7twelve Model Slide Show

Building a Diversified Portfolio
An Introduction to 7Twelve ®
January 2022
Craig L. Israelsen, Ph.D.

www.7TwelvePortfolio.com
1
The Architect of 7Twelve®
Dr. Israelsen holds a Ph.D. in Family Resource Management from Brigham Young
University. He received a B.S. in Agribusiness and a M.S. in Agricultural Economics
from Utah State University. He taught at Brigham Young University for 9 years and at
the University of Missouri-Columbia for 14 years. He now teaches as an Executive-in-
Residence at Utah Valley University in the Personal Financial Planning Program in the
Woodbury School of Business.
Dr. Israelsen designed the 7Twelve® Portfolio in the spring of 2008. Since that time
hundreds of financial advisors have adopted it as the investment model for clients.
Primary among his research interests is the analysis of mutual funds and the design of
investment portfolios. He wrote monthly for Financial Planning Magazine for over 20
years and is a regular contributor to Horsesmouth.com. His research has also been
published in the Journal of Financial Planning, Journal of Asset Management (U.K.),
Journal of Performance Measurement, Asia Financial Planning Journal (Singapore),
Journal of Family and Economic Issues, Financial Counseling and Planning, and
Barron’s.
His research has been cited in the Christian Science Monitor, Wall Street Journal,
Newsweek, Forbes, Smart Money Magazine, Kiplinger Retirement Report, Advisor
Perspectives, Dow Jones Market Watch, Family Circle Magazine, and Bottom Line
Personal. Dr. Israelsen is also the developer of the 7Twelve® Portfolio
(www.7TwelvePortfolio.com) and the author of four books. His most recent books
are“7Twelve: A Diversified Investment Portfolio with a Plan” (John Wiley & Sons,
2010) and “Start Investing Now” (Amazon, 2018).
He is married to Tamara Trimble. They have seven children (Sara, Andrew, Heidi,
Mark, Nathan, Emma, Jared). Hobbies include hiking (100+ mountains in 2020-2021),
biking, swimming, woodworking, and family vacations. He has competed in the
Boston Marathon 5 times but has never won.
Click on book to For more information about the 7Twelve Portfolio visit www.7TwelvePortfolio.com
go to Amazon.com
7Twelve® is a registered trademark owned by Craig L. Israelsen. 2
7Twelve ®
Email: craig@7TwelvePortfolio.com
Web: www.7TwelvePortfolio.com
To purchase 7Twelve Portfolio Research Reports click below:

http://www.7TwelvePortfolio.com/Downloads/Web7TwelveReport.pdf
3
This educational powerpoint was developed by Craig L. Israelsen, Ph.D. and is a
document presenting portfolio research and analysis.
This document is neither investment advice nor an investment solicitation.
Implementation of the 7Twelve® portfolio is no guarantee of performance.
As we all know past performance is no guarantee of future performance.

This reminder/disclaimer applies to every slide in this powerpoint.
---------------------------------------------------------------------------------------------
This is a copyrighted document, copying for redistribution or re-selling
is prohibited unless written permission is
obtained from Craig L. Israelsen
For use of the original purchaser only.
7Twelve® is a registered trademark belonging to Craig L. Israelsen
Copyright © 2008-2022 Craig L. Israelsen

All rights reserved
4
Minimal Diversification
The S&P 500 Index
Large US
Stock
5
Two-Asset Diversification
60/40 Portfolio
Large US US
Stock Bonds
6
Good Diversification
7-Asset Portfolio
Developed
Large US Real US
Non-US Cash
Stock Estate Bonds
Stock
Commodities
Small Cap
US Stock
7
Superior Diversification
12-Asset Portfolio
Developed
Large US Real Natural US Non-US
Non-US Cash
Stock Estate Resources Bonds Bonds
Stock
Emerging Commodities/ Inflation

Midcap
Non-US Clean Energy Protected
US Stock
Stock Bonds
Small Cap
US Stock
8
7Twelve ®
7 Core Asset Classes Twelve Actual Holdings

US Stock Non-US Stock Real Estate Resources US Bonds Non-US Bonds Cash
Developed
Non-US Cash
Stock

Midcap
Non-US Clean Energy Protected
US Stock
Stock Bonds
Small Cap
US Stock
9
7Twelve ®
Equally-weighted exposure to 12 asset classes
Cash Large US Stock

TIPS 8.33% 8.33%
8.33%
Mid Cap US Stock
8.33%
International Bonds
8.33%
Small US Stock
8.33%
US Bonds
8.33%
Non-US Stock
8.33%
Commodities/
Clean Energy
8.33%
Emerging Markets
Natural Resources Real Estate 8.33%
8.33% 8.33%
10
Performance of Index-based
7Twelve Portfolio
(with annual rebalancing)
11
Commodities, 42.54%
Natural Resources, 39.95%
Real Estate, 32.49%
Large US Stock, 28.70%
Small US Stock, 26.82%

