Market volatility is part of investing in stocks. But how often does the market turn down? What is the long term impact? For buy-and-hold investors, it is important to have some perspective on the vulnerabilities and resiliency of the stock market.

1. Bull and Bear
Bull and Bear
Markets
© 2015 Asset Dedication, LLC All Rights Reserved

2. What Investors Should Know
About Investing In The Stock Market
1. The stock market is volatile
For the S&P 500®, the average annualized return has been 10.1%, but returns have ranged from -43.3% to
54.0%.
2. Expect losses
The S&P 500 experiences negative returns in about 1 out of every 4 years (27%). Losses are very common and
to be expected for investors looking to take advantage of higher long term expected returns.
3. Stocks are a long term investment
The stock market is extremely volatile on an annual basis and the chances of seeing a loss over any 1 year
horizon are fairly likely (27%). However, as an investor’s time horizon extends to 2 years, the chances of the
S&P 500 being at a loss falls to 18.2%. At 10 years, the chances of the S&P 500 still experiencing a loss falls to
5%. And to date, at 20 years, there have never been any periods that have experienced a loss.
4. The stock market is resilient
Even for Bear Markets where peak to trough losses have averaged losses of -29.7%, it has taken only 3.3 years
on average for the market to surpass its previous high.
5. Timing the market is folly
There is substantial academic and empirical evidence to suggest that trying to time the market to miss losses
while capturing gains leads to underperformance.1
1 Determinants of Portfolio Performance by Brinson, Hood and Beebower, 1986 and the S&P Index Versus Active (SPIVA) studies are a few of the leading
resources on active management and market timing.
The S&P 500 is a trademark of Standard & Poor's Index Services Group. The S&P 500 Index includes 500 of the top companies in leading industries in the
U.S. economy. Focusing on the large-cap segment of the market, the S&P 500 covers approximately 80% of available U.S. market cap.
Time and diversification neither assure a profit nor guarantee against loss in a declining market.
See Data Disclosures.

3. Expect Stock Market Volatility
The stock market is particularly noisy. Unlike bonds, which are considered to be safer, more predictable investments,
stocks are often subject to significant price volatility both on the upside and on the downside. The chart below shows
that although the stock market goes up more than it goes down, investors should expect losses more than a quarter of
the time. The green dotted line shows the average annualized return of 10.1% for the S&P 500®, excluding fees, from
1926 to 2014, yet the actual annual returns are very rarely close to the average.
Time and diversification neither assure a profit nor guarantee against loss in a declining market. The data on this page illustrates the volatility of annual
returns for the S&P 500 from 1926 to 2014 exclusive of fees, trading costs and taxes.
See Data Disclosures. Data as of June 30, 2015

4. Market Losses Are Common
The chart below shows distribution of annual returns for the S&P 500 from 1926 to 2014. Annual returns are grouped
in broad segments of 5%. The red bars indicate returns of 0% and below. Yellow bars reflect positive returns. The
blue line shows the cumulative occurrence at each return segment. Based on the historical data, investors should
expect losses more than a quarter of the time, with a cumulative frequency of 27.0% for returns below 0%.
Sometimes, the annual losses are significant. The largest annual loss occurred in 1931 at -43.3% followed by 2008
with a loss of -37.0%. To date, there have been 11 years with losses greater than -10% (sometimes the market goes
down over multiple years that can lead to greater cumulative losses). On the other hand, there have been 24 years
where returns were greater than 25%, which have helped the market bounce back from down years.
Time and diversification neither assure a profit nor guarantee against loss in a declining market. The data on this page illustrates annual returns for the S&P
500 from 1926 through 2014 exclusive of fees, trading costs and taxes.
See Data Disclosures. Data as of June 30, 2015

