Strategic and Flex Model Performance Through May 2015

US and Foreign Indexes		3 mo	1 yr	3 yr	5 yr	10 yr	2008
Stock Markets (50-40-10)		1.4%	5.4%	16.5%	12.6%	7.2%	-39.7%
S&P 500		0.6%	11.7%	19.5%	16.4%	8.0%	-37.0%
MSCI EAFE		2.0%	-0.6%	15.5%	9.8%	5.5%	-43.4%
US OE Diversified Emg Mkts		1.3%	-2.1%	5.9%	3.9%	7.8%	-54.4%
Barclays Agg Bond--US		-0.1%	3.0%	2.2%	3.8%	4.5%	5.2%
Barclays Agg Bond--Global		-1.7%	-6.0%	-0.5%	2.5%	3.5%	4.8%
Ibbotson Aggressive		0.9%	7.0%	16.7%	13.4%	7.2%	-35.5%
Aggressive		1.2%	5.0%	15.9%	12.2%	6.7%	-36.3%
95 Flex V		-0.4%	3.0%	12.1%	10.0%	9.0%	-19.1%
95 Strategic II		0.2%	5.5%	17.2%	14.2%	9.6%	-35.9%
95 Schwab index		1.5%	6.9%	17.6%	13.6%	7.6%	-37.2%
WealthFront 9		0.9%	4.0%	13.3%	10.7%	7.5%	-38.0%
Ibbotson Moderately Aggressive		0.7%	6.0%	13.8%	11.8%	6.8%	-28.5%
Moderately Aggressive		0.9%	4.2%	14.1%	11.3%	6.6%	-32.0%
80 Flex V		-0.2%	2.9%	11.5%	9.7%	8.9%	-16.9%
80 Strategic II		0.1%	4.2%	14.5%	12.2%	8.8%	-30.0%
80 Schwab index		1.2%	6.2%	14.8%	11.9%	7.0%	-32.1%
Ibbotson Moderate		0.5%	5.1%	11.0%	9.9%	6.3%	-21.2%
Moderate		0.4%	2.8%	10.5%	9.3%	6.1%	-23.1%
60 Flex V		0.2%	2.7%	10.6%	9.2%	8.9%	-13.1%
60 Strategic II		0.0%	3.5%	11.7%	10.5%	8.2%	-23.9%
60 Schwab index		0.8%	5.7%	11.6%	10.0%	6.2%	-25.6%
Goldman Sachs Income Builder		0.8%	2.9%	11.0%	10.5%	6.6%	-23.3%
American Funds Balanced Port		0.5%	6.0%	12.8%	11.3%	7.1%	-28.2%
Moderately Conservative		0.0%	1.3%	7.1%	7.2%	5.4%	-13.3%
40 Flex V		0.3%	2.6%	10.0%	9.0%	8.9%	-13.3%
40 Strategic II		0.0%	3.8%	10.8%	9.5%	7.7%	-17.7%
40 Schwab Index		0.5%	4.8%	8.3%	7.9%	5.3%	-18.8%
Conservative		-0.4%	-0.1%	3.6%	5.1%	4.7%	-2.5%
20 Flex V		0.8%	2.4%	8.8%	8.3%	8.6%	-5.2%
20 Strategic II		-0.2%	2.9%	8.1%	7.4%	6.7%	-10.5%
20 Schwab index		0.2%	3.7%	5.1%	5.7%	4.2%	-11.7%
NOTE 1:  Past performance is no guarantee of specific future results.  This data is presented by Potomac Wealth Strategies, LLC.  This data is from Morningstar and should be accurate, but it has not been independently verified.
NOTE 2:  "Flex", "Strategic", and "Index" models are crafted/run by Potomac Wealth Strategies.  They show history of better returns, lower volatility, or both--or, with the Index models, closer tracking--vs benchmarks and competitors.
NOTE 3:  "XX Schwab index" models are low-cost portfolios.  They are comprised of index funds available free of transaction charges to my clients at Schwab.  This is what many might recommend due to low-costs and portfolio efficiency.
NOTE 4:  Nothing on this blog post represents investment advice to any individual or organization.  If the information hereon is of interest to you, please contact me at Garo.Partoyan@PotomacWealthStrategies.com for a consultation.

