SlideShare a Scribd company logo

AAFP_3Q 2022.pdf

•
•
R
RamtinKhah1

Asset Allocation & Financial Planning - 3Q 2022

Economy & Finance
1 of 25
Download to read offline
Asset Allocation & Financial Planning 3Q 2022 Update As of July 1, 2022 www.arrowrootfamilyoffice.com
3Q 2022 Please see disclosures at end of presentation 2 Table of Content Market History Historical Asset Class Returns 4 Annual Asset Class Performance 5 Quarterly Asset Class Performance 6 Bull & Bear Markets 7 Average Returns Prior To & Following Equity Market Peaks 8 Historic Market Events 9 Volatility Index 10 History of Market Drawdowns by Year 11 Asset Allocation 20 Years of Asset Allocation Statistics 13 Asset Class Return Ranges 14 Asset Class Risk vs Reward 15 Asset Class Correlations 16 Inflation’s Impact 17 Important Investing Lessons Importance of Diversification 19 Time, Not Timing, is What Matters 20 Staying Invested for the Long Term 21 Impact of Various Withdrawal Rates 22 The Cycle of Market Emotions 23 Robert Santos CEO Mark McCarron Partner, Managing Director Diane Young Partner, Managing Director Cassandra Barry Partner, Managing Director Mike Knittel Partner, Portfolio Manager Ben Porras Managing Director Daniel Casey Vice President
Market History Performance, Major Events, Drawdowns 3Q 2022
3Q 2022 Market Category 2Q 2022 6 Months 1 Year 3 Year 5 Year 10 Year U.S. Large Cap Stocks -16.1% -20.0% -10.5% 10.6% 11.2% 12.9% U.S. Large Cap Growth Stocks -21.1% -28.2% -18.8% 12.4% 14.1% 14.6% U.S. Large Cap Value Stocks -12.3% -12.9% -6.8% 6.7% 7.0% 10.3% U.S. Small Cap Stocks -17.3% -23.5% -25.2% 4.1% 5.1% 9.3% Global Stocks -15.1% -19.9% -15.2% 6.3% 7.2% 8.9% Developed Market Stocks -13.1% -18.7% -17.0% 1.3% 2.2% 5.4% Emerging Market Stocks -10.4% -17.2% -25.3% -0.1% 1.6% 2.3% U.S. Taxable Bonds -4.6% -10.1% -10.1% -0.9% 0.8% 1.5% U.S. Municipal Bonds -2.5% -7.8% -7.5% 0.0% 1.5% 2.1% U.S. High Yield Bonds -9.4% -13.6% -12.4% -1.0% 1.2% 3.2% REITs -15.4% -20.5% -7.7% 4.8% 5.7% 7.5% Commodities 2.2% 28.2% 38.4% 19.8% 13.7% 0.6% Please see disclosures at end of presentation 4 Historical Asset Class Returns Disclosures: All performance data represents total returns. Performance longer than 1 year are annualized. Past performance is no guarantee of future results. Asset classes are represented by the following ETFs: U.S. Large Cap (SPY - SPDR S&P 500 ETF), U.S. Large Cap Growth (IWD – Russell 1000 Growth ETF), U.S. Large Cap Value (IWF – Russell 1000 Value ETF), U.S. Small Cap (IWM - iShares Russell 2000 ETF), Global Stocks (ACWI - iShares MSCI ACWI ETF), DM Stocks (EFA - iShares MSCI EAFE ETF), EM Stocks (EEM - iShares MSCI Emerging ETF), U.S. Taxable Bonds (AGG - iShares Core U.S. Aggregate Bond ETF), U.S. Municipal Bonds (MUB - iShares National Muni Bond ETF), U.S. High Yield Bonds (HYG - iShares iBoxx $ High Yield Corporate ETF), Commodities (DBC - Invesco DB Commodity ETF), and REITs (VNQ - Vanguard Real Estate ETF).
3Q 2022 69% EM 21% SM 37% EM 31% LG 28% SM 28% RE 19% EM 19% CM 25% DM 29% RE 28% RE 27% SM 18% DM 13% HY 22% LG 25% SM 20% SM 27% HY 16% EM 17% RE 12% LG 14% SM 22% DM 18% LG 41% CM 26% DM 15% LG 17% SM 38% SM 30% RE 11% EM 14% AA 19% AA 17% EM 40% RE 26% LG 13% AA 16% LG 32% LG 13% LG 8% RE 6% HY 18% EM 10% AA 29% LG 21% AA 12% CM 8% RE 12% AA 21% DM 6% AGG 8% AA 5% CM 14% HY 7% AGG 15% SM 16% CM 11% HY 8% AGG 11% HY 14% AA 5% SM 2% RE 2% AGG 5% RE 12% CM 7% DM 14% AA 8% AGG 3% AGG 8% DM 6% HY 4% AGG 6% HY 4% AA 1% LG 1% DM 4% AGG 2% CS 8% AGG 4% HY 11% DM 28% CM 2% CS 0% CS 6% AGG 2% LG 4% CM 2% RE 2% HY 0% AGG 0% CS 1% CS 0% AGG 2% CS 0% CS 4% HY 0% CS 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 YTD -17% HY 0% CS 0% CS 0% CS 0% CS 0% CS 0% CS -2% HY -5% RE 0% CS -10% AGG -23% AA 0% AA -2% AGG -4% EM -1% DM -4% LG -8% CM -2% AGG -14% HY -32% CM -3% CM -4% EM -6% DM -2% AA -6% AA -4% EM -14% AA -34% SM -4% SM -8% CM -28% CM -4% SM -6% RE -17% EM -36% RE -12% DM -5% HY -11% SM -19% DM -36% LG -19% EM -16% EM -12% CM -20% LG -40% DM -28% CM -14% DM -20% RE -48% EM -15% EM -23% SM Please see disclosures at end of presentation 5 Annual Asset Class Performance Emerging Market Equity (EM) Developed Market Equity (DM) U.S. Large Caps (LG) U.S. Small Caps (SM) High Yield (HY) Bonds (AGG) Cash (CS) REITs (RE) Commodities (CM) 60/35/5 Allocation (AA) Disclosures: All performance data represents total returns for the stated period. Past performance is no guarantee of future results. Asset classes are represented by the following ETFs: EM Equity (EEM - iShares MSCI Emerging Markets ETF), Commodities (DBC - Invesco DB Commodity Index Tracking ETF), DM Equity (EFA - iShares MSCI EAFE ETF), REITs (VNQ - Vanguard Real Estate ETF), Large Caps (SPY - SPDR S&P 500 ETF), Small Caps (IWM - iShares Russell 2000 ETF), High Yield (HYG - iShares iBoxx $ High Yield Corporate Bond ETF), Cash (BIL - SPDR Bloomberg Barclays 1-3 Month T-Bill ETF), Bonds (AGG - iShares Core U.S. Aggregate Bond ETF). The "60/35/5" portfolio is for illustrative purposes only and assumes the following weights: 25% Large Caps, 15% Developed Markets, 10% Small Caps, 5% Emerging Markets, 5% REITs, 25% Bonds, 5% High Yield, 5% Commodities, and 5% Cash.
3Q 2022 Please see disclosures at end of presentation 6 Quarterly Asset Class Performance Disclosures: All performance data represents total returns for the stated period. Past performance is no guarantee of future results. Asset classes are represented by the following ETFs: EM Equity (EEM - iShares MSCI Emerging Markets ETF), Commodities (DBC - Invesco DB Commodity Index Tracking ETF), DM Equity (EFA - iShares MSCI EAFE ETF), REITs (VNQ - Vanguard Real Estate ETF), Large Caps (SPY - SPDR S&P 500 ETF), Small Caps (IWM - iShares Russell 2000 ETF), High Yield (HYG - iShares iBoxx $ High Yield Corporate Bond ETF), Cash (BIL - SPDR Bloomberg Barclays 1-3 Month T-Bill ETF), Bonds (AGG - iShares Core U.S. Aggregate Bond ETF). The "60/35/5" portfolio is for illustrative purposes only and assumes the following weights: 25% Large Caps, 15% Developed Markets, 10% Small Caps, 5% Emerging Markets, 5% REITs, 25% Bonds, 5% High Yield, 5% Commodities, and 5% Cash. 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 YTD 1 Year REITs 7.5% EM Equity 12.1% Bonds 3.1% Small Caps 25.5% EM Equity 10.3% Small Caps 31.3% Comdty 13.0% Comdty 15.9% Comdty 4.8% REITs 15.0% Comdty 25.4% Comdty 2.2% Comdty 28.2% Comdty 38.4% Bonds 2.3% Small Caps 9.9% Cash 0.4% Large Caps 20.2% Large Caps 9.0% EM Equity 18.4% Small Caps 12.9% REITs 11.6% REITs 0.6% Large Caps 11.1% Cash 0.0% Cash 0.1% Cash 0.1% Cash 0.1% Large Caps 1.8% Large Caps 9.0% High Yield -11.5% EM Equity 17.8% Comdty 6.1% DM Equity 15.7% REITs 8.8% Large Caps 8.4% Large Caps 0.6% 60/35/5 4.2% 60/35/5 -4.0% Bonds -4.6% Bonds -10.1% REITs -7.7% High Yield 1.3% Comdty 7.7% 60/35/5 -15.0% DM Equity 15.5% Small Caps 5.0% Comdty 12.6% Large Caps 6.3% DM Equity 5.4% High Yield 0.3% Comdty 3.0% Large Caps -4.6% High Yield -9.4% High Yield -13.6% Bonds -10.1% 60/35/5 0.7% DM Equity 7.7% Large Caps -19.5% REITs 13.5% 60/35/5 4.6% Large Caps 12.1% DM Equity 4.0% 60/35/5 5.4% Bonds 0.0% DM Equity 2.8% High Yield -4.7% EM Equity -10.4% 60/35/5 -13.8% Large Caps -10.5% Cash 0.5% 60/35/5 5.6% DM Equity -23.0% 60/35/5 13.1% DM Equity 4.6% 60/35/5 11.0% 60/35/5 3.9% Small Caps 4.0% Cash 0.0% Small Caps 2.0% Bonds -5.8% 60/35/5 -10.5% EM Equity -17.2% 60/35/5 -10.6% DM Equity -0.8% High Yield 2.5% EM Equity -23.9% Comdty 9.4% High Yield 4.0% REITs 9.3% EM Equity 3.2% EM Equity 3.8% 60/35/5 -0.6% High Yield 0.8% REITs -6.1% DM Equity -13.1% DM Equity -18.7% High Yield -12.4% Small Caps -2.3% REITs 0.5% REITs -24.0% High Yield 7.3% REITs 1.3% High Yield 5.7% High Yield 0.6% High Yield 2.0% DM Equity -1.1% Cash 0.0% DM Equity -6.5% REITs -15.4% Large Caps -20.0% DM Equity -17.0% Comdty -4.4% Cash 0.4% Comdty -29.5% Bonds 3.1% Bonds 0.4% Bonds 0.7% Cash 0.0% Bonds 1.8% Small Caps -4.3% Bonds -0.1% Small Caps -7.5% Large Caps -16.1% REITs -20.5% Small Caps -25.2% EM Equity -4.8% Bonds 0.1% Small Caps -30.7% Cash 0.0% Cash 0.0% Cash 0.0% Bonds -3.4% Cash 0.0% EM Equity -8.6% EM Equity -1.6% EM Equity -7.6% Small Caps -17.3% Small Caps -23.5% EM Equity -25.3%
3Q 2022 Please see disclosures at end of presentation 7 S&P 500 Bull & Bear Markets Disclosures: All performance data represents price returns of the S&P 500. Past performance is no guarantee of future results. Bear Markets are defined as a decline of at least 20% from the market's high point to its low.
3Q 2022 Please see disclosures at end of presentation 8 Average Returns Prior To & Following Equity Market Peaks Disclosures: All performance data represents price returns of the S&P 500. Past performance is no guarantee of future results. The analysis is based on 14 bull/bear market cycles since 1937. Bear Markets are defined as a decline of at least 20% from the market's high point to its low. 46% 21% 14% 8% -11% -12% -15% -8% -25% 0% 25% 50% 24 Months 12 Months 6 Months 3 Months 3 Months 6 Months 12 Months 24 Months Prior to Equity Market Peak Following Equity Market Peak Equity Market Performance Average return before peak Average return after peak Equity Market Peak
3Q 2022 Please see disclosures at end of presentation 9 Historic Market Events Disclosures: All performance data represents price returns of the S&P 500. Past performance is no guarantee of future results. U.S. Recession dates are based on National Bureau of Economic Research (NBER).
3Q 2022 Please see disclosures at end of presentation 10 Volatility Index Disclosures: Past performance is no guarantee of future results. All performance data represents price returns of the SPDR S&P 500 ETF Trust (SPY). The CBOE VIX measures the market's expectations of future volatility and is based on S&P 500 options activity. 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 Major S&P 500 Market Pullbacks 5 15 25 35 45 55 65 75 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Volatility Index June 2013 Fed Taper Tantrum Oct 2014 Ebola Outbreak / Fears of Slowdown Aug 2015 China, Fed Policy Uncertainty Feb 2016 China, Oil Prices, U.S. Recession Fears Feb 2018 Tech selloff, Trade / Inflation Fears Dec 2018 Rising Rates, Global Trade March 2020 COVID-19, Oil collapse YTD 2022 Rising Interest Rates and Inflation Pressures
3Q 2022 Please see disclosures at end of presentation 11 History of Market Drawdowns by Year Disclosures: Past performance is no guarantee of future results. For illustrative purposes only. All performance data represents price returns and does not include dividends for the stated period. Drawdown is calculated from the intra-year peak to trough levels. Analysis is based on the State Street SPDR S&P 500 ETF (SPY). 2 12 27 -7 26 4 7 -2 34 20 31 27 20 -10 -13 -23 26 9 3 14 4 -38 23 13 0 13 30 11 -1 10 19 -6 29 16 27 -21 -34 -8 -8 -20 -6 -6 -5 -9 -3 -8 -11 -19 -12 -17 -30 -34 -14 -8 -7 -8 -10 -49 -28 -16 -19 -10 -6 -7 -12 -11 -3 -20 -7 -34 -5 -24 -60 -50 -40 -30 -20 -10 0 10 20 30 40 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Annual Return Drawdown Average Return Average Drawdown
Asset Allocation Statistics, Risk vs Reward, Asset Class Correlations 3Q 2022
3Q 2022 Please see disclosures at end of presentation 13 Asset Class Return Ranges Over 20 Years Disclosures: Past performance is no guarantee of future results. Performance data represents total returns for a 12-month period matching the description over the last 20 years. Note: Commodity and High Yield Bond ETF price data is only available since 2006. REITs ETF price data is only available since 2004. Asset classes are represented by the following ETFs: Emerging Markets (EEM - iShares MSCI Emerging Markets ETF), Commodities (DBC - Invesco DB Commodity ETF), Developed Markets (EFA - iShares MSCI EAFE ETF), REITs (VNQ - Vanguard Real Estate ETF), U.S. Large Caps (SPY - SPDR S&P 500 ETF), U.S. Small Caps (IWM - iShares Russell 2000 ETF), High Yield (HYG - iShares iBoxx $ High Yield Corporate Bond ETF), Cash (BIL - SPDR Bloomberg Barclays 1-3 Month T-Bill ETF), Bond Aggregate (AGG - iShares Core U.S. Aggregate Bond ETF). -42% -43% -53% -56% -49% -28% -10% -49% 0% 95% 56% 86% 109% 58% 42% 14% 77% 3% 12% 12% 11% 11% 9% 5% 4% 3% 1% -100% -50% 0% 50% 100% U.S. Small Caps U.S. Large Caps Emerging Markets REITs DevelopedMarkets High Yield Bond Aggregate Commodities Cash Lowest 1 Year Total Return Highest 1 Year Total Return Average 1 Year Total Return
