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DALBAR's Prudent Asset Allocation Worksheet

Prudent Asset Allocation ("PAA") is an overarching investment strategy that separates investor's assets into two channels and manages the movement from one to the other in a way that maximizes the safety of the first channel (the Preservative component) and maximizes return in the second (the Growth component). In this way investors earn as much as is feasible without putting their wellbeing at risk.

The key benefits of PAA are:

•  A balance of Preservative and Growth components that is specific to investor's current situation.
•  Elimination of concerns of making ends meet.
•  Elimination of fears of market ups and downs.
•  Maximum return on long term assets.
•  Continuously adapting to changes in personal situation and investment markets.
•  Ability to always wait for market recovery before making withdrawals.

The PAA Worksheet presented below performs calculations that determine optimum allocation of assets to the Preservative component to cover expenses, planned expenditures, emergencies and other unexpected events.

Resources shown provide detailed background on PAA and explanations of the principles employed and their historical basis.