Flex Portfolio Performance Through November 2012

With the creation of the new Flex IV portfolios, most clients will be moved out of Flex II and Flex III portfolios.  The Flex portfolios are designed to provide nimble tactical management even while my clients and I aim to keep the strategic allocation in place during various market conditions.

Strategic:  diversified portfolios consistent with Nobel Prize-winning methodology to optimize the balance between risk and reward; best to maintain the portfolio in targeted strategy, so we remain invested fully in the mutual funds comprising the Flex portfolios.

Tactical:  what, if anything, should be done within the portfolios under various market conditions; we leave this up to the managers of each fund in the Flex portfolios.

The Flex portfolios continue to demonstrate excellent risk-management while participating very well in the markets in the near-term; they show significant out-performance in the intermediate- and long-term periods.

Below are the through-November performance numbers for the key Flex portfolios and their index fund-comprised low-cost alternatives:

US and Foreign Indexes	1 mo	3 mo	YTD	1 yr	2 yr	3 yr	5 yr	10 yr
Stock Markets (50-40-10)	1.4%	3.7%	13.9%	13.9%	7.0%	6.8%	-1.7%	7.4%
S&P 500	0.6%	1.3%	15.0%	16.1%	11.9%	11.3%	1.3%	6.4%
MSCI EAFE	2.4%	6.3%	13.6%	12.5%	3.8%	2.9%	-4.8%	7.4%
Barclays Agg Bond--US	0.2%	0.5%	4.4%	5.5%	5.5%	5.7%	6.0%	5.4%
Barclays Agg Bond--Global	0.0%	1.1%	4.7%	5.4%	5.8%	4.0%	5.5%	6.4%
Moderately Aggressive	1.2%	3.1%	11.8%	12.1%	7.1%	6.2%	-0.7%	6.4%
80 Flex IV	0.9%	2.6%	9.9%	8.7%	6.6%	7.9%	6.1%	10.0%
80 Flex III	1.0%	2.0%	9.2%	7.7%	5.3%	6.6%
80 Fidelity	1.3%	3.2%	11.9%	11.5%	6.7%	6.4%	-0.7%	6.4%
Moderate	1.0%	2.5%	9.6%	10.0%	6.5%	5.6%	0.6%	6.1%
60 Flex IV	1.0%	3.1%	11.3%	10.2%	6.9%	8.2%	6.6%	10.1%
60 Flex III	1.0%	2.3%	9.7%	8.8%	5.5%	6.7%
60 Fidelity	1.0%	2.4%	9.5%	9.5%	5.8%	5.7%	0.3%	5.8%
Moderately Conservative	0.8%	1.8%	7.4%	8.0%	6.1%	5.1%	2.0%	5.9%
40 Flex IV	1.0%	3.3%	12.0%	11.6%	7.3%	8.6%	7.4%	9.7%
40 Fidelity	0.7%	1.7%	7.5%	7.8%	5.4%	5.3%	1.8%	5.3%
Asset Allocation	Cash	Stock	Bond	Other
80 Flex IV	25%	44%	21%	10%
60 Flex IV	22%	39%	30%	9%
40 Flex IV	24%	26%	43%	7%