5. Time On Your Side
On an annual basis, the probability of the S&P 500 experiencing losses is about 1 in 4 (27%). As an investor’s time
horizon extends beyond 1 year, the chances that the S&P 500 will deliver losses decrease. Based on the historical
record of annual returns from 1926 to 2014, the longest horizon with losses has been 14 years, which occurred during
the Great Depression (1929 to 1942). As an investor’s time horizon extends, the chances of experiencing losses
declines substantially. This does not mean that the market could not have longer periods of losses in the future,
however, the probability is very low. The green tick marks indicate the probability of the S&P 500 delivering
annualized returns above 7%. Again, time improves the chances of receiving the target returns.
Time and diversification neither assure a profit nor guarantee against loss in a declining market. The data on this page illustrates the probability of the S&P
500 experiencing losses at rolling horizons of 1 to 20 years exclusive of fees, trading costs and taxes.
See Data Disclosures. Data as of June 30, 2015

6. Stock Market Resiliency
The stock market routinely experiences Bear Markets, where the market declines significantly from its peak. Going
back to 1925, the S&P 500® has experienced 14 Bear Markets where the decline was greater than 10%. The
average decline from the market peak has been -29.7%.
On average it has taken 3.3 years from the start of a Bear Market for investors to get back to the previous high.
During the Great Depression, the losses were much greater and it took 15.3 years for an investor to get back to even.
Once the market recovered, the average Bull Market lasted 3 years.
Time and diversification neither assure a profit nor guarantee against loss in a declining market. The data on this page illustrates the bull and bear market
cycles for the S&P 500 from January of 1925 through June of 2015 exclusive of fees, trading costs, and taxes.
See Data Disclosures. Data as of June 30, 2015
Bull Market
Start
Bull Market
(Years)
Bear Market
(Peak to Trough)
Peak to Trough
(Years)
Peak to Trough
Decline
Peak to Recovery
(Years)
January 1925 4.7 September 1929 to June 1932 2.8 -83.4% 15.3
January 1945 1.4 June 1946 to November 1946 0.5 -21.8% 3.3
October 1949 6.8 August 1956 to December 1957 1.4 -15.0% 1.9
July 1958 3.5 January 1962 to June 1962 0.5 -22.3% 1.3
April 1963 2.8 February 1966 to September 1966 0.7 -15.6% 1.1
March 1967 1.8 December 1968 to June 1970 1.6 -29.2% 2.3
March 1971 1.8 January 1973 to September 1974 1.8 -42.6% 3.4
June 1976 0.6 January 1977 to February 1978 1.2 -14.1% 1.5
July 1978 2.4 December 1980 to July 1982 1.7 -16.9% 1.8
October 1982 4.9 September 1987 to November 1987 0.3 -29.5% 1.7
May 1989 1.1 June 1990 to October 1990 0.4 -14.7% 0.7
February 1991 7.3 May 1998 to August 1998 0.3 -15.4% 0.5
November 1998 1.4 April 2000 to September 2002 2.5 -44.7% 6.5
October 2006 1.1 November 2007 to February 2009 1.3 -51.1% 4.8
August 2012 2.9 TBD
Average 3.0 1.2 -29.7% 3.3

7. The Power of Markets to Recover
The chart below shows the general upward trend of the S&P 500 starting in 1925. This upward trend is riddled with
periods of decline. Market declines of more than 10% from the peak, are common. The red bars indicate Bear
Markets. The horizontal dotted lines show the previous market peak and the eventual recovery. Some Bear Markets
lasted only a few months while others have lasted several years. Once the market starts to recover from its bottom,
sometimes it takes only a few months to get back to the previous highs. Usually, it takes several years for the market
to recover. And in the case of the Crash of 1929, the market took more than a decade and a half to recover.
Time and diversification neither assure a profit nor guarantee against loss in a declining market. The data on this page illustrates the bull and bear market
cycles for the S&P 500 from January of 1925 through June of 2015 exclusive of fees, trading costs and taxes.
See Data Disclosures. Data as of June 30, 2015

