1. How do I use the Dresen Diversified Portfolio Model tool?

Please see the Model Overview whitepaper to better understand how to use the model.

2. Can I use this tool more than once?

Both versions of the Dresen Diversified Portfolio Model tool are based upon historical market returns. Although you could use the same report from year to year to assist you in making your asset allocation decisions, it would be prudent to update your report every year once the new data has been released for the previous calendar year. This takes place in mid to late January every year. Just in time for your annual rebalancing.

3. How often do you update your database?

The current database has data based upon historical returns through 12/31 of the previous calendar year. An annual update is performed on the database to include the previous years returns in the model every January.

4. I am having technical problems accessing the tool?

Please contact us at support@moneymodel.com and we will work with you to resolve your problem

5. Which funds should I choose in my personal portfolio to best align with the asset classes used in the model?

Which funds you choose for your portfolio to align with the asset classes used in the model is up to you to determine. Although MoneyModel.com does not suggest any specific funds or provide services to do this, we do have two example portfolios made up of Fidelity and Vanguard funds to give you an idea what a portfolio might look like. Please understand, this is only to be used for illustrative purposes only.

6. How often should I rebalance my portfolio?

For passive investment with a focus on retirement planning, conventional wisdom suggests an annual rebalance is sufficient.

7. What's the difference between the Minimization of Portfolio Variance model and the Minimization of Downside Risk model?

There is not much difference at all between the two. Statistically speaking, the models are different. The Minimization of Portfolio Variance attempts to find the optimal allocation model where the variance of the portfolio is minimized for a target return. The same holds true for the Minimization of Downside Risk model. In that model, you are attempting to protect your portfolio from the negative effects of market downturns. What is most interesting is that the two models are, in fact, almost identical. There are, however, some very slight differences between the two. Enough in some cases that we chose to leave both so people would have the choice between the two depending upon their personal preferences.