3Q 2022 Please see disclosures at end of presentation 14 Asset Class Risk vs Reward Disclosures: Past performance is no guarantee of future results. Annual Standard Deviation and the Annualized Return use monthly data from the past 10 years. Annualized returns are based on dividends reinvested. Asset classes are represented by the following ETFs: Cash (BIL - SPDR Bloomberg Barclays 1-3 Month T-Bill ETF), Bond Aggregate (AGG - iShares Core U.S. Aggregate Bond ETF), Investment Grade (LQD - iShares iBoxx $ Investment Grade Corporate Bond ETF), High Yield (HYG - iShares iBoxx $ High Yield Corporate Bond ETF), Large Caps (SPY - SPDR S&P 500 ETF), Small Caps (IWM - iShares Russell 2000 ETF), Mid Caps (MDY - SPDR S&P Midcap 400 ETF), REITs (VNQ - Vanguard Real Estate ETF), Emerging Markets (EEM - iShares MSCI Emerging Markets ETF), Developed Market (EFA - iShares MSCI EAFE ETF). Cash Bond Aggregate Investment Grade Bonds High Yield Bonds Large Caps Small Caps Mid Caps REITs Emerging Markets Developed Markets 0% 5% 10% 15% 20% 0% 5% 10% 15% 20% Annual Standard Deviation Annualized Return ↑ Higher Volatility Higher Return →
3Q 2022 U.S. Large Caps U.S. Small Caps Developed Markets Emerging Markets Bond Aggregate High Yield U.S. Dollar Comdty U.S. Growth U.S. Value REITs Gold U.S. Large Caps 1.00 0.87 0.85 0.68 0.14 0.76 -0.34 0.42 0.96 0.95 0.67 0.05 U.S. Small Caps 1.00 0.77 0.64 0.04 0.71 -0.27 0.45 0.80 0.89 0.61 -0.03 Developed Markets 1.00 0.80 0.16 0.77 -0.51 0.50 0.79 0.85 0.60 0.07 Emerging Markets 1.00 0.21 0.69 -0.58 0.46 0.63 0.68 0.47 0.21 Bond Aggregate 1.00 0.39 -0.22 -0.22 0.25 0.02 0.41 0.39 High Yield 1.00 -0.40 0.47 0.70 0.77 0.63 0.26 U.S. Dollar 1.00 -0.38 -0.34 -0.32 -0.14 -0.38 Commodities 1.00 0.33 0.50 0.22 0.17 U.S. Growth 1.00 0.82 0.63 0.10 U.S. Value 1.00 0.67 0.01 REITs 1.00 0.14 Gold 1.00 Please see disclosures at end of presentation 15 Asset Class Correlations Disclosures: Past performance is no guarantee of future results. Correlations are based on 10 years of monthly total returns. Asset Classes are represented by the following ETFS: U.S. Large Caps (SPY - SPDR S&P 500 ETF), U.S. Small Caps (IWM - iShares Russell 2000 ETF), Developed Markets (EFA - iShares MSCI EAFE ETF), Emerging Markets (EEM - iShares MSCI Emerging Markets ETF), Bonds (AGG - iShares Core U.S. Aggregate Bond ETF), High Yield (HYG - iShares iBoxx $ High Yield Corporate Bond ETF), Municipal Bonds (MUB - iShares National Muni Bond ETF), USD Index (United States Dollar Index), Emerging Market Sovereign Debt (LEMB - iShares J.P. Morgan EM Local Currency Bond ETF), Commodities (DBC - Invesco DB Commodity ETF), REITs (VNQ - Vanguard Real Estate ETF), Gold (GLD - SPDR Gold ETF).
3Q 2022 Please see disclosures at end of presentation 16 Inflation’s Impact Inflation’s Impact on Your Purchasing Power Assumes constant annual inflation rates Price Increases Based on Inflation Assumes constant annual inflation rates $92,237 $83,375 $75,364 $68,123 $61,578 $84,935 $69,253 $56,467 $46,042 $37,541 $0 $25,000 $50,000 $75,000 $100,000 Year 1 5 10 15 20 25 2% Annual Inflation 4% Annual Inflation $108,243 $119,509 $131,948 $145,681 $160,844 $116,986 $142,331 $173,168 $210,685 $256,330 $0 $100,000 $200,000 $300,000 Year 1 5 10 15 20 25 2% Annual Inflation 4% Annual Inflation Disclosures: Past performance is no guarantee of future results. Investing involves risks, including possible loss of principal. Hypothetical illustrative examples for educational purposes only. Assumes constant annual inflation rate.
Important Investing Lessons Diversification, Market Timing, Withdrawing Capital 3Q 2022
3Q 2022 Please see disclosures at end of presentation 18 Importance of Diversification Disclosures: Past performance is no guarantee of future results. Performance is for illustrative purposes only. Diversification does not guarantee a profit or protect against a loss in a declining market. Diversified Portfolio is represented by 40% Large Caps (SPY - SPDR S&P 500 ETF), 10% Developed Markets (EFA - iShares MSCI EAFE ETF), 5% Small Caps (IWM – iShares Russell 2000 ETF), 30% Bonds (AGG – iShares U.S. Aggregate Bond ETF), 10% High Yield (HYG - U.S. Corporate High Yield Bond ETF), and 5% Emerging Markets (EEM - iShares MSCI Emerging Markets ETF). Standard deviation is a measure of the amount of variation of each portfolio. Bonds, $115,804 Large Caps, $334,920 Small Caps, $243,755 Intl. Stocks, $158,080 High Yield, $136,470 Diversified Portfolio, $216,268 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Growth of $100k Over Last 10 Years 5.3% 3.9% 3.9% 2.6% 2.0% 1.0% Small Caps Large Caps Intl. Stocks Diversified Portfolio High Yield Bonds A well-diversified portfolio aims to minimize volatility while providing more steady returns
3Q 2022 Please see disclosures at end of presentation 19 Time, Not Timing, is What Matters Disclosures: Past performance is no guarantee of future results. The analysis is based on 20 years of daily price return data. The portfolio value is represented by the State Street SPDR S&P 500 ETF (SPY), which represents an index of large cap stocks. The analysis does not include the impact of taxes or capital gains. $564,727 $347,972 $255,533 $195,025 $153,912 $123,802 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 Stayed Invested Everyday Over Last 20 Years Missed 5 Best Days Missed 10 Best Days Missed 15 Best Days Missed 20 Best Days Missed 25 Best Days Portfolio Value Starting with $100k 20 Years Ago -10 -5 0 5 10 Jan 2020 Apr 2020 Jul 2020 Oct 2020 S&P 500 Daily Returns (%) As shown during 2020, the best days in the market often came after the worst days.
3Q 2022 Please see disclosures at end of presentation 20 Staying Invested for the Long Term Range of Annualized Returns for Rolling 1-, 3-, 5-, 10-Year Periods Based on 50 Stock / 50 Bond Portfolio’s Rolling Annual Returns Over Last 30 Years % of Time a 50 Stock / 50 Bond Portfolio was Positive / Negative Based on Various Holding Periods Using Monthly Data From the Last 30 Years Disclosures: Past performance is no guarantee of future results. The analysis is based on the last 30 years of total return data. Returns are represented by a 50/50 allocation to equities (State Street S&P 500 ETF - SPY) and bonds (Bloomberg Bond Aggregate Index). -14% -1% 2% 3% 23% 20% 17% 14% -30% -15% 0% 15% 30% 1 Year 3 Year 5 Year 10 Year Range of Annual Returns 69% 31% % of Time You MadeMoney (Positive Return) % of Time You Lost Money (Negative Return) 87% 13% 100% 100% 1 Month 1 Year 10 Years 15 Years Holding Periods
3Q 2022 Please see disclosures at end of presentation 21 Impact of Various Withdrawal Rates Disclosures: Past performance is no guarantee of future results. This is a hypothetical illustration for educational purposes only and assumes a hypothetical initial portfolio balance of $500,000 as of January 1st, 2000. The analysis looks at the impact on the portfolio based on various amounts withdrawn monthly from the portfolio throughout several market cycles. Each monthly withdrawal is adjusted annually for inflation (measured by the consumer price index) and the portfolio is rebalanced at the end of the month. This hypothetical portfolio is made up of 50% stocks represented by the State Street SPDR S&P 500 ETF (SPY) and 50% bonds represented by the Bloomberg Barclays U.S. Aggregate Bond ETF (AGG). The longevity of a portfolio can be based on the following factors: withdrawal rate, asset class mix, diversification, capital gains, fund expenses, and life expectancy. Performance is based on total returns including dividends reinvested. $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 2000 2005 2010 2015 2020 Age 65 Age 70 Age 75 Age 80 Age 85 Portfolio Value Starting with $500k 4% 5% 6% 7% 8% Withdrawal Rates A lower withdrawal rate, such as 3-5%, can increase the longevity of a portfolio’s life.
3Q 2022 Encouraged Excitement Confident Euphoric Nervous Fear Panic Encouraged Optimism Please see disclosures at end of presentation 22 The Cycle of Market Emotions Disclosures: Strictly for illustrative and educational purposes only. This analysis is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Point of Maximum Potential Risk Investors Tend to Buy High Point of Maximum Potential Opportunity Investors Tend to Sell Low
3Q 2022 Please see disclosures at end of presentation 23 Definitions Annualized Return The rate at which an investment grows each year over the period to arrive at the final valuation. Bear Market A decline of at least 20% from the market's high point to its low. Beta A measure of how an individual asset moves when the overall stock market increases or decreases. Correlation A measure of the extent to which two variables are related Dividend Yield: The dividend yield or dividend-price ratio of a share is the dividend per share, divided by the price per share. It is also a company's total annual dividend payments divided by its market capitalization, assuming the number of shares is constant. Developed Markets A country that is most developed in terms of its economy and capital markets. The country must be high income, but this also includes openness to foreign ownership, ease of capital movement, and efficiency of market institutions. Emerging Markets A country that has some characteristics of a developed market but does not fully meet its standards. This includes markets that may become developed markets in the future or were in the past Large Cap Stocks Shares of publicly traded corporations with a market capitalization of $10 billion or more LTM An acronym for "Last Twelve Months" or the past one year NTM An acronym for "Next Twelve Months" or the next one year Price Return The rate of return on an investment portfolio, where the return measure takes into account only the capital appreciation of the portfolio, not including income generated in the form of interest or dividends. Total Return Return on a portfolio of investments including capital appreciation and income received on the portfolio. Small Cap Stocks Shares of publicly traded corporations with a market capitalization of $2 billion or less. Standard Deviation In statistics, the standard deviation is a measure of the amount of variation or dispersion of a set of values. A low standard deviation indicates the values tend to be close to the historical average of the data set, while a high standard deviation indicates the current value is outside of the historical average range. CBOE Volatility Index (VIX) Measures the market's expectations of future volatility and is based on S&P 500 options activity.
3Q 2022 Please see disclosures at end of presentation 24 Disclosures and Legal Notice § Investing involves risk, including the possible loss of principal. Stock markets can be volatile. Investments in securities of small and medium capitalization companies may involve greater risk of loss and more abrupt fluctuations in market price than investments in larger companies. Investments in fixed-income instruments are subject to the possibility that interest rates could rise, causing their values to decline. High yield and unrated debt securities are at a greater risk of default than investment grade bonds and may be less liquid, which may increase volatility. Investors in asset-backed securities, including mortgage-backed securities and collateralized loan obligations (“CLOs”), generally receive payments that are part interest and part return of principal. These payments may vary based on the rate loans are repaid. Some asset-backed securities may have structures that make their reaction to interest rates and other factors difficult to predict, making their prices volatile and they are subject to liquidity and valuation risk. CLOs bear similar risks to investing in loans directly, such as credit, interest rate, counterparty, prepayment, liquidity, and valuation risks. Loans are often below investment grade, may be unrated, and typically offer a fixed or floating interest rate. § This material is distributed or presented for informational or educational purposes only and should not be considered a recommendation of any particular security, strategy or investment product, or as investing advice of any kind. This material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment decisions, and does not constitute a solicitation of an offer to buy or sell securities. The content contained herein is not intended to be and should not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation. § This material contains opinions of the author, but not necessarily those of Arrowroot Family Office LLC or its subsidiaries. The opinions contained herein are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. No part of this material may be reproduced or referred to in any form, without express written permission of Arrowroot Family Office, LLC. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. Past performance is not indicative of future results..
Thank You

