirement, usually transition their portfolios toward lower risk and more conservative allocations.

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Conservative Investor

Allocations
Conservative Portfolio Return
1 yr: 3.8%
5 yrs: 3.7%
10 yrs: 5.9%

Characteristics
Growth: Low
Income: Moderate
Risk: Low Year-to-Year Volatility of Portfolio Value
6% Average Annual Growth in Value
-15% Bad Year

Time Horizon
Age: often 55+
10+Years: Short-Term Investment Horizon
 
For investors who are not risk tolerant

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