The optimization process begins with collecting as much historical data as possible on assets available to our clients for investment. These include: U.S. Stocks, International Stocks, Emerging Countries Stock, Real Estate Stocks, 7-10 Year Treasury Bonds, 20+ Year Treasury Bonds, 3-Month Treasury Bills, Micro-Cap Stocks, Currencies, Commodities, Long-Short Strategies, Hedge Funds, Corporate Bonds, and Mortgage-Backed Securities.

Using the historical data gathered in Step 1, CitrinGroup calculates the average return and standard deviation of each asset. For example, we calculated that International Stocks averaged a return of 9.35% annually from January 1970 to December 2003.

After our calculations in Step 2, CitrinGroup utilizes standard economic theory to calculate the combination of all assets that will yield a desired rate of return with the least amount of risk. For example, there are literally millions of ways to construct a portfolio that will yield an 8.0% annual rate of return. But, what is the one single combination within these millions of possible portfolios that will yield 8.0% with the least amount of risk? Economists refer to this step as "Mean-Variance Optimization."

Information contained in pie graphs above is for informational purposes only and not intended as actual investment advice.