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The Power Index used in the 401k Accelerator is a powerful tool you can use to determine suitable investments for you and your family. The following items comprise the Power Index.
Power Index - The Power Index is our proprietary fund rating, which forecasts the risk-adjusted returns over the next 12 months and ranks each fund within its group on a scale from 0 to 99. For example, we forecast that a fund with a Power Index rating of 75 will outperform 75% of the other funds in its group on a risk-adjusted basis over the next year.
Power Trend - The Power Trend quantifies the current market demand for each fund's underlying assets. A positive Power Trend indicates that the demand for the fund is currently increasing and, therefore, the fund's NAV is on the rise.
Advice - We have studied the risk-adjusted return potential for each mutual fund and have provided our investment recommendation to our subscribers. The mutual funds contained in our model portfolios are designated with a "Strong Buy." YTD, 1-Mo, 3-Mo, and 1-Yr Returns - The 1-Month, 3-Month, and 1-Year returns are on a total return basis, compounded monthly. The returns include the change in NAV over time and assume that all dividends and distributions are reinvested in the fund.
Average Annual Compounded Returns - 3-Year, 5-Year and 10-Year returns are the average annual compounded returns over the time period. The returns include the change in NAV over time and assume that all dividends and distributions are reinvested in the fund.
StdD - The annualized standard deviation is calculated from monthly returns over the past three years. Standard deviation is a measure of total historical risk. Assuming that returns are normally distributed, 95% of the time the historical return was within 2 standard deviations of the historical 3-Year average.
Beta - Beta is a measure of historical market-related or systematic risk. A fund that has a beta of 1 has the same volatility as the S&P 500. Systematic risk is the tendency for the fund's return to respond to swings in the overall stock market.
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