Strategic and Flex Portfolio Performance Through July 2014

US and Foreign Indexes		3 mo	1 yr	3 yr	5 yr	10 yr	2008
Stock Markets (50-40-10)		1.8%	16.1%	12.4%	13.1%	7.6%	-40.2%
S&P 500		3.0%	16.9%	16.8%	16.8%	8.0%	-37.0%
MSCI EAFE		0.6%	15.1%	8.0%	9.4%	7.1%	-43.4%
US OE Diversified Emg Mrkts		6.5%	13.0%	0.3%	7.0%	11.3%	-54.4%
Barclays Agg Bond--US		0.9%	4.0%	3.0%	4.5%	4.8%	5.2%
Barclays Agg Bond--Global		0.4%	5.1%	1.6%	4.0%	5.0%	4.8%
Aggressive		1.7%	14.6%	11.4%	12.1%	7.4%	-36.3%
90 Flex V		0.8%	9.9%	8.5%	11.3%		-19.1%
90 Strategic II		0.8%	11.2%	12.6%	15.5%	10.0%	-34.0%
Fidelity 90		1.6%	14.2%	12.2%	13.2%	7.8%	-35.2%
Moderately Aggressive		1.6%	13.5%	10.4%	11.4%	7.3%	-32.0%
80 Flex V		1.0%	9.6%	8.1%	11.0%		-16.9%
80 Strategic II		0.9%	10.5%	11.8%	14.4%	9.6%	-30.2%
Fidelity 80		1.2%	12.7%	10.3%	11.3%	7.3%	-32.0%
Moderate		1.3%	11.0%	8.4%	9.6%	6.8%	-23.1%
60 Flex V		1.3%	9.1%	8.0%	10.9%		-13.1%
60 Strategic II		1.1%	9.3%	10.1%	12.6%	8.9%	-24.2%
Vanguard 60		1.9%	9.3%	9.1%	10.3%	6.6%	-23.8%
Moderately Conservative		1.0%	8.5%	6.3%	7.7%	6.2%	-13.3%
40 Flex V		1.6%	8.7%	8.1%	10.9%		-13.1%
40 Strategic II		1.0%	7.3%	7.7%	9.9%	7.5%	-16.8%
Vanguard 40		1.5%	6.8%	6.6%	8.0%	5.9%	-15.1%
Conservative		0.8%	6.0%	4.2%	5.7%	5.5%	-2.5%
20 Flex V		1.9%	8.2%	7.6%	10.4%		-5.2%
20 Strategic II		0.9%	5.4%	5.4%	7.4%	6.3%	-9.1%
Vanguard 20		1.3%	5.2%	4.9%	6.6%	5.6%	-0.7%
Asset Allocation		USA	x-USA	Bond	Cash	Other
20 Flex V		14%	5%	48%	29%	4%
40 Flex V		28%	10%	31%	26%	5%
60 Flex V		34%	15%	21%	24%	6%
80 Flex V		44%	20%	8%	21%	7%
90 Flex V		51%	22%	1%	18%	7%
20 Strategic II		11%	6%	52%	27%	3%
40 Strategic II		22%	12%	40%	22%	3%
60 Strategic II		35%	18%	27%	17%	3%
80 Strategic II		45%	25%	14%	14%	3%
90 Strategic II		50%	29%	8%	11%	3%
NOTE 1:  Past performance is no guarantee of specific future results.  This data is presented by Potomac Wealth Strategies, LLC.  This data is from Morningstar and should be accurate, but it has not been independently verified.
NOTE 2:  "Flex" and "Strategic" portfolios are designed and managed by Potomac Wealth Strategies, LLC.  These models show track records of better returns, lower volatility, or both, compared to their benchmarks and popular competitors.
NOTE 3:  "Vanguard 80" and "Fidelity 80" are low-cost Moderately Aggressive portfolios.  They are comprised of index funds from Vanguard or Fidelity.  This is what many might recommend due to low-costs and portfolio efficiency.
NOTE 4:  Nothing on this blog post represents investment advice to any individual or organization.  If the information hereon is of interest to you, please contact us at Garo.Partoyan@PotomacWealthStrategies.com for a consultation.