Recommended

Asset Allocation & Financial Planning
Asset Allocation & Financial PlanningAsset Allocation & Financial Planning
Asset Allocation & Financial PlanningRamtinKhah1
 
Planning Strategies Q410
Planning Strategies Q410Planning Strategies Q410
Planning Strategies Q410Barry Mendelson
 
Seminar Presentation Actions You Can Take In A Volatile Market
Seminar Presentation Actions You Can Take In A Volatile MarketSeminar Presentation Actions You Can Take In A Volatile Market
Seminar Presentation Actions You Can Take In A Volatile Marketr49265
 
Quarterly Market Review Q1 2020
Quarterly Market Review Q1 2020Quarterly Market Review Q1 2020
Quarterly Market Review Q1 2020Susan Langdon
 
Pioneer Compass: A Quarterly Update on the Direction of the Markets
Pioneer Compass: A Quarterly Update on the Direction of the MarketsPioneer Compass: A Quarterly Update on the Direction of the Markets
Pioneer Compass: A Quarterly Update on the Direction of the MarketsAmundi Pioneer
 
RWC Investment Introduction Presentation
RWC Investment Introduction PresentationRWC Investment Introduction Presentation
RWC Investment Introduction PresentationSprague Kolp
 
2014q4 Edward Jones Advisory Solutions Market Commentary
2014q4 Edward Jones Advisory Solutions Market Commentary2014q4 Edward Jones Advisory Solutions Market Commentary
2014q4 Edward Jones Advisory Solutions Market CommentaryAllen Parker, CFP ®
 
Q2 2020 Quarterly Market Review
Q2 2020 Quarterly Market ReviewQ2 2020 Quarterly Market Review
Q2 2020 Quarterly Market ReviewSusan Langdon
 

Recommended

Asset Allocation & Financial Planning
Asset Allocation & Financial PlanningAsset Allocation & Financial Planning
Asset Allocation & Financial PlanningRamtinKhah1
 
Planning Strategies Q410
Planning Strategies Q410Planning Strategies Q410
Planning Strategies Q410Barry Mendelson
 
Seminar Presentation Actions You Can Take In A Volatile Market
Seminar Presentation Actions You Can Take In A Volatile MarketSeminar Presentation Actions You Can Take In A Volatile Market
Seminar Presentation Actions You Can Take In A Volatile Marketr49265
 
Quarterly Market Review Q1 2020
Quarterly Market Review Q1 2020Quarterly Market Review Q1 2020
Quarterly Market Review Q1 2020Susan Langdon
 
