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REFERENCES		 GLOSSARY

Modern Portfolio Theory, by Harry Markowitz appeared in 1952 Journal of Finance. From  http://www.riskglossary.com/

Modern Portfolio Theory from  New Zealand Site   From   http://www.moneyonline.co.nz/     Dictionary

Modern Portfolio Theory - the theory that says its possible to select an optimal combination of assets such that the investor secures the highest possible return for a given level of risk or the least possible risk for a given level of return. Using portfolio theory, an investor assembles a group of assets on the basis of how the individual assets interact with one another. (Correlation) Thus, a security or asset class would be selected not on the basis of expected performance in isolation, but rather on the expected influence to risk and return of the investor's entire portfolio.

Correlation - a measure of how closely two variables move together through time. For example, shares tend to have a high degree of correlation because their prices are influenced by the same forces. The concept of correlation is an important part of Modern Portfolio Theory (MPT) used for diversifying portfolios.

Modern Portfolio Theory, Risk & Return of Index Portfolios from Index Funds Advisor  http://www.ifa.com/

Efficient Frontier  and Portfolio Diversification from  http://www.moneychimp.com/

The Following Table Shows Stock, Bond and Foreign Fund % Using Your Expected Retirement Year:

Data Captured from www,morningstar.com (Enter ticker, Click Portfolio) Feb 2005 for:

Vanguard Target Retirement Funds,  Fidelity Freedom Funds and T.Rowe Price Retirement Funds
NAME
 TICKER
 CASH %
 STOCKS %
 BONDS %
 OTHER %
 FOREIGN %
Vanguard Retirement 2005
 VTOVX
 1.7
 32.7
 65.5
 0.0
 0.0
Vanguard Retirement 2015 VTXVX
 1.1
 48.2
 50.6
 0.2
 9.6
Vanguard Retirement 2025 VTTVX
 1.0
 58.6
 40.2
 0.2
 11.6
Vanguard Retirement 2035 VTTHX
 0.7
 77.5
 21.6
 0.3
 15.4







Fidelity Freedom 2005
 FFFVX
 17.6
 43.5
 38.4
 0.5
 6.6
Fidelity Freedom 2015 FFVFX
 10.1
 58.5
 30.4
 0.6
 10.2
Fidelity Freedom 2025 FFTWX
 4.6
 75.4
 19.2
 0.8
 14.0
Fidelity Freedom 2035 FFTHX
 3.5
 82.4
 13.3
 0.9
 17.3







T.Rowe Price Retirement 2005
 TRRFX
 13.0
 60.2
 26.2
 0.5
 10.2
T.Rowe Price Retirement 2015 TRRGX
 7.9
 72.0
 19.6
 0.6
 14.3
T.Rowe Price Retirement 2025 TRRHX
 4.6
 84.3
 10.6
 0.6
 18.6
T.Rowe Price Retirement 2035 TRRJX
 4.5
 89.0
 5.8
 0.6
 19.8

Note: These Vanguard, Fidelity and T.RowePrice funds do not agree on the % mix of stocks and bonds;
           However, all three have a similar foreign stock mix.

Example: If your 35 years old and expect to retire  30 years from now at age  65, Retirement 2035 Funds:
                Vanguard  21.6% Bonds,
                    Fidelity 13.3% Bonds
           T.Rowe Price  5.8%  Bonds

      Vanguard has a larger % of Bonds (Your age is closer to your Bond %), then Fidelity and T.Rowe Price

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