Flex and Strategic Portfolio Performance Through April 2014

US and Foreign Indexes		3 mo	1 yr	3 yr	5 yr	10 yr	2008
Stock Markets (50-40-10)		6.9%	15.2%	8.7%	16.0%	7.8%	-40.7%
S&P 500		6.2%	20.4%	13.8%	19.1%	7.7%	-37.0%
MSCI EAFE		6.4%	13.2%	5.6%	13.4%	6.8%	-43.1%
iShares MSCI Emerging Markets		6.6%	-2.4%	-4.4%	9.5%	10.6%	-50.0%
Barclays Agg Bond--US		1.2%	0.0%	3.6%	4.9%	4.8%	5.2%
Barclays Agg Bond--Global		2.5%	1.6%	2.1%	5.2%	5.0%	4.8%
Moderately Aggressive		5.4%	13.4%	8.5%	14.1%	7.1%	-32.0%
80 Flex III		3.1%	7.8%	5.7%	12.2%		-18.3%
80 Flex IV		3.3%	8.1%	6.5%	13.0%	9.9%	-17.5%
80 Strategic		4.6%	13.2%	11.4%	19.5%	10.0%	-33.8%
Fidelity 80		5.1%	13.5%	8.3%	14.2%	7.2%	-32.0%
Russell Growth		4.6%	10.6%	5.5%	13.4%	6.1%	-36.1%
Moderate		4.4%	10.0%	7.1%	11.7%	6.7%	-23.1%
60 Flex III		2.9%	5.6%	5.4%	11.3%		-12.6%
60 Flex IV		2.8%	6.5%	6.0%	12.1%	9.9%	-13.0%
60 Strategic		4.1%	9.6%	9.7%	16.6%	9.3%	-25.7%
Vanguard 60		3.2%	7.4%	8.5%	11.6%	6.5%	-23.8%
Russell Balanced		3.9%	8.0%	5.2%	12.2%	6.0%	-30.0%
Moderately Conservative		3.4%	6.6%	5.7%	9.2%	6.1%	-13.3%
40 Flex IV		2.5%	4.4%	5.9%	11.2%	9.3%	-8.0%
40 Strategic		3.8%	6.5%	8.6%	14.9%	9.0%	-19.8%
Vanguard 40		2.2%	3.6%	6.6%	9.0%	5.9%	-15.1%
Russell Moderate		3.1%	4.5%	4.4%	10.6%	5.3%	-23.5%
Conservative		2.5%	3.3%	4.2%	6.7%	5.5%	-2.5%
20 Flex IV		2.3%	2.3%	5.6%	10.1%	8.5%	-2.9%
Vanguard 20		1.5%	0.6%	5.4%	7.4%	5.5%	-5.6%
Russell Conservative		2.2%	2.0%	3.7%	8.5%	4.5%	-15.5%
Asset Allocation		USA	x-USA	Bond	Cash	Other
80 Flex IV		32%	20%	17%	23%	8%
60 Flex IV		23%	19%	26%	24%	8%
40 Flex IV		15%	12%	39%	28%	5%
20 Flex IV		7%	6%	51%	33%	3%
NOTE 1:  Past performance is no guarantee of specific future results.  This data is presented by Potomac Wealth Strategies, LLC.  This data is from Morningstar and should be accurate, but it has not been independently verified.
NOTE 2:  "Flex" and "Strategic" portfolios are designed and managed by Potomac Wealth Strategies, LLC.  These models show track records of better returns, lower volatility, or both, compared to their benchmarks and popular competitors.
NOTE 3:  "Vanguard 80" and "Fidelity 80" are low-cost Moderately Aggressive portfolios.  They are comprised of index funds from Vanguard or Fidelity.  This is what many might recommend due to low-costs and portfolio efficiency.
NOTE 4:  Russell portfolios are offered by one of the most highly-regarded institutional money managers in the country.  These portfolios handle money for dozens of high net-worth people and famous organizations.
NOTE 5:  Nothing on this blog post represents investment advice to any individual or organization.  If the information hereon is of interest to you, please contact us at Garo.Partoyan@PotomacWealthStrategies.com for a consultation.

