About our allocations
Our investment methodology consists of maximizing the expected return while not exceeding a fixed maximum risk. Each of our newsletters makes two recommendations — one called the Conservative allocation, the other called the Balanced allocation. These allocations are determined the same way, with the only exception is that their fixed maximum risk is different.
The maximum allowable risk of the Conservative allocation is lower than it is for the Balanced allocation. In other words, according to our calculations, the Conservative allocation is safer. On the other hand, because the Balanced allocation allows for a higher risk, it also has a higher expected return.
From among the two allocations that we offer, you should pick and follow the allocation that's right for you. You can do this by understanding the difference between the allocations, as explained above, and examining their historical performance.
By the way, we do not provide an "Aggressive" allocation because we do not believe in being reckless with one's savings.