Asset allocation questionnaire

Investment returns for the asset allocations are based on the following benchmark indexes: 

Asset Class Benchmark Index 
Short-term reserves FTSE 3-Month U.S. Treasury Bill Index*
Bonds Barclays U.S. Capital Aggregate Bond Index**
Stocks MSCI U.S. Broad Market Index***

* For U.S. short-term reserves, we use the Ibbotson U.S. 30-Day Treasury Bill Index from 1926 to 1977, and the FTSE 3-Month Treasury Bill Index thereafter.

** For U.S. bond market returns, we use the Standard & Poor’s High Grade Corporate Index from 1926 to 1968; the Citigroup High Grade Index from 1969 to 1972; the Lehman U.S. Long Credit Aa Index from 1973 to 1975; and the Barclays Capital U.S. Aggregate Bond Index thereafter.

*** For U.S. stock market returns, we use the Standard & Poor’s 90 Index from 1926 to March 3, 1957; the Standard & Poor’s 500 Index from March 4, 1957 to 1974; the Wilshire 5000 Index from 1975 to April 22, 2005; and the MSCI US Broad Market Index thereafter.

Keep in mind that the suggested allocation and funds are based on limited information. Conduct additional research or consult a professional advisor for more detailed recommendations.

Annual returns and inflation for a given asset allocation are based on historic data from 1926 through the last calendar year. Past performance is not a guarantee or a prediction of future results.


Caveats on the questionnaire's ability to provide financial forecasts

As you use the questionnaire, keep certain limitations in mind:

  • The suggested asset allocations within the questionnaire depend on subjective factors such as your risk tolerance and financial situation. For this reason, you should view them only as broad guidelines on how you might consider investing your savings. It is important to review historic returns of short-term reserves, bonds, and stocks carefully over various holding periods to see if you can accept the level of risk in a given investment mix.
  • The asset allocations are limited to three broad classes of investments: short-term reserves (such as money market accounts and certificates of deposit), bonds, and stocks. They do not include other assets, such as real estate, personal property, or precious metals.
  • The investment returns represented in the questionnaire are based on historic earnings from 1926 through the last calendar year and are not intended to indicate future performance.
  • Any modifications to your current mix of investments should be made gradually to lessen the impact of significant market changes and potential tax effects.
  • The questionnaire is intended to provide guidelines to help you design a savings and investment program. It does not provide comprehensive investment advice, such as advice on buying a specific stock or bond, and should not be considered the sole or primary basis on which you make investment decisions. You may wish to consult a professional investment advisor, accountant, attorney, or broker before making an investment.
  • Your financial projections greatly depend on your assumptions, especially for inflation rate and investment return. It is difficult to forecast such rates and returns accurately, especially over long periods. Therefore, it is critical that you update your projections periodically to accommodate any changes in your assumptions.
  • The longer your time horizon, the more likely any change in your assumptions will have a significant impact on your results. Even small changes can lead to substantial variations in results over time. A 1% change in your investment return can have an enormous impact on your ability to meet your retirement goals over the long term.
  • Financial projections are not mistake-proof and cannot ensure specific future results. Changes in tax or benefit laws, investment markets, or your own financial situation can cause actual results to deviate substantially from your projection. To address this uncertainty, you should create several scenarios, with various sets of assumptions, to evaluate a wide range of possible outcomes.

The questionnaire does not provide comprehensive investment advice. It is important to revise your financial profile periodically based on your experience and changing goals.