Pioneer Compass: A Quarterly Update on the Direction of the Markets
Pioneer Compass: A Quarterly Update on the Direction of the MarketsPioneer Compass: A Quarterly Update on the Direction of the Markets
Pioneer Compass: A Quarterly Update on the Direction of the MarketsAmundi Pioneer
 
RWC Investment Introduction Presentation
RWC Investment Introduction PresentationRWC Investment Introduction Presentation
RWC Investment Introduction PresentationSprague Kolp
 
2014q4 Edward Jones Advisory Solutions Market Commentary
2014q4 Edward Jones Advisory Solutions Market Commentary2014q4 Edward Jones Advisory Solutions Market Commentary
2014q4 Edward Jones Advisory Solutions Market CommentaryAllen Parker, CFP ®
 
Q2 2020 Quarterly Market Review
Q2 2020 Quarterly Market ReviewQ2 2020 Quarterly Market Review
Q2 2020 Quarterly Market ReviewSusan Langdon
 
Quarterly market review (qmr) q1 2018 (landscape version)
Quarterly market review (qmr) q1 2018 (landscape version)Quarterly market review (qmr) q1 2018 (landscape version)
Quarterly market review (qmr) q1 2018 (landscape version)Mark Beal, CFP®
 
Asset Allocation And Your Portfolio
Asset Allocation And Your PortfolioAsset Allocation And Your Portfolio
Asset Allocation And Your PortfolioWilliamDeye
 
Financial Synergies | Q4 2019 Market Review
Financial Synergies | Q4 2019 Market ReviewFinancial Synergies | Q4 2019 Market Review
Financial Synergies | Q4 2019 Market ReviewFinancial Synergies Wealth Advisors, Inc.
 
DSP Midcap Fund
DSP Midcap FundDSP Midcap Fund
DSP Midcap FundDSP Mutual Fund
 
DSP Midcap Fund Presentation March 23.pdf
DSP Midcap Fund Presentation March 23.pdfDSP Midcap Fund Presentation March 23.pdf
DSP Midcap Fund Presentation March 23.pdfDSP Mutual Fund
 
DSP Midcap Fund
DSP Midcap FundDSP Midcap Fund
DSP Midcap FundDSP Mutual Fund
 
Global Equity Markets_3Q_2022.pdf
Global Equity Markets_3Q_2022.pdfGlobal Equity Markets_3Q_2022.pdf
Global Equity Markets_3Q_2022.pdfRamtinKhah1
 
Financial Synergies | Q1 2018 Market Review
Financial Synergies | Q1 2018 Market ReviewFinancial Synergies | Q1 2018 Market Review
Financial Synergies | Q1 2018 Market ReviewFinancial Synergies Wealth Advisors, Inc.
 
Barometer Readings November 2016
Barometer Readings November 2016Barometer Readings November 2016
Barometer Readings November 2016David Burrows
 
Quarterly market review - Q4 2018
Quarterly market review - Q4 2018Quarterly market review - Q4 2018
Quarterly market review - Q4 2018Mark Beal, CFP®
 
2018 Third Quarter Market Review
2018 Third Quarter Market Review2018 Third Quarter Market Review
2018 Third Quarter Market Reviewpurefin
 
ASI Wealth Management & Consulting Services - Q1 Quarterly Market Review
ASI Wealth Management & Consulting Services - Q1 Quarterly Market ReviewASI Wealth Management & Consulting Services - Q1 Quarterly Market Review
ASI Wealth Management & Consulting Services - Q1 Quarterly Market ReviewSusan Langdon
 
Q1 2019 Quarterly Market Review
Q1 2019 Quarterly Market ReviewQ1 2019 Quarterly Market Review
Q1 2019 Quarterly Market ReviewSusan Langdon
 
2020.Q1 - Quarterly Market Review
2020.Q1 - Quarterly Market Review2020.Q1 - Quarterly Market Review
2020.Q1 - Quarterly Market ReviewMark Beal, CFP®
 
Barometer readings november 2016
Barometer readings november 2016Barometer readings november 2016
Barometer readings november 2016Paul Song
 
Q1 2020 Market Review
Q1 2020 Market ReviewQ1 2020 Market Review
Q1 2020 Market ReviewPaul Ohanian, CFP®
 
Newsletter Q3 2016
Newsletter Q3 2016Newsletter Q3 2016
Newsletter Q3 2016Rachel Miller
 
Equity Update - October 2018
Equity Update - October 2018Equity Update - October 2018
Equity Update - October 2018iciciprumf
 
Second Quarter Market Review 2014
Second Quarter Market Review 2014Second Quarter Market Review 2014
Second Quarter Market Review 2014Utica Physicians' Association , Ltd. (UPAL)
 
2022 Navigate Uncertainty with the Right Asset Allocation
2022 Navigate Uncertainty with the Right Asset Allocation2022 Navigate Uncertainty with the Right Asset Allocation
2022 Navigate Uncertainty with the Right Asset AllocationQuantum Mutual Fund
 
Q3 2024 Earnings Conference Call and Webcast Slides
Q3 2024 Earnings Conference Call and Webcast SlidesQ3 2024 Earnings Conference Call and Webcast Slides
Q3 2024 Earnings Conference Call and Webcast SlidesMarketing847413
 
Classical Theory of Macroeconomics by Adam Smith
Classical Theory of Macroeconomics by Adam SmithClassical Theory of Macroeconomics by Adam Smith
Classical Theory of Macroeconomics by Adam SmithAdamYassin2
 

More Related Content

Similar to AAFP_3Q 2022.pdf

Quarterly market review (qmr) q1 2018 (landscape version)
Quarterly market review (qmr) q1 2018 (landscape version)Quarterly market review (qmr) q1 2018 (landscape version)
Quarterly market review (qmr) q1 2018 (landscape version)Mark Beal, CFP®
 
Asset Allocation And Your Portfolio
Asset Allocation And Your PortfolioAsset Allocation And Your Portfolio
Asset Allocation And Your PortfolioWilliamDeye
 
DSP Midcap Fund Presentation March 23.pdf
DSP Midcap Fund Presentation March 23.pdfDSP Midcap Fund Presentation March 23.pdf
DSP Midcap Fund Presentation March 23.pdfDSP Mutual Fund
 
Global Equity Markets_3Q_2022.pdf
Global Equity Markets_3Q_2022.pdfGlobal Equity Markets_3Q_2022.pdf
Global Equity Markets_3Q_2022.pdfRamtinKhah1
 
Barometer Readings November 2016
Barometer Readings November 2016Barometer Readings November 2016
Barometer Readings November 2016David Burrows
 
Quarterly market review - Q4 2018
Quarterly market review - Q4 2018Quarterly market review - Q4 2018
Quarterly market review - Q4 2018Mark Beal, CFP®
 
2018 Third Quarter Market Review
2018 Third Quarter Market Review2018 Third Quarter Market Review
2018 Third Quarter Market Reviewpurefin
 
ASI Wealth Management & Consulting Services - Q1 Quarterly Market Review
ASI Wealth Management & Consulting Services - Q1 Quarterly Market ReviewASI Wealth Management & Consulting Services - Q1 Quarterly Market Review
ASI Wealth Management & Consulting Services - Q1 Quarterly Market ReviewSusan Langdon
 
Q1 2019 Quarterly Market Review
Q1 2019 Quarterly Market ReviewQ1 2019 Quarterly Market Review
Q1 2019 Quarterly Market ReviewSusan Langdon
 
2020.Q1 - Quarterly Market Review
2020.Q1 - Quarterly Market Review2020.Q1 - Quarterly Market Review
2020.Q1 - Quarterly Market ReviewMark Beal, CFP®
 
Barometer readings november 2016
Barometer readings november 2016Barometer readings november 2016
Barometer readings november 2016Paul Song
 
Equity Update - October 2018
Equity Update - October 2018Equity Update - October 2018
Equity Update - October 2018iciciprumf
 
2022 Navigate Uncertainty with the Right Asset Allocation
2022 Navigate Uncertainty with the Right Asset Allocation2022 Navigate Uncertainty with the Right Asset Allocation
2022 Navigate Uncertainty with the Right Asset AllocationQuantum Mutual Fund
 

Similar to AAFP_3Q 2022.pdf (20)

Quarterly market review (qmr) q1 2018 (landscape version)
Quarterly market review (qmr) q1 2018 (landscape version)Quarterly market review (qmr) q1 2018 (landscape version)
Quarterly market review (qmr) q1 2018 (landscape version)
 
Asset Allocation And Your Portfolio
Asset Allocation And Your PortfolioAsset Allocation And Your Portfolio
Asset Allocation And Your Portfolio
 
Financial Synergies | Q4 2019 Market Review
Financial Synergies | Q4 2019 Market ReviewFinancial Synergies | Q4 2019 Market Review
Financial Synergies | Q4 2019 Market Review
 
DSP Midcap Fund
DSP Midcap FundDSP Midcap Fund
DSP Midcap Fund
 
DSP Midcap Fund Presentation March 23.pdf
DSP Midcap Fund Presentation March 23.pdfDSP Midcap Fund Presentation March 23.pdf
DSP Midcap Fund Presentation March 23.pdf
 
DSP Midcap Fund
DSP Midcap FundDSP Midcap Fund
DSP Midcap Fund
 
Global Equity Markets_3Q_2022.pdf
Global Equity Markets_3Q_2022.pdfGlobal Equity Markets_3Q_2022.pdf
Global Equity Markets_3Q_2022.pdf
 
Financial Synergies | Q1 2018 Market Review
Financial Synergies | Q1 2018 Market ReviewFinancial Synergies | Q1 2018 Market Review
Financial Synergies | Q1 2018 Market Review
 
Barometer Readings November 2016
Barometer Readings November 2016Barometer Readings November 2016
Barometer Readings November 2016
 
Quarterly market review - Q4 2018
Quarterly market review - Q4 2018Quarterly market review - Q4 2018
Quarterly market review - Q4 2018
 
2018 Third Quarter Market Review
2018 Third Quarter Market Review2018 Third Quarter Market Review
2018 Third Quarter Market Review
 
ASI Wealth Management & Consulting Services - Q1 Quarterly Market Review
ASI Wealth Management & Consulting Services - Q1 Quarterly Market ReviewASI Wealth Management & Consulting Services - Q1 Quarterly Market Review
ASI Wealth Management & Consulting Services - Q1 Quarterly Market Review
 