8. Source: Determinants of Portfolio Performance; GP Brinson, LR Hood, GL Beebower; Financial Analysts Journal; July/August 1986; pp. 39-44
The performance attribution data set consists of 91 pension plans in the SEI Large Plan Universe over a 40 quarter period starting in 1974
10.11%
9.75%
9.44%
9.01%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
11.00%
Index/Passive Active Stock
Picking Only
Active Market
Timing Only
Active Market
Timing and Stock
Picking
The Cost of Active Management
-1.10%
-0.36%
-0.66%
The Failure of Active Management
An Academic Perspective
In 1986, Gary Brinson et al. wrote a foundational article on the impact of active management decisions on the
performance of 91 pension plans. Using a technique called an attribution study, the team was able to distill out the
impact that market timing and stock picking had on the investment returns of the plans. The allure of timing the market
to avoid downturns has long been a siren’s song for portfolio managers. Unfortunately, as seen in the table below,
active market timing lowers expected return by about .66%, on average, as compared to a simple buy and hold index
strategy.

9. RISK DISCLOSURES
The performance exhibits are generic and educational in nature, and do not pertain to your actual portfolio. The exhibits were designed to illustrate the
relationship between risk and return, and the uncertainty of stocks relative to bonds.
Market risk is the risk that the value of an investment will decrease due to moves in market factors. Securities of small companies are often less liquid than
those of large companies. As a result, small company stocks may fluctuate relatively more in price. Foreign securities prices may decline or fluctuate because
of: (a) economic or political actions of foreign governments, and/or (b) less regulated or liquid securities markets. Investors holding these securities are also
exposed to foreign currency risk (the possibility that foreign currency will fluctuate in value against the U.S. dollar).
Prices of fixed income securities tend to move n the opposite direction of interest rates. In general fixed income securities with longer maturities are more
sensitive to price changes. Credit risk is the risk that the issuer of a security may be unable to make interest payments and/or repay the principal when due.
Credit risk is greater for fixed income securities with ratings below investment grade.
ANALYSIS METHODOLOGY
Back-tested performance is provided for informational purposes only and does not represent actual performance. It is strictly hypothetical. Actual performance
may have been materially lower and future performance may be materially lower. Results also do not reflect actual trading and market factors that could have
impacted a client’s or Asset Dedication’s decision-making process.
No matter how positive historical audits have been over any time period, the potential for loss is always present due to factors which may not be accounted for in
the historical audit. The nature of a back-tested audit creates the potential for a financial professional to select superior performance results in order to get the
desired audit results.
The holdings based analysis “looks through” the mutual funds and examines the combined underlying securities of the funds in the portfolio, given the weights in
the allocation.
Appendix

10. INDEX DEFINITION
An index is list of stocks provided by an index provider that tracks a given segment of the investment universe s and serves as a benchmark against which
performance and characteristics are measured. Indices are not available for direct investment; its performance does not reflect the expenses associated with
the management of an actual portfolio.
RATINGS AGENCIES DEFINITION OF CREDIT RISK
Credit rating agencies Moody's Investors Service and Standard & Poor's Corporation rate the credit quality of debt issues from governments, corporations,
financial institutions, states, cities and municipalities. The ratings illustrated in this analysis reflect their independent opinions and assessment of the
creditworthiness of the issuer, and its ability to make timely payments of principal and interest. The rating agencies’ assessment of the creditworthiness of
the issuer may focus on the issuer's financial condition, credit history and other factors.
SHORT-TERM ISSUES/COMMERCIAL PAPER CREDIT RATINGS
Credit rating agencies Moody's Investors Service and Standard & Poor's Commercial Paper ratings apply to all senior/unsecured obligations with original
maturities not exceeding one year. The ratings illustrated in this analysis reflect their independent opinions and assessment of the issuer’s ability to repay its
short-term debt obligations.
DATA SOURCES AND DESCRIPTION
MSCI data copyright MSCI 2010, all rights reserved. The MSCI All Country World Index is a free float adjusted market capitalization index comprised of
developed and emerging markets countries designed to capture the characteristics of a global equity market portfolio. The MSCI World ex USA Index is a
free float adjusted market capitalization index comprised of developed countries designed to capture the characteristics of the developed equity markets
globally excluding the United States. The MSCI Emerging Markets Index is a free float adjusted market capitalization index comprised of emerging markets
countries designed to capture the characteristics of the emerging equity markets globally. The MSCI EAFE Small Cap Index is an equity index which
captures small cap representation across Developed Markets countries around the world, excluding the US and Canada. The MSCI Canada Small Cap Index
is designed to measure the performance of the small cap segment of the Canada market.
Center for Research in Security Prices (CRSP): CRSP data provided by the Center for Research in Security Prices, University of Chicago. Includes indices
of securities in each decile as well as other segments of NYSE securities (plus AMEX equivalents since July 1962 and NASDAQ equivalents since 1973).
Additionally, includes US Treasury constant maturity indices.
The S&P data are provided by Standard & Poor's Index Services Group. The S& P 500 is an index consisting of 500 stocks, which are weighted by market
value. Its performance is thought to be representative of the stock market as a whole and provides a broad snapshot of the overall U.S. equity market.
Russell data copyright © Russell Investment Group 1995-2010, all rights reserved. The Russell 1000 Value Index is comprised of the companies with lower
price to book and lower expected growth values from the 1,000 largest U.S. common stocks ranked by market capitalization. The Russell 2000 Index is
comprised of the 1,001 to 3,000 largest U.S. common stocks ranked by market capitalization.
Dow Jones data provided by Dow Jones Indexes. The Dow Jones U.S. Select REIT Index is a float adjusted market capitalization index consisting of publicly
traded U.S. real estate securities.
US bonds, bills, and inflation data © Stocks, Bonds, Bills, and Inflation Yearbook™, Ibbotson Associates, Chicago (annually updated work by Roger G.
Ibbotson and Rex A. Sinquefield).
Dimensional data available at www.dimensional.com.
Appendix