Getting a Mortgage Without Having Income Is Difficult--FYI to retirees

Here is an example of how the banks are probably acting prudently, even though it is easy to see how some would think, "Wow, the guy has a million bucks and the bank won't lend to him??"

http://www.cnbc.com/id/100719396

Income is more important than assets when it comes to evaluating mortgage creditworthiness.  $1mm in the bank gets you about $30k/year right now in a conservative (but not "no risk") portfolio.  If the bank needed this guy to have an income of $100k and he was getting $60 from investments and Soc Sec, then they were smart to deny him the loan or offer him a smaller amount to borrow.

And the loan officer would be in need of a talking-to for misleading the applicant in the first place--one of the major things that got us into trouble last decade.

Flex Portfolio Performance Through January 2013

Global stock markets have been rising strongly.  This is despite global-macro economic and geopolitical concerns--very slow growth in USA, continued economic troubles in Europe, China slowing, Japan still in a rut, flare-ups exacerbating problems and potential for more in the middle east.  I sense that the U.S. Federal Reserve's pretty much open-ended commitment to buying Treasury debt (funding deficit spending in effort to keep the economy afloat while it tries to learn how to swim again) is creating an artificial wave that stock investors are willing to surf.  For now.

This is why I favor a global/flexible portfolio management approach.  My "Flex" portfolios are the best way I know to implement such.

Yes, diversified portfolios have struggled to keep pace with the stock markets, but that is understandable because such are invested at most around 80% in stocks, and perhaps as little as 20%.

What is more important to compare is portfolio performance against the correct blended benchmark.  A moderate-risk investor should be about 60-40 stocks-bonds, for example, and thus would compare to a benchmark of 60% stock indexes and 40% bond indexes--not merely the Dow Jones Industrial Average or the S&P 500 index.

This is where the Flex portfolios are doing their jobs well.  They are outperforming their benchmarks, as you can see in the data below, and doing so with much less volatility (a measure of risk).

While I do not ignore short-term performance comparisons, I believe it is most relevant and prudent to consider 3-, 5-, and 10-year time periods when comparing portfolios to each other and/or to their benchmarks.