Q1 2019 Quarterly Market Review
Q1 2019 Quarterly Market ReviewQ1 2019 Quarterly Market Review
Q1 2019 Quarterly Market Review
 
2020.Q1 - Quarterly Market Review
2020.Q1 - Quarterly Market Review2020.Q1 - Quarterly Market Review
2020.Q1 - Quarterly Market Review
 
Barometer readings november 2016
Barometer readings november 2016Barometer readings november 2016
Barometer readings november 2016
 
Q1 2020 Market Review
Q1 2020 Market ReviewQ1 2020 Market Review
Q1 2020 Market Review
 
Newsletter Q3 2016
Newsletter Q3 2016Newsletter Q3 2016
Newsletter Q3 2016
 
Equity Update - October 2018
Equity Update - October 2018Equity Update - October 2018
Equity Update - October 2018
 
Second Quarter Market Review 2014
Second Quarter Market Review 2014Second Quarter Market Review 2014
Second Quarter Market Review 2014
 
2022 Navigate Uncertainty with the Right Asset Allocation
2022 Navigate Uncertainty with the Right Asset Allocation2022 Navigate Uncertainty with the Right Asset Allocation
2022 Navigate Uncertainty with the Right Asset Allocation
 

Recently uploaded

Q3 2024 Earnings Conference Call and Webcast Slides
Q3 2024 Earnings Conference Call and Webcast SlidesQ3 2024 Earnings Conference Call and Webcast Slides
Q3 2024 Earnings Conference Call and Webcast SlidesMarketing847413
 
Classical Theory of Macroeconomics by Adam Smith
Classical Theory of Macroeconomics by Adam SmithClassical Theory of Macroeconomics by Adam Smith
Classical Theory of Macroeconomics by Adam SmithAdamYassin2
 
Instant Issue Debit Cards - School Designs
Instant Issue Debit Cards - School DesignsInstant Issue Debit Cards - School Designs
Instant Issue Debit Cards - School Designsegoetzinger
 
AfRESFullPaper22018EmpiricalPerformanceofRealEstateInvestmentTrustsandShareho...
AfRESFullPaper22018EmpiricalPerformanceofRealEstateInvestmentTrustsandShareho...AfRESFullPaper22018EmpiricalPerformanceofRealEstateInvestmentTrustsandShareho...
AfRESFullPaper22018EmpiricalPerformanceofRealEstateInvestmentTrustsandShareho...yordanosyohannes2
 
（办理原版一样）QUT毕业证昆士兰科技大学毕业证学位证留信学历认证成绩单补办
（办理原版一样）QUT毕业证昆士兰科技大学毕业证学位证留信学历认证成绩单补办（办理原版一样）QUT毕业证昆士兰科技大学毕业证学位证留信学历认证成绩单补办
（办理原版一样）QUT毕业证昆士兰科技大学毕业证学位证留信学历认证成绩单补办fqiuho152
 
Instant Issue Debit Cards - High School Spirit
Instant Issue Debit Cards - High School SpiritInstant Issue Debit Cards - High School Spirit
Instant Issue Debit Cards - High School Spiritegoetzinger
 
Financial Leverage Definition, Advantages, and Disadvantages
Financial Leverage Definition, Advantages, and DisadvantagesFinancial Leverage Definition, Advantages, and Disadvantages
Financial Leverage Definition, Advantages, and Disadvantagesjayjaymabutot13
 
magnetic-pensions-a-new-blueprint-for-the-dc-landscape.pdf
magnetic-pensions-a-new-blueprint-for-the-dc-landscape.pdfmagnetic-pensions-a-new-blueprint-for-the-dc-landscape.pdf
magnetic-pensions-a-new-blueprint-for-the-dc-landscape.pdfHenry Tapper
 
Vip B Aizawl Call Girls #9907093804 Contact Number Escorts Service Aizawl
Vip B Aizawl Call Girls #9907093804 Contact Number Escorts Service AizawlVip B Aizawl Call Girls #9907093804 Contact Number Escorts Service Aizawl
Vip B Aizawl Call Girls #9907093804 Contact Number Escorts Service Aizawlmakika9823
 
Bladex 1Q24 Earning Results Presentation
Bladex 1Q24 Earning Results PresentationBladex 1Q24 Earning Results Presentation
Bladex 1Q24 Earning Results PresentationBladex
 
VIP Call Girls LB Nagar ( Hyderabad ) Phone 8250192130 | ₹5k To 25k With Room...
VIP Call Girls LB Nagar ( Hyderabad ) Phone 8250192130 | ₹5k To 25k With Room...VIP Call Girls LB Nagar ( Hyderabad ) Phone 8250192130 | ₹5k To 25k With Room...
VIP Call Girls LB Nagar ( Hyderabad ) Phone 8250192130 | ₹5k To 25k With Room...Suhani Kapoor
 
Unveiling the Top Chartered Accountants in India and Their Staggering Net Worth
Unveiling the Top Chartered Accountants in India and Their Staggering Net WorthUnveiling the Top Chartered Accountants in India and Their Staggering Net Worth
Unveiling the Top Chartered Accountants in India and Their Staggering Net WorthShaheen Kumar
 
Interimreport1 January–31 March2024 Elo Mutual Pension Insurance Company
Interimreport1 January–31 March2024 Elo Mutual Pension Insurance CompanyInterimreport1 January–31 March2024 Elo Mutual Pension Insurance Company
Interimreport1 January–31 March2024 Elo Mutual Pension Insurance CompanyTyöeläkeyhtiö Elo
 
Stock Market Brief Deck for 4/24/24 .pdf
Stock Market Brief Deck for 4/24/24 .pdfStock Market Brief Deck for 4/24/24 .pdf
Stock Market Brief Deck for 4/24/24 .pdfMichael Silva
 
call girls in Nand Nagri (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
call girls in Nand Nagri (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️call girls in Nand Nagri (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
call girls in Nand Nagri (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️9953056974 Low Rate Call Girls In Saket, Delhi NCR
 
Bladex Earnings Call Presentation 1Q2024
Bladex Earnings Call Presentation 1Q2024Bladex Earnings Call Presentation 1Q2024
Bladex Earnings Call Presentation 1Q2024Bladex
 
Lundin Gold April 2024 Corporate Presentation v4.pdf
Lundin Gold April 2024 Corporate Presentation v4.pdfLundin Gold April 2024 Corporate Presentation v4.pdf
Lundin Gold April 2024 Corporate Presentation v4.pdfAdnet Communications
 
Financial institutions facilitate financing, economic transactions, issue fun...
Financial institutions facilitate financing, economic transactions, issue fun...Financial institutions facilitate financing, economic transactions, issue fun...
Financial institutions facilitate financing, economic transactions, issue fun...Avanish Goel
 
Call Girls Service Nagpur Maya Call 7001035870 Meet With Nagpur Escorts
Call Girls Service Nagpur Maya Call 7001035870 Meet With Nagpur EscortsCall Girls Service Nagpur Maya Call 7001035870 Meet With Nagpur Escorts
Call Girls Service Nagpur Maya Call 7001035870 Meet With Nagpur Escortsranjana rawat
 

Recently uploaded (20)

Q3 2024 Earnings Conference Call and Webcast Slides
Q3 2024 Earnings Conference Call and Webcast SlidesQ3 2024 Earnings Conference Call and Webcast Slides
Q3 2024 Earnings Conference Call and Webcast Slides
 
Classical Theory of Macroeconomics by Adam Smith
Classical Theory of Macroeconomics by Adam SmithClassical Theory of Macroeconomics by Adam Smith
Classical Theory of Macroeconomics by Adam Smith
 
Instant Issue Debit Cards - School Designs
Instant Issue Debit Cards - School DesignsInstant Issue Debit Cards - School Designs
Instant Issue Debit Cards - School Designs
 
AfRESFullPaper22018EmpiricalPerformanceofRealEstateInvestmentTrustsandShareho...
AfRESFullPaper22018EmpiricalPerformanceofRealEstateInvestmentTrustsandShareho...AfRESFullPaper22018EmpiricalPerformanceofRealEstateInvestmentTrustsandShareho...
AfRESFullPaper22018EmpiricalPerformanceofRealEstateInvestmentTrustsandShareho...
 
（办理原版一样）QUT毕业证昆士兰科技大学毕业证学位证留信学历认证成绩单补办
（办理原版一样）QUT毕业证昆士兰科技大学毕业证学位证留信学历认证成绩单补办（办理原版一样）QUT毕业证昆士兰科技大学毕业证学位证留信学历认证成绩单补办
（办理原版一样）QUT毕业证昆士兰科技大学毕业证学位证留信学历认证成绩单补办
 
Instant Issue Debit Cards - High School Spirit
Instant Issue Debit Cards - High School SpiritInstant Issue Debit Cards - High School Spirit
Instant Issue Debit Cards - High School Spirit
 
Financial Leverage Definition, Advantages, and Disadvantages
Financial Leverage Definition, Advantages, and DisadvantagesFinancial Leverage Definition, Advantages, and Disadvantages
Financial Leverage Definition, Advantages, and Disadvantages
 
magnetic-pensions-a-new-blueprint-for-the-dc-landscape.pdf
magnetic-pensions-a-new-blueprint-for-the-dc-landscape.pdfmagnetic-pensions-a-new-blueprint-for-the-dc-landscape.pdf
magnetic-pensions-a-new-blueprint-for-the-dc-landscape.pdf
 
Vip B Aizawl Call Girls #9907093804 Contact Number Escorts Service Aizawl
Vip B Aizawl Call Girls #9907093804 Contact Number Escorts Service AizawlVip B Aizawl Call Girls #9907093804 Contact Number Escorts Service Aizawl
Vip B Aizawl Call Girls #9907093804 Contact Number Escorts Service Aizawl
 
Bladex 1Q24 Earning Results Presentation
Bladex 1Q24 Earning Results PresentationBladex 1Q24 Earning Results Presentation
Bladex 1Q24 Earning Results Presentation
 
VIP Call Girls LB Nagar ( Hyderabad ) Phone 8250192130 | ₹5k To 25k With Room...
VIP Call Girls LB Nagar ( Hyderabad ) Phone 8250192130 | ₹5k To 25k With Room...VIP Call Girls LB Nagar ( Hyderabad ) Phone 8250192130 | ₹5k To 25k With Room...
VIP Call Girls LB Nagar ( Hyderabad ) Phone 8250192130 | ₹5k To 25k With Room...
 
