Using Scottrade Portfolio Review Tool

There are two components to the Scottrade Portfolio Review Tool that can help you determine the right asset mix for your goals, time horizon and financial situation: Target Models and Performance Review charts.

Our Portfolio Review Tool offers five different Target Models, each with pre-defined asset allocations, to give you a framework for determining your asset mix. Each model follows a different investment strategy (from conservative to aggressive), and selecting one can provide an easy way to adopt a strategy that aligns with your goals. The model you select will depend largely on the information you were asked to identify in What You Need to Get Started. The number of years you have to invest will determine how conservative or aggressive you are, and you'll need to think about the amount of money you need to reach your goal when you're evaluating each model's expected returns.

Once you select a Target Model, you can use it as the framework for changing your portfolio's allocation to align with your goals. Target Models offer you an easy way to reallocate your investments using an established strategy and ensure that your asset allocation aligns with that strategy.

Once you've determined your asset mix, the Performance Review charts provide a way to evaluate different asset allocation strategies and investment combinations to see how they might have performed in the past. When you use this tool, you can enter a starting value, or the amount of your original investment, to see how that investment might have performed according to the asset mix you selected. The Tool provides an indication of whether you would have met your goal using that asset mix.

Limitations of Asset Allocation Tools

For example, if you use six different online asset allocation tools, you're likely to get six different recommendations for your asset mix. Why? Because each tool might use a different set of assumptions.

Another important limitation is that most online asset allocation tools don't take taxes into account because each investor's tax situation is different. But in the real world of investing, taxes are a huge issue, but most asset allocation tools generate pre-tax values.

You'll also need to keep in mind when uusing our Performance Review chart that past performance is no guarantee of future results.

Despite these limitations, the Scottrade Portfolio Review Tool can help you take control of your financial future and manage your portfolio according to your goals. It can provide you with an asset allocation strategy that helps address your goals and time horizon, and provide the tools you need to stick to a disciplined investing plan.

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Past performance of a security or strategy does not guarantee the security or strategy will be successful in the future. Results could vary significantly, and losses could result.

The analytical tools described in this article are for information purposes only and their use does not guarantee a profit. None of the information provided should be considered a recommendation or solicitation to invest in, or liquidate, a particular security or type of security. Investors should fully research any security before making an investment decision.