More Switching C Returns Graphs

Here are additional graphs of Switching C real, annualized, total returns.

Switching C

Switching C optimizes Year 10 returns when P/E10=14 in a long lasting (secular) Bear Market.

Switching C is assures a high probability of a good return at Year 10. It takes the spread in possible outcomes into account. It does not strive to deliver the maximum possible return under all circumstances.

The P/E10 thresholds are 10-18-30. The allocations are 100%-80%-20%-0%, respectively.

Graphs

Here are the Year 10, 20 and 30 annualized, real, total returns of Switching C compared with that of a portfolio with an all-stock portfolio. The non-stock component is 2% TIPS.

Observations

Switching C satisfies its criteria. It is safer than an all-stock fixed allocation at Year 10. It delivers comparable results while limiting the downside risk. It even delivers comparable returns at Year 30.

Have fun.

John Walter Russell
July 31, 2009