Unveiling the Top Chartered Accountants in India and Their Staggering Net Worth
Unveiling the Top Chartered Accountants in India and Their Staggering Net WorthUnveiling the Top Chartered Accountants in India and Their Staggering Net Worth
Unveiling the Top Chartered Accountants in India and Their Staggering Net Worth
 
Interimreport1 January–31 March2024 Elo Mutual Pension Insurance Company
Interimreport1 January–31 March2024 Elo Mutual Pension Insurance CompanyInterimreport1 January–31 March2024 Elo Mutual Pension Insurance Company
Interimreport1 January–31 March2024 Elo Mutual Pension Insurance Company
 
Stock Market Brief Deck for 4/24/24 .pdf
Stock Market Brief Deck for 4/24/24 .pdfStock Market Brief Deck for 4/24/24 .pdf
Stock Market Brief Deck for 4/24/24 .pdf
 
call girls in Nand Nagri (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
call girls in Nand Nagri (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️call girls in Nand Nagri (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
call girls in Nand Nagri (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
 
Bladex Earnings Call Presentation 1Q2024
Bladex Earnings Call Presentation 1Q2024Bladex Earnings Call Presentation 1Q2024
Bladex Earnings Call Presentation 1Q2024
 
Lundin Gold April 2024 Corporate Presentation v4.pdf
Lundin Gold April 2024 Corporate Presentation v4.pdfLundin Gold April 2024 Corporate Presentation v4.pdf
Lundin Gold April 2024 Corporate Presentation v4.pdf
 
Financial institutions facilitate financing, economic transactions, issue fun...
Financial institutions facilitate financing, economic transactions, issue fun...Financial institutions facilitate financing, economic transactions, issue fun...
Financial institutions facilitate financing, economic transactions, issue fun...
 
Commercial Bank Economic Capsule - April 2024
Commercial Bank Economic Capsule - April 2024Commercial Bank Economic Capsule - April 2024
Commercial Bank Economic Capsule - April 2024
 
Call Girls Service Nagpur Maya Call 7001035870 Meet With Nagpur Escorts
Call Girls Service Nagpur Maya Call 7001035870 Meet With Nagpur EscortsCall Girls Service Nagpur Maya Call 7001035870 Meet With Nagpur Escorts
Call Girls Service Nagpur Maya Call 7001035870 Meet With Nagpur Escorts
 

