Choosing investments

MOAAA© Examples

Here are examples of how the  “My Optimal Asset Allocation Analyzer” (MOAAA©) tool works for two hypothetical investors.

Example #1

Morgan is 25 years old, has $2000 in an IRA, and completed the questionnaire as follows:

 Question #  Answer  Score
 1  0-39  5
 2  40+  5
 3  Little problem  4
 4  No fear  5
 5  Very excited  4
 6  50+%  5
 7  15+ years  5
 8  2-3%  4
 9  10-25%  4
 10  Unlikely (will spend some)  2
 11  Desirable  3
 12  50+  5
 13  50+  5
 14  Of prime importance  5
15  Prefer a little  4

[Return to analyzer tool …]

Morgan recorded the number of “5’s” circled, multiplied them by 5, and wrote the answer to the right of the = sign. Morgan completed the process for the number of “4’s” circled, then the “3’s” and so forth. The products of the multiplications (40, 20, 3, 2, 0) were added to calculate the total score (65).

Number of 5’s, 4’s, 3’s, 2’s, & 1’s
  
5 x 8  =  40
4 x  5  =  20
3 x  1  =  3
2 x  1  =  2
 1 x  0  =  0
 Total  =  65

A total score of 65 would indicate the optimal TSOA Freedom Retirement Portfolio for Morgan is the Aggressive Growth portfolio. However, Morgan may choose to override this choice and use a different portfolio instead to be more conservative due to a personal preference to not assume too much risk.

 

Example #2

Taylor is 50 years old, has $50,000 in retirement accounts, and completed the questionnaire as follows:

Question #  Answer Score
 1  50-59  3
 2  10+  2
 3  With difficulty  2
 4  Major fear  2
 5  Concerned/skeptical  2
 6  10-20%  1
 7  15+ years  5
 8  3-4%  3
 9  25-40%  3
 10  Very unlikely  1
 11  Desirable  3
 12  40-49  4
 13  50+  5
 14  Very desirable  4
 15  Prefer some 3

 

Number of 5’s, 4’s, 3’s, 2’s, & 1’s
  
5 x 2  =  10
4 x 2  =   8
3 x 5  = 15
2 x  4  =  8
 1 x  2  = 2
 Total  =  43

A total score of 43 would indicate the optimal TSOA Freedom Retirement Portfolio for Taylor is the Growth with Income portfolio. However, Taylor may choose to override this choice and use a different portfolio instead to be more conservative (Retirement Income Cash Flow or Conservative Income Cash Flow) or more aggressive (Growth with Value or Aggressive Growth).

[Return to analyzer tool …]


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