getting back on track - noload fundx
TRANSCRIPT
Jason Browne, CIOFundX Investment Group
AAII - PhoenixMarch 2013
Agenda• Background on FundX Investment Group• US Stock indexes are at all-time highs: our thoughts on
Equity Investing?– The role of stocks in a portfolio– Our perspective on risk/reward– Current Fund and ETF leadership
• What about Fixed Income?– Risk, opportunity and what we plan to do when rates rise
• If you have missed the rally, what can you do now?• Reality check (needs/resources = limited choices)
– The secret to long-term investment success
Established in 1969, FundX Investment Group (formerly DAL Investment Company) pioneered the use of noload mutual funds to professionally manage investment portfolios for clients.
Our performance is rooted in a systematic investment discipline known as Upgrading. This strategy allows us to be invested in the best performing mutual funds available – whatever the current market conditions.
We offer three services which provide access to the benefits of the Upgrading strategy.
• Private Accounts• NoLoad FundX Newsletter• Mutual Funds
Core Equity Portfolios
Risk Managed Portfolios
Flexible Income Portfolios
5
•Risk•Time•Resources•Preferences
Profile andObjectives
•Stocks•Bonds •Cash•Commodities•Alternatives
Asset Allocation• Process drives portfolio
•Portfolio is built fund-by-fund based on Upgrading
Equity Portfolio
•Global•Diversified•Flexible•Automatic
Equity Allocation
Upgrading Selection Process
86 YearsStocks, Bonds, Cash & Inflation
Stocks $2,936
Bonds $95
Cash $21
Inflation $13
Historical Expectations
Stocks (10% total return)
Bonds (6% yield)
Cash (3% yield)
Alternatives (8% total return)
S&P 500 - 16 Years to Mar 2013
86 YearsStocks, Bonds, Cash & Inflation
Stocks $2,936
Bonds $95
Cash $21
Inflation $13
Secular Bear Market 1966-1982
Secular Bull Market 1982-2000
Historical Expectations
Stocks (10% total return)
Bonds (6% yield)
Cash (3% yield)
Alternatives (8% total return)
More Realistic Expectations
Stocks (8-10% total return)
Bonds (2-3% yield)
Cash (0-1% yield)
Alternatives (5-10% total return)
As We Invest, it Helps to Acknowledge that…
Most people:1. Will NEED to spend some of their own money to supplement other
sources of income.2. Have limited RESOURCES.3. Can’t earn what they NEED without taking some RISK that will feel
uncomfortable at times.Because:4. Low risk investments often don’t return enough5. When they do return enough, higher risk assets are generally doing so
much better that they are hard to resist6. Higher returning investment are volatile7. Most investors lose confidence in their investment strategy when their
portfolio declines in value
Required Rate of Return (ROR)
NEED / RESOURCES = RORIf you earn less than ROR, you will eventually run out of RESOURCES.
Choices:• Try to earn ROR or greater return• Decide in advance how long your RESOURCES must
last• Reduce your NEED and/or increase your RESOURCES
Different Isn’t Always Better
NoLoad FundX Long Term Performance
Long-term outperformance always includes underperformance
-10%
-5%
0%
5%
10%
15%
20%
25%
Relative performance of Class 3 Upgrading for calendar years 1980 to 2010, from best to worst.
Flexible Income Allocation
32
Calendar Year Returns (Flexible Income managed portfolio for trailing 10 years)
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012-40.00%
-20.00%
0.00%
20.00%
40.00%
15.78%
4.93%1.99%
8.56%4.99%
-0.23%
9.06% 7.54%
1.10%
7.23%
More Realistic Expectations
Stocks (8-12% total return)
Bonds (2-4% yield)
Cash (0-1% yield)
Alternatives (6-10% total return)
The Secret to Long-Term Investment Success
1. Use Realistic Assumptions– Return Expectations– Risk Tolerance– Investment Strategy
2. Set an Asset Allocation to Fund Your Goals– Beating Benchmarks is for Pros– Play the Hand You are Dealt
3. Be Disciplined and Act to Your Advantage– Rebalance– Monitor Your Results Vs. Your Assumptions– Follow a Plan
WWW.FUNDX.COM800-763-8639
Noload FundX Newsletter: $99 for 1 yearQuarterly Upgrader newsletter: Free
FundX Blog: Free
Mutual funds: www.upgraderfunds.comPrivate accounts: www.fundxinvestmentgroup.com