AAFP_3Q 2022.pdf

  • 1. Asset Allocation & Financial Planning 3Q 2022 Update As of July 1, 2022 www.arrowrootfamilyoffice.com
  • 2. 3Q 2022 Please see disclosures at end of presentation 2 Table of Content Market History Historical Asset Class Returns 4 Annual Asset Class Performance 5 Quarterly Asset Class Performance 6 Bull & Bear Markets 7 Average Returns Prior To & Following Equity Market Peaks 8 Historic Market Events 9 Volatility Index 10 History of Market Drawdowns by Year 11 Asset Allocation 20 Years of Asset Allocation Statistics 13 Asset Class Return Ranges 14 Asset Class Risk vs Reward 15 Asset Class Correlations 16 Inflation’s Impact 17 Important Investing Lessons Importance of Diversification 19 Time, Not Timing, is What Matters 20 Staying Invested for the Long Term 21 Impact of Various Withdrawal Rates 22 The Cycle of Market Emotions 23 Robert Santos CEO Mark McCarron Partner, Managing Director Diane Young Partner, Managing Director Cassandra Barry Partner, Managing Director Mike Knittel Partner, Portfolio Manager Ben Porras Managing Director Daniel Casey Vice President
  • 3. Market History Performance, Major Events, Drawdowns 3Q 2022
  • 4. 3Q 2022 Market Category 2Q 2022 6 Months 1 Year 3 Year 5 Year 10 Year U.S. Large Cap Stocks -16.1% -20.0% -10.5% 10.6% 11.2% 12.9% U.S. Large Cap Growth Stocks -21.1% -28.2% -18.8% 12.4% 14.1% 14.6% U.S. Large Cap Value Stocks -12.3% -12.9% -6.8% 6.7% 7.0% 10.3% U.S. Small Cap Stocks -17.3% -23.5% -25.2% 4.1% 5.1% 9.3% Global Stocks -15.1% -19.9% -15.2% 6.3% 7.2% 8.9% Developed Market Stocks -13.1% -18.7% -17.0% 1.3% 2.2% 5.4% Emerging Market Stocks -10.4% -17.2% -25.3% -0.1% 1.6% 2.3% U.S. Taxable Bonds -4.6% -10.1% -10.1% -0.9% 0.8% 1.5% U.S. Municipal Bonds -2.5% -7.8% -7.5% 0.0% 1.5% 2.1% U.S. High Yield Bonds -9.4% -13.6% -12.4% -1.0% 1.2% 3.2% REITs -15.4% -20.5% -7.7% 4.8% 5.7% 7.5% Commodities 2.2% 28.2% 38.4% 19.8% 13.7% 0.6% Please see disclosures at end of presentation 4 Historical Asset Class Returns Disclosures: All performance data represents total returns. Performance longer than 1 year are annualized. Past performance is no guarantee of future results. Asset classes are represented by the following ETFs: U.S. Large Cap (SPY - SPDR S&P 500 ETF), U.S. Large Cap Growth (IWD – Russell 1000 Growth ETF), U.S. Large Cap Value (IWF – Russell 1000 Value ETF), U.S. Small Cap (IWM - iShares Russell 2000 ETF), Global Stocks (ACWI - iShares MSCI ACWI ETF), DM Stocks (EFA - iShares MSCI EAFE ETF), EM Stocks (EEM - iShares MSCI Emerging ETF), U.S. Taxable Bonds (AGG - iShares Core U.S. Aggregate Bond ETF), U.S. Municipal Bonds (MUB - iShares National Muni Bond ETF), U.S. High Yield Bonds (HYG - iShares iBoxx $ High Yield Corporate ETF), Commodities (DBC - Invesco DB Commodity ETF), and REITs (VNQ - Vanguard Real Estate ETF).
  • 5. 3Q 2022 69% EM 21% SM 37% EM 31% LG 28% SM 28% RE 19% EM 19% CM 25% DM 29% RE 28% RE 27% SM 18% DM 13% HY 22% LG 25% SM 20% SM 27% HY 16% EM 17% RE 12% LG 14% SM 22% DM 18% LG 41% CM 26% DM 15% LG 17% SM 38% SM 30% RE 11% EM 14% AA 19% AA 17% EM 40% RE 26% LG 13% AA 16% LG 32% LG 13% LG 8% RE 6% HY 18% EM 10% AA 29% LG 21% AA 12% CM 8% RE 12% AA 21% DM 6% AGG 8% AA 5% CM 14% HY 7% AGG 15% SM 16% CM 11% HY 8% AGG 11% HY 14% AA 5% SM 2% RE 2% AGG 5% RE 12% CM 7% DM 14% AA 8% AGG 3% AGG 8% DM 6% HY 4% AGG 6% HY 4% AA 1% LG 1% DM 4% AGG 2% CS 8% AGG 4% HY 11% DM 28% CM 2% CS 0% CS 6% AGG 2% LG 4% CM 2% RE 2% HY 0% AGG 0% CS 1% CS 0% AGG 2% CS 0% CS 4% HY 0% CS 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 YTD -17% HY 0% CS 0% CS 0% CS 0% CS 0% CS 0% CS -2% HY -5% RE 0% CS -10% AGG -23% AA 0% AA -2% AGG -4% EM -1% DM -4% LG -8% CM -2% AGG -14% HY -32% CM -3% CM -4% EM -6% DM -2% AA -6% AA -4% EM -14% AA -34% SM -4% SM -8% CM -28% CM -4% SM -6% RE -17% EM -36% RE -12% DM -5% HY -11% SM -19% DM -36% LG -19% EM -16% EM -12% CM -20% LG -40% DM -28% CM -14% DM -20% RE -48% EM -15% EM -23% SM Please see disclosures at end of presentation 5 Annual Asset Class Performance Emerging Market Equity (EM) Developed Market Equity (DM) U.S. Large Caps (LG) U.S. Small Caps (SM) High Yield (HY) Bonds (AGG) Cash (CS) REITs (RE) Commodities (CM) 60/35/5 Allocation (AA) Disclosures: All performance data represents total returns for the stated period. Past performance is no guarantee of future results. Asset classes are represented by the following ETFs: EM Equity (EEM - iShares MSCI Emerging Markets ETF), Commodities (DBC - Invesco DB Commodity Index Tracking ETF), DM Equity (EFA - iShares MSCI EAFE ETF), REITs (VNQ - Vanguard Real Estate ETF), Large Caps (SPY - SPDR S&P 500 ETF), Small Caps (IWM - iShares Russell 2000 ETF), High Yield (HYG - iShares iBoxx $ High Yield Corporate Bond ETF), Cash (BIL - SPDR Bloomberg Barclays 1-3 Month T-Bill ETF), Bonds (AGG - iShares Core U.S. Aggregate Bond ETF). The "60/35/5" portfolio is for illustrative purposes only and assumes the following weights: 25% Large Caps, 15% Developed Markets, 10% Small Caps, 5% Emerging Markets, 5% REITs, 25% Bonds, 5% High Yield, 5% Commodities, and 5% Cash.
  • 6. 3Q 2022 Please see disclosures at end of presentation 6 Quarterly Asset Class Performance Disclosures: All performance data represents total returns for the stated period. Past performance is no guarantee of future results. Asset classes are represented by the following ETFs: EM Equity (EEM - iShares MSCI Emerging Markets ETF), Commodities (DBC - Invesco DB Commodity Index Tracking ETF), DM Equity (EFA - iShares MSCI EAFE ETF), REITs (VNQ - Vanguard Real Estate ETF), Large Caps (SPY - SPDR S&P 500 ETF), Small Caps (IWM - iShares Russell 2000 ETF), High Yield (HYG - iShares iBoxx $ High Yield Corporate Bond ETF), Cash (BIL - SPDR Bloomberg Barclays 1-3 Month T-Bill ETF), Bonds (AGG - iShares Core U.S. Aggregate Bond ETF). The "60/35/5" portfolio is for illustrative purposes only and assumes the following weights: 25% Large Caps, 15% Developed Markets, 10% Small Caps, 5% Emerging Markets, 5% REITs, 25% Bonds, 5% High Yield, 5% Commodities, and 5% Cash. 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 YTD 1 Year REITs 7.5% EM Equity 12.1% Bonds 3.1% Small Caps 25.5% EM Equity 10.3% Small Caps 31.3% Comdty 13.0% Comdty 15.9% Comdty 4.8% REITs 15.0% Comdty 25.4% Comdty 2.2% Comdty 28.2% Comdty 38.4% Bonds 2.3% Small Caps 9.9% Cash 0.4% Large Caps 20.2% Large Caps 9.0% EM Equity 18.4% Small Caps 12.9% REITs 11.6% REITs 0.6% Large Caps 11.1% Cash 0.0% Cash 0.1% Cash 0.1% Cash 0.1% Large Caps 1.8% Large Caps 9.0% High Yield -11.5% EM Equity 17.8% Comdty 6.1% DM Equity 15.7% REITs 8.8% Large Caps 8.4% Large Caps 0.6% 60/35/5 4.2% 60/35/5 -4.0% Bonds -4.6% Bonds -10.1% REITs -7.7% High Yield 1.3% Comdty 7.7% 60/35/5 -15.0% DM Equity 15.5% Small Caps 5.0% Comdty 12.6% Large Caps 6.3% DM Equity 5.4% High Yield 0.3% Comdty 3.0% Large Caps -4.6% High Yield -9.4% High Yield -13.6% Bonds -10.1% 60/35/5 0.7% DM Equity 7.7% Large Caps -19.5% REITs 13.5% 60/35/5 4.6% Large Caps 12.1% DM Equity 4.0% 60/35/5 5.4% Bonds 0.0% DM Equity 2.8% High Yield -4.7% EM Equity -10.4% 60/35/5 -13.8% Large Caps -10.5% Cash 0.5% 60/35/5 5.6% DM Equity -23.0% 60/35/5 13.1% DM Equity 4.6% 60/35/5 11.0% 60/35/5 3.9% Small Caps 4.0% Cash 0.0% Small Caps 2.0% Bonds -5.8% 60/35/5 -10.5% EM Equity -17.2% 60/35/5 -10.6% DM Equity -0.8% High Yield 2.5% EM Equity -23.9% Comdty 9.4% High Yield 4.0% REITs 9.3% EM Equity 3.2% EM Equity 3.8% 60/35/5 -0.6% High Yield 0.8% REITs -6.1% DM Equity -13.1% DM Equity -18.7% High Yield -12.4% Small Caps -2.3% REITs 0.5% REITs -24.0% High Yield 7.3% REITs 1.3% High Yield 5.7% High Yield 0.6% High Yield 2.0% DM Equity -1.1% Cash 0.0% DM Equity -6.5% REITs -15.4% Large Caps -20.0% DM Equity -17.0% Comdty -4.4% Cash 0.4% Comdty -29.5% Bonds 3.1% Bonds 0.4% Bonds 0.7% Cash 0.0% Bonds 1.8% Small Caps -4.3% Bonds -0.1% Small Caps -7.5% Large Caps -16.1% REITs -20.5% Small Caps -25.2% EM Equity -4.8% Bonds 0.1% Small Caps -30.7% Cash 0.0% Cash 0.0% Cash 0.0% Bonds -3.4% Cash 0.0% EM Equity -8.6% EM Equity -1.6% EM Equity -7.6% Small Caps -17.3% Small Caps -23.5% EM Equity -25.3%
  • 7. 3Q 2022 Please see disclosures at end of presentation 7 S&P 500 Bull & Bear Markets Disclosures: All performance data represents price returns of the S&P 500. Past performance is no guarantee of future results. Bear Markets are defined as a decline of at least 20% from the market's high point to its low.
  • 8. 3Q 2022 Please see disclosures at end of presentation 8 Average Returns Prior To & Following Equity Market Peaks Disclosures: All performance data represents price returns of the S&P 500. Past performance is no guarantee of future results. The analysis is based on 14 bull/bear market cycles since 1937. Bear Markets are defined as a decline of at least 20% from the market's high point to its low. 46% 21% 14% 8% -11% -12% -15% -8% -25% 0% 25% 50% 24 Months 12 Months 6 Months 3 Months 3 Months 6 Months 12 Months 24 Months Prior to Equity Market Peak Following Equity Market Peak Equity Market Performance Average return before peak Average return after peak Equity Market Peak
  • 9. 3Q 2022 Please see disclosures at end of presentation 9 Historic Market Events Disclosures: All performance data represents price returns of the S&P 500. Past performance is no guarantee of future results. U.S. Recession dates are based on National Bureau of Economic Research (NBER).
  • 10. 3Q 2022 Please see disclosures at end of presentation 10 Volatility Index Disclosures: Past performance is no guarantee of future results. All performance data represents price returns of the SPDR S&P 500 ETF Trust (SPY). The CBOE VIX measures the market's expectations of future volatility and is based on S&P 500 options activity. 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 2 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 3 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 4 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 6 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 7 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 1 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 2 0 2 2 Major S&P 500 Market Pullbacks 5 15 25 35 45 55 65 75 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Volatility Index June 2013 Fed Taper Tantrum Oct 2014 Ebola Outbreak / Fears of Slowdown Aug 2015 China, Fed Policy Uncertainty Feb 2016 China, Oil Prices, U.S. Recession Fears Feb 2018 Tech selloff, Trade / Inflation Fears Dec 2018 Rising Rates, Global Trade March 2020 COVID-19, Oil collapse YTD 2022 Rising Interest Rates and Inflation Pressures
  • 11. 3Q 2022 Please see disclosures at end of presentation 11 History of Market Drawdowns by Year Disclosures: Past performance is no guarantee of future results. For illustrative purposes only. All performance data represents price returns and does not include dividends for the stated period. Drawdown is calculated from the intra-year peak to trough levels. Analysis is based on the State Street SPDR S&P 500 ETF (SPY). 2 12 27 -7 26 4 7 -2 34 20 31 27 20 -10 -13 -23 26 9 3 14 4 -38 23 13 0 13 30 11 -1 10 19 -6 29 16 27 -21 -34 -8 -8 -20 -6 -6 -5 -9 -3 -8 -11 -19 -12 -17 -30 -34 -14 -8 -7 -8 -10 -49 -28 -16 -19 -10 -6 -7 -12 -11 -3 -20 -7 -34 -5 -24 -60 -50 -40 -30 -20 -10 0 10 20 30 40 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Annual Return Drawdown Average Return Average Drawdown
  • 12. Asset Allocation Statistics, Risk vs Reward, Asset Class Correlations 3Q 2022
  • 13. 3Q 2022 Please see disclosures at end of presentation 13 Asset Class Return Ranges Over 20 Years Disclosures: Past performance is no guarantee of future results. Performance data represents total returns for a 12-month period matching the description over the last 20 years. Note: Commodity and High Yield Bond ETF price data is only available since 2006. REITs ETF price data is only available since 2004. Asset classes are represented by the following ETFs: Emerging Markets (EEM - iShares MSCI Emerging Markets ETF), Commodities (DBC - Invesco DB Commodity ETF), Developed Markets (EFA - iShares MSCI EAFE ETF), REITs (VNQ - Vanguard Real Estate ETF), U.S. Large Caps (SPY - SPDR S&P 500 ETF), U.S. Small Caps (IWM - iShares Russell 2000 ETF), High Yield (HYG - iShares iBoxx $ High Yield Corporate Bond ETF), Cash (BIL - SPDR Bloomberg Barclays 1-3 Month T-Bill ETF), Bond Aggregate (AGG - iShares Core U.S. Aggregate Bond ETF). -42% -43% -53% -56% -49% -28% -10% -49% 0% 95% 56% 86% 109% 58% 42% 14% 77% 3% 12% 12% 11% 11% 9% 5% 4% 3% 1% -100% -50% 0% 50% 100% U.S. Small Caps U.S. Large Caps Emerging Markets REITs DevelopedMarkets High Yield Bond Aggregate Commodities Cash Lowest 1 Year Total Return Highest 1 Year Total Return Average 1 Year Total Return
