A Guide to Selecting a Model Portfolio

This paper is written to help the reader gain a better understanding of the trade-off between taking on additional risk through higher stock market exposure and the return potential associated with it. The paper looks at the last 29 years of data which includes the last three recessions. This should help the reader have a general understanding of the differences in the risk levels of the portfolios. We will also look at the differences in the long term returns of the portfolios. This paper should be viewed as a general guide using historical returns, and should not be used as
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Selling Out?

Market truth: “For the typical investor; there are only two ways to make money in the stock market: 1) through dividend payments or interest baring securities, or 2) through the appreciation in the value of the security you purchased. Please understand, however, that if are relying on value appreciation you neither make money nor lose money until after you sell the security.” The market truth stated above should be in the mind of any investor. It gives the investor at least a vague idea of when to sell a security. As you know when you buy a stock or a
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