11. Asset Dedication, LLC is a portfolio engineering firm that partners exclusively with selected financial advisors to design dedicated investment
strategies customized to the individual needs of each person. Customization is the cornerstone of the Asset Dedication approach, creating
investment strategies unique to each person and each situation. Portfolios are built to client specifications to accurately determine how
much of a portfolio should be dedicated to supplying cash for the short run, providing income for the intermediate term, and generating
growth for the long term. The portfolio is then monitored using the Critical Path® system to make sure it stays on target.
Asset Dedication, LLC is a registered investment adviser located in San Francisco, CA. Asset Dedication and its representatives are in
compliance with the current filing requirements imposed upon registered investment advisers by those states in which Asset Dedication
maintains clients. Asset Dedication may only transact business in those states in which it is registered, or qualifies for an exemption or
exclusion from registration requirements. For information pertaining to the registration status of Asset Dedication, please contact the
Securities and Exchange Commission. A copy of Asset Dedication’s current written disclosure statement discussing Asset Dedication’s
business operations, services, and fees is available from Asset Dedication upon written request. Asset Dedication does not make any
representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any
unaffiliated third party advisor that recommends the services of Asset Dedication.
Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance
of any specific investment or investment strategy (including the investments and/or investment strategies recommended or undertaken by
Asset Dedication) made reference to directly or indirectly by Asset Dedication in its literature or otherwise will be profitable or equal the
corresponding indicated performance level(s). Different types of investments involve varying degrees of risk, and there can be no assurance
that any specific investment will either be suitable or profitable for a client or prospective client’s investment portfolio. Historical performance
results for investment indices and/or categories generally do not reflect the deduction of transaction and/or custodial charges, nor the impact
of taxes, the incurrence of which would have the effect of decreasing historical performance results.
Your advisor is not affiliated with Asset Dedication or Dimensional Fund Advisors. Asset Dedication and Dimensional Fund Advisors are not
affiliated with each other. Dimensional Fund Advisors is an investment advisor registered with the Securities and Exchange Commission.
Consider the investment objectives, risks, and charges and expenses of the Dimensional funds carefully before investing. For this and other
information about the Dimensional funds, please read the prospectus carefully before investing. Prospectuses are available by calling
Dimensional Fund Advisors collect at (310) 395‐8005 or at www.dimensional.com. Dimensional funds are distributed by DFA Securities LLC,
an affiliate of Dimensional Fund Advisors, 6300 Bee Cave Road, Building One, Austin, TX 78746.
Disclosures