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.

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Popular Investment Benchmarks   (Data as of 8/31/2010)
Stocks Standard Deviation 1 yr 5 yrs 10 yrs
Large-Cap Stocks 20.94% 4.79% -0.99% -1.91%
Mid-Cap Stocks 24.86% 11.34% 1.35% 3.75%
Small-Cap Stocks 27.47% 9.24% 0.47% 3.46%
International Stocks 26.28% -2.46% 0.78% 0.33%
Emerging Markets Stocks 33.72% 17.63% 11.55% 11.25%
Fixed Income
Intermediate Bonds 7.26% 9.97% 6.72% 7.01%
Short-Term Bonds 2.24% 3.26% 4.60% 4.75%
Overall market
Vanguard Total Stock Market Index (VTSMX) 23.44% 5.7% -0.5% -1.1%

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
 22.48% 7.3% 2.2% 3.0%
Moderate Investor
  • Age 35-55
  • 20+ Years Investment Horizon
 17.1% 7.7% 2.8% 3.4%
Conservative Investor
  • Age 55+
  • 10+ Years Investment Horizon
 11.8% 7.5% 3.1% 3.5%
 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: -2.0%
1 yr: 7.3%
5 yrs: 2.2%
10 yrs: 3.0%
Moderate Portfolio Return
YTD: 0.6%
1 yr: 7.7%
5 yrs: 2.8%
10 yrs: 3.4%
Conservative Portfolio Return
YTD: 2.6%
1 yr: 7.5%
5 yrs: 3.1%
10 yrs: 3.5%

Broad Allocation Scenarios
Aggressive Investor

Allocations

Aggressive Portfolio Return
1 yr: 15.6%
5 yrs: 3.0%
10 yrs: 3.9%

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: 13.8%
5 yrs: 3.5%
10 yrs: 4.2%

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: 12.0%
5 yrs: 3.5%
10 yrs: 4.1%

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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