US and Foreign Indexes	1 mo	3 mo	YTD	1 yr	2 yr	3 yr	5 yr	10 yr
Stock Markets (50-40-10)	4.8%	8.6%	4.8%	15.7%	6.0%	10.2%	1.6%	9.1%
S&P 500	5.2%	6.8%	5.2%	16.8%	10.3%	14.1%	4.0%	7.9%
MSCI EAFE	5.3%	11.3%	5.3%	17.3%	3.0%	6.9%	-0.8%	9.2%
Barclays Agg Bond--US	-0.7%	-0.7%	-0.7%	2.6%	5.6%	5.4%	5.5%	5.1%
Barclays Agg Bond--Global	-0.9%	-1.3%	-0.9%	1.7%	4.4%	4.7%	4.7%	5.8%
Moderately Aggressive	4.0%	5.6%	4.0%	13.4%	6.0%	9.0%	1.8%	7.6%
80 Flex IV	2.6%	4.9%	2.6%	9.3%	6.9%	9.5%	7.0%	10.1%
80 Flex III	2.8%	5.4%	2.8%	10.3%	6.6%	9.2%
80 Fidelity	3.8%	7.2%	3.8%	13.6%	5.8%	9.2%	1.9%	7.7%
Moderate	2.7%	4.8%	2.7%	10.1%	5.5%	7.8%	2.3%	6.9%
60 Flex IV	2.5%	5.0%	2.5%	10.7%	7.4%	9.6%	7.3%	10.2%
60 Flex III	2.2%	4.6%	2.2%	10.7%	7.1%	9.4%
60 Vanguard	2.5%	4.9%	2.5%	11.0%	6.4%	8.7%	2.8%	7.0%
Moderately Conservative	1.5%	2.8%	1.5%	6.9%	5.2%	6.7%	2.9%	6.2%
40 Flex IV	1.8%	4.2%	1.8%	11.0%	7.7%	9.6%	7.7%	9.7%
40 Vanguard	1.4%	3.0%	1.4%	8.3%	6.3%	7.7%	3.6%	6.3%
Asset Allocation	Cash	Stock	Bond	Other
80 Flex IV	24%	45%	21%	10%
60 Flex IV	21%	40%	30%	9%
40 Flex IV	23%	26%	43%	8%

Flex Portfolio Performance Through December 2012

2012 was a strong year for the Flex portfolios!  Double-digit returns, on the heels of or surpassing the benchmarks, and lower volatility than standard portfolios.

In 2012, surging bond prices helped the Moderate to Conservative Flex portfolios outperform their benchmarks significantly in the 4th quarter and for the entire year.

The 10-, 5-, 3-, and 2-year performance has been benchmark-beating for ALL of the Flex portfolios.

Thank you for your business, time, and interest.  Happy New Year!

US and Foreign Indexes	1 mo	3 mo	YTD	1 yr	2 yr	3 yr	5 yr	10 yr
Stock Markets (50-40-10)	2.0%	2.9%	16.4%	16.4%	4.5%	6.9%	-1.0%	8.2%
S&P 500	0.9%	0.4%	16.0%	16.0%	8.8%	10.9%	1.7%	7.1%
MSCI EAFE	3.2%	6.6%	17.3%	17.3%	1.5%	3.6%	-3.7%	8.2%
Barclays Agg Bond--US	-0.1%	0.2%	4.2%	4.2%	6.0%	6.2%	6.0%	5.2%
Barclays Agg Bond--Global	-0.3%	-0.5%	4.3%	4.3%	5.0%	5.2%	5.4%	6.0%
Moderately Aggressive	1.6%	2.4%	13.6%	13.6%	4.9%	6.5%	-0.2%	6.9%
80 Flex IV	1.4%	1.7%	11.4%	11.4%	5.6%	8.2%	6.3%	9.9%
80 Flex III	1.6%	2.0%	11.9%	11.9%	5.0%	7.7%
80 Fidelity	2.0%	3.0%	14.2%	14.2%	4.8%	6.6%	0.0%	7.0%
Moderate	1.1%	1.7%	10.7%	10.7%	4.9%	6.1%	1.0%	6.4%
60 Flex IV	1.4%	2.1%	12.8%	12.8%	6.2%	8.6%	6.7%	10.0%
60 Flex III	1.5%	2.1%	12.6%	12.6%	5.9%	8.3%	6.1%	9.1%
60 Fidelity	1.5%	2.3%	11.1%	11.1%	4.5%	5.9%	0.8%	6.1%
Moderately Conservative	0.6%	1.0%	8.1%	8.1%	5.0%	5.8%	2.3%	5.9%
40 Flex IV	1.3%	2.3%	13.4%	13.4%	6.9%	8.9%	7.5%	9.6%
40 Fidelity	0.9%	1.5%	8.5%	8.5%	4.7%	5.6%	2.1%	5.5%
Asset Allocation	Cash	Stock	Bond	Other
80 Flex IV	25%	45%	21%	9%
60 Flex IV	22%	39%	30%	9%
40 Flex IV	24%	26%	43%	7%