  • 14. 3Q 2022 Please see disclosures at end of presentation 14 Asset Class Risk vs Reward Disclosures: Past performance is no guarantee of future results. Annual Standard Deviation and the Annualized Return use monthly data from the past 10 years. Annualized returns are based on dividends reinvested. Asset classes are represented by the following ETFs: Cash (BIL - SPDR Bloomberg Barclays 1-3 Month T-Bill ETF), Bond Aggregate (AGG - iShares Core U.S. Aggregate Bond ETF), Investment Grade (LQD - iShares iBoxx $ Investment Grade Corporate Bond ETF), High Yield (HYG - iShares iBoxx $ High Yield Corporate Bond ETF), Large Caps (SPY - SPDR S&P 500 ETF), Small Caps (IWM - iShares Russell 2000 ETF), Mid Caps (MDY - SPDR S&P Midcap 400 ETF), REITs (VNQ - Vanguard Real Estate ETF), Emerging Markets (EEM - iShares MSCI Emerging Markets ETF), Developed Market (EFA - iShares MSCI EAFE ETF). Cash Bond Aggregate Investment Grade Bonds High Yield Bonds Large Caps Small Caps Mid Caps REITs Emerging Markets Developed Markets 0% 5% 10% 15% 20% 0% 5% 10% 15% 20% Annual Standard Deviation Annualized Return ↑ Higher Volatility Higher Return →
  • 15. 3Q 2022 U.S. Large Caps U.S. Small Caps Developed Markets Emerging Markets Bond Aggregate High Yield U.S. Dollar Comdty U.S. Growth U.S. Value REITs Gold U.S. Large Caps 1.00 0.87 0.85 0.68 0.14 0.76 -0.34 0.42 0.96 0.95 0.67 0.05 U.S. Small Caps 1.00 0.77 0.64 0.04 0.71 -0.27 0.45 0.80 0.89 0.61 -0.03 Developed Markets 1.00 0.80 0.16 0.77 -0.51 0.50 0.79 0.85 0.60 0.07 Emerging Markets 1.00 0.21 0.69 -0.58 0.46 0.63 0.68 0.47 0.21 Bond Aggregate 1.00 0.39 -0.22 -0.22 0.25 0.02 0.41 0.39 High Yield 1.00 -0.40 0.47 0.70 0.77 0.63 0.26 U.S. Dollar 1.00 -0.38 -0.34 -0.32 -0.14 -0.38 Commodities 1.00 0.33 0.50 0.22 0.17 U.S. Growth 1.00 0.82 0.63 0.10 U.S. Value 1.00 0.67 0.01 REITs 1.00 0.14 Gold 1.00 Please see disclosures at end of presentation 15 Asset Class Correlations Disclosures: Past performance is no guarantee of future results. Correlations are based on 10 years of monthly total returns. Asset Classes are represented by the following ETFS: U.S. Large Caps (SPY - SPDR S&P 500 ETF), U.S. Small Caps (IWM - iShares Russell 2000 ETF), Developed Markets (EFA - iShares MSCI EAFE ETF), Emerging Markets (EEM - iShares MSCI Emerging Markets ETF), Bonds (AGG - iShares Core U.S. Aggregate Bond ETF), High Yield (HYG - iShares iBoxx $ High Yield Corporate Bond ETF), Municipal Bonds (MUB - iShares National Muni Bond ETF), USD Index (United States Dollar Index), Emerging Market Sovereign Debt (LEMB - iShares J.P. Morgan EM Local Currency Bond ETF), Commodities (DBC - Invesco DB Commodity ETF), REITs (VNQ - Vanguard Real Estate ETF), Gold (GLD - SPDR Gold ETF).
  • 16. 3Q 2022 Please see disclosures at end of presentation 16 Inflation’s Impact Inflation’s Impact on Your Purchasing Power Assumes constant annual inflation rates Price Increases Based on Inflation Assumes constant annual inflation rates $92,237 $83,375 $75,364 $68,123 $61,578 $84,935 $69,253 $56,467 $46,042 $37,541 $0 $25,000 $50,000 $75,000 $100,000 Year 1 5 10 15 20 25 2% Annual Inflation 4% Annual Inflation $108,243 $119,509 $131,948 $145,681 $160,844 $116,986 $142,331 $173,168 $210,685 $256,330 $0 $100,000 $200,000 $300,000 Year 1 5 10 15 20 25 2% Annual Inflation 4% Annual Inflation Disclosures: Past performance is no guarantee of future results. Investing involves risks, including possible loss of principal. Hypothetical illustrative examples for educational purposes only. Assumes constant annual inflation rate.
  • 17. Important Investing Lessons Diversification, Market Timing, Withdrawing Capital 3Q 2022
  • 18. 3Q 2022 Please see disclosures at end of presentation 18 Importance of Diversification Disclosures: Past performance is no guarantee of future results. Performance is for illustrative purposes only. Diversification does not guarantee a profit or protect against a loss in a declining market. Diversified Portfolio is represented by 40% Large Caps (SPY - SPDR S&P 500 ETF), 10% Developed Markets (EFA - iShares MSCI EAFE ETF), 5% Small Caps (IWM – iShares Russell 2000 ETF), 30% Bonds (AGG – iShares U.S. Aggregate Bond ETF), 10% High Yield (HYG - U.S. Corporate High Yield Bond ETF), and 5% Emerging Markets (EEM - iShares MSCI Emerging Markets ETF). Standard deviation is a measure of the amount of variation of each portfolio. Bonds, $115,804 Large Caps, $334,920 Small Caps, $243,755 Intl. Stocks, $158,080 High Yield, $136,470 Diversified Portfolio, $216,268 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Growth of $100k Over Last 10 Years 5.3% 3.9% 3.9% 2.6% 2.0% 1.0% Small Caps Large Caps Intl. Stocks Diversified Portfolio High Yield Bonds A well-diversified portfolio aims to minimize volatility while providing more steady returns
  • 19. 3Q 2022 Please see disclosures at end of presentation 19 Time, Not Timing, is What Matters Disclosures: Past performance is no guarantee of future results. The analysis is based on 20 years of daily price return data. The portfolio value is represented by the State Street SPDR S&P 500 ETF (SPY), which represents an index of large cap stocks. The analysis does not include the impact of taxes or capital gains. $564,727 $347,972 $255,533 $195,025 $153,912 $123,802 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 Stayed Invested Everyday Over Last 20 Years Missed 5 Best Days Missed 10 Best Days Missed 15 Best Days Missed 20 Best Days Missed 25 Best Days Portfolio Value Starting with $100k 20 Years Ago -10 -5 0 5 10 Jan 2020 Apr 2020 Jul 2020 Oct 2020 S&P 500 Daily Returns (%) As shown during 2020, the best days in the market often came after the worst days.
  • 20. 3Q 2022 Please see disclosures at end of presentation 20 Staying Invested for the Long Term Range of Annualized Returns for Rolling 1-, 3-, 5-, 10-Year Periods Based on 50 Stock / 50 Bond Portfolio’s Rolling Annual Returns Over Last 30 Years % of Time a 50 Stock / 50 Bond Portfolio was Positive / Negative Based on Various Holding Periods Using Monthly Data From the Last 30 Years Disclosures: Past performance is no guarantee of future results. The analysis is based on the last 30 years of total return data. Returns are represented by a 50/50 allocation to equities (State Street S&P 500 ETF - SPY) and bonds (Bloomberg Bond Aggregate Index). -14% -1% 2% 3% 23% 20% 17% 14% -30% -15% 0% 15% 30% 1 Year 3 Year 5 Year 10 Year Range of Annual Returns 69% 31% % of Time You MadeMoney (Positive Return) % of Time You Lost Money (Negative Return) 87% 13% 100% 100% 1 Month 1 Year 10 Years 15 Years Holding Periods
  • 21. 3Q 2022 Please see disclosures at end of presentation 21 Impact of Various Withdrawal Rates Disclosures: Past performance is no guarantee of future results. This is a hypothetical illustration for educational purposes only and assumes a hypothetical initial portfolio balance of $500,000 as of January 1st, 2000. The analysis looks at the impact on the portfolio based on various amounts withdrawn monthly from the portfolio throughout several market cycles. Each monthly withdrawal is adjusted annually for inflation (measured by the consumer price index) and the portfolio is rebalanced at the end of the month. This hypothetical portfolio is made up of 50% stocks represented by the State Street SPDR S&P 500 ETF (SPY) and 50% bonds represented by the Bloomberg Barclays U.S. Aggregate Bond ETF (AGG). The longevity of a portfolio can be based on the following factors: withdrawal rate, asset class mix, diversification, capital gains, fund expenses, and life expectancy. Performance is based on total returns including dividends reinvested. $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 2000 2005 2010 2015 2020 Age 65 Age 70 Age 75 Age 80 Age 85 Portfolio Value Starting with $500k 4% 5% 6% 7% 8% Withdrawal Rates A lower withdrawal rate, such as 3-5%, can increase the longevity of a portfolio’s life.
  • 22. 3Q 2022 Encouraged Excitement Confident Euphoric Nervous Fear Panic Encouraged Optimism Please see disclosures at end of presentation 22 The Cycle of Market Emotions Disclosures: Strictly for illustrative and educational purposes only. This analysis is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Point of Maximum Potential Risk Investors Tend to Buy High Point of Maximum Potential Opportunity Investors Tend to Sell Low
  • 23. 3Q 2022 Please see disclosures at end of presentation 23 Definitions Annualized Return The rate at which an investment grows each year over the period to arrive at the final valuation. Bear Market A decline of at least 20% from the market's high point to its low. Beta A measure of how an individual asset moves when the overall stock market increases or decreases. Correlation A measure of the extent to which two variables are related Dividend Yield: The dividend yield or dividend-price ratio of a share is the dividend per share, divided by the price per share. It is also a company's total annual dividend payments divided by its market capitalization, assuming the number of shares is constant. Developed Markets A country that is most developed in terms of its economy and capital markets. The country must be high income, but this also includes openness to foreign ownership, ease of capital movement, and efficiency of market institutions. Emerging Markets A country that has some characteristics of a developed market but does not fully meet its standards. This includes markets that may become developed markets in the future or were in the past Large Cap Stocks Shares of publicly traded corporations with a market capitalization of $10 billion or more LTM An acronym for "Last Twelve Months" or the past one year NTM An acronym for "Next Twelve Months" or the next one year Price Return The rate of return on an investment portfolio, where the return measure takes into account only the capital appreciation of the portfolio, not including income generated in the form of interest or dividends. Total Return Return on a portfolio of investments including capital appreciation and income received on the portfolio. Small Cap Stocks Shares of publicly traded corporations with a market capitalization of $2 billion or less. Standard Deviation In statistics, the standard deviation is a measure of the amount of variation or dispersion of a set of values. A low standard deviation indicates the values tend to be close to the historical average of the data set, while a high standard deviation indicates the current value is outside of the historical average range. CBOE Volatility Index (VIX) Measures the market's expectations of future volatility and is based on S&P 500 options activity.
  • 24. 3Q 2022 Please see disclosures at end of presentation 24 Disclosures and Legal Notice § Investing involves risk, including the possible loss of principal. Stock markets can be volatile. Investments in securities of small and medium capitalization companies may involve greater risk of loss and more abrupt fluctuations in market price than investments in larger companies. Investments in fixed-income instruments are subject to the possibility that interest rates could rise, causing their values to decline. High yield and unrated debt securities are at a greater risk of default than investment grade bonds and may be less liquid, which may increase volatility. Investors in asset-backed securities, including mortgage-backed securities and collateralized loan obligations (“CLOs”), generally receive payments that are part interest and part return of principal. These payments may vary based on the rate loans are repaid. Some asset-backed securities may have structures that make their reaction to interest rates and other factors difficult to predict, making their prices volatile and they are subject to liquidity and valuation risk. CLOs bear similar risks to investing in loans directly, such as credit, interest rate, counterparty, prepayment, liquidity, and valuation risks. Loans are often below investment grade, may be unrated, and typically offer a fixed or floating interest rate. § This material is distributed or presented for informational or educational purposes only and should not be considered a recommendation of any particular security, strategy or investment product, or as investing advice of any kind. This material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment decisions, and does not constitute a solicitation of an offer to buy or sell securities. The content contained herein is not intended to be and should not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation. § This material contains opinions of the author, but not necessarily those of Arrowroot Family Office LLC or its subsidiaries. The opinions contained herein are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. No part of this material may be reproduced or referred to in any form, without express written permission of Arrowroot Family Office, LLC. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. Past performance is not indicative of future results..