|Sharpe Ratio||2007 Return||2007 Risk||
|2008 Return||2008 Risk||Sharpe Ratio|
|IWM Actual Portfolio (total AUM, net of all fees and expenses)||14.40%||2.50%||4.31||7.15%||2.63%||1.48||-30.05%||6.50%||NA|
|Moody's AAA Bond Yield||4.49%||0.06%||NA||4.45%||0.04%||NA||4.54%||0.04%||NA|
|S&P 500 Index Total Return||14.46%||3.63%||2.99||4.25%||3.97%||0.25||-37.84%||8.10%||NA|
Insight Wealth Management (IWM) is proud of our investment performance since beginning to serve investors. The IWM portfolio, reflecting total AUM and net of all fees and expenses, generated a return approximately equal to that of the S&P 500 index in 2006, with substantially less risk and a much higher Sharpe ratio. We beat the return of the S&P 500 in 2007 by nearly 70% with a Sharpe ratio nearly six times that of the S&P 500 and substantially lower risk. In 2008, our portfolio's loss was 21% less than that of the S&P 500 with lower risk and allocations structured to take advantage of the inevitable market rebound.
IWM's equity strategy is based on combining diversified exposures to multiple sectors in the U.S. and global economies with the dual goals of minimizing risk and boosting long-term return. Allocations to investment grade bonds and cash equivalents buffer risk further. This strategy is based on Markowitz' Nobel Prize winning research on portfolio theory that lays out the foundations of diversification and combining asset classes that are not perfectly correlated with each other to minimize risk.
Knowing how your portfolio is performing is crucial for all investors. Moreover, that performance must be considered relative to appropriate benchmarks. Part of the fees you pay an advisor reflect the services you receive for analysis and planning, but much of those fees apply to the investments your advisor recommends. If those investments do not perform as well as inexpensive index funds, you are overpaying for underperformance.
IWM provides our investment performance publicly on this web site. In addition, each client receives a detailed analysis every quarter of how their individual portfolio is performing compared with their own investment goals and relevant market benchmarks.
AUM means "assets under management." The IWM portfolio performance information presented here includes all assets for which IWM has discretionary authority or provided investment advisory service.
The returns on the three benchmark returns adjust the gross returns to reflect a hypothetical 1.20 percent in annual total fees.
Risk is measured as the standard deviation of returns. The lower this measure is, the less volatile (risky) the investment portfolio is.
The Sharpe ratio measures investment return relative to the amount of risk taken to achieve that return. A higher Sharpe ratio indicates better risk-adjusted portfolio performance.
Past performance is not a guarantee of future performance. Each client's portfolio performance will vary based upon their tolerance for investment risk and individual investment strategy, which is structured to reflect that risk tolerance.