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What is Adaptive Asset Allocation™ (AAA)?

Unlike traditional asset allocation strategies, Adaptive Asset Allocation™ does NOT follow a preset formula. Instead, AAA seeks to have your portfolio consistently invested according to how the market and economy are performing, i.e., your funds are always best positioned to work WITH, not AGAINST, the market’s prevailing direction. An essential part of an AAA approach is that your current allocations are reviewed much more frequently—10-11 times per year versus the 1-4 times for a traditional approach—so that you are paying much more attention to ensuring the alignment of your investment choices with the market direction. As it becomes evident that an upward moving market has leveled off and started to decline, an AAA strategy would begin to shift money out of stock funds and into bond funds. During a sustained down market, there will come a point where an AAA model has moved ALL investments into bond funds, thereby protecting the portfolio against sustained loss—losses that could take years to recover from. Similarly, at the conclusion of a down market, the reverse happens. AAA strategy gradually begins to shift money back into stock funds and out of bond funds. There will come a point when the AAA strategy has moved ALL your money into stock funds, thereby maximizing the portfolio’s gain opportunity.