Limited Risk Strategy
This strategy is for people who probably won't need to spend or borrow against their retirement balance for at least 5 years, but they still don't want to see the large losses that will sometimes happen with a 100% common stock strategy. (In other words, you have the time and patience needed to succeed with some common stocks, but you would rather not endure the 30% to 40% [or more] losses that can happen when you own 100% stocks.)
In the Limited Risk Strategy we pursue that goal by holding a large "safety cushion" of stable-value investments, about 65% of the total fund. The other 35% or so of the total fund is invested in common stocks, through three different funds which generally emphasize the larger technology, drug/medical products, and consumer stocks. (Glenview State Bank believes in the long term growth potential of those three industries.) This blend of safe investments and common stocks means that when stocks fall sharply in value, the Limited Risk Strategy will probably not fall very much. When stocks rise, the Strategy will probably do better than a pure, low-risk strategy.
Our current investments are approximately as follows. These are only general guidelines for us, rather than a formula to be precisely matched. We seldom change these very much, unless there is a dramatic change in one of the fund's management styles.
|65%||Federated Capital Preservation Fund|
|15%||Vanguard Growth Index Fund|
|10%||Fidelity Select Technology Fund|
|10%||Vanguard Health Care Fund|
The past performance figures of the Limited Risk Strategy are only useful as illustrations of the relative return rates among Strategies with different risk levels, rather than as guides to future returns.