Mid US Stock, 24.76%
7Twelve Portfolio, 16.85%

Non-US Stock, 11.26%
TIPS, 5.96%
Cash, 0.04%
US Bonds, -1.55%
Emerging Stock, -2.23% Performance in 2021

Index-based 7Twelve Model
Non-US Bonds, -6.60%
-10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
12
Emerging Stock, 9.95%
Real Estate, 9.92%

Non-US Stock, 6.33%
TIPS, 5.31%
Commodities, 5.17%
US Bonds, 4.33%
Non-US Bonds, 4.31% 20-Year Performance (2002-2021)

Cash, 1.20%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
13
Emerging Stock, 29.56%
Commodities, 21.18%
Real Estate, 20.78%
Non-US Stock, 19.49%

Non-US Bonds, 7.02%
TIPS, 6.14%
US Bonds, 3.32% 20-Year Standard Deviation (2002-2021)

Cash, 1.47%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
14
Disclosures
Performance in the past is not a guarantee of performance in the future.
Raw data source: Steele Mutual Fund Expert
Calculations: Craig Israelsen, Ph.D.
Performance of the individual ETFs and the Passive ETF 7Twelve Portfolio in the prior slides in this section
generally reflects the performance of the following indexes.
The actual performance of the indexes below is shown on the following slide.
US Large cap S&P 500 Index (TR)

US Mid Cap S&P Midcap 400 Index (TR)
US Small Cap S&P Small Cap 600 Index (TR)
Non-US Developed MSCI EAFE Index NR USD
Emerging MSCI EM Index GR USD
Real Estate S&P Global REIT Index TR USD
Natural Resources S&P North American Natural Resources Index TR
Deutsche Bank Liquid Commodity Optimum Yield
Commodities
Diversified Commodity Index Total Return
US Bonds Barclays US Aggregate Bond Index TR USD
TIPS Barclays U.S. Treasury US TIPS Index TR USD
Non-US Bonds Barclays Global Treasury Index TR
Cash USTREAS Stat US T-Bill 90 Day TR
15
7Twelve ®
Eight Equity and Diversifying Holdings

The “Engines” of the Portfolio
Developed
Non-US Cash
Stock

Midcap
Non-US Protected
US Stock Clean Energy
Stock Bonds
Small Cap
US Stock
16
7Twelve ®
Four Fixed Income Holdings

The “Safety Brakes” of the Portfolio
Developed
Non-US Cash
Stock

Midcap
Non-US Protected
Stock Bonds
Small Cap
US Stock
17
Passive ETF 7Twelve Brakes 7Twelve Engines
7Twelve Model (4 ETFs) (8 ETFs)
2002 12.02 (6.96)
2003 7.05 36.91
2004 6.00 23.71
2005 0.36 18.34
2006 3.99 20.45
2007 8.53 13.11
2008 2.46 (38.98)
2009 6.11 35.41
2010 4.20 19.51
2011 6.19 (4.59)
Brakes have outperformed
2012 4.18 13.87 25% of the time
2013 (3.61) 16.28
2014 2.25 2.62
Engines have outperformed
2015 0.48 (7.85)
2016 2.28 14.07 75% of the time
2017 1.31 17.30
2018 1.65 (9.65)
2019 4.94 21.36
2020 5.41 5.96
2021 0.79 9.32
20-Year Ave.
Annualized Return
3.78% 8.48%
20-Year Standard
Deviation
3.44% 17.42%
18
7Twelve ®
A Multi-Asset Balanced Strategy

Equities and Diversifiers: 8 ENGINES Fixed Income: 4 BRAKES
65% of Overall Portfolio Allocation 35% of Overall Portfolio Allocation
Developed
Non-US Cash
Stock
Emerging Inflation
Midcap Commodities/
Non-US Protected
Stock Bonds
Small Cap
US Stock
19
Complete 7Twelve
Passive ETF 7Twelve Brakes 7Twelve Engines Model with 4
7Twelve Model (4 ETFs) (8 ETFs) Brakes and 8
Engines
2002 12.02 (6.96) (0.64)
2003 7.05 36.91 26.95
2004 6.00 23.71 17.80
2005 0.36 18.34 12.34
2006 3.99 20.45 14.96
2007 8.53 13.11 11.58 Passive ETF-based 7Twelve
2008 2.46 (38.98) (25.16) model delivers 86% of the
2009 6.11 35.41 25.64
2010 4.20 19.51 14.41
performance of the engines
2011 6.19 (4.59) (1.00) with only 68% of the risk—
2012 4.18 13.87 10.64 thanks to the brakes.
2013 (3.61) 16.28 9.65
2014 2.25 2.62 2.50
2015 0.48 (7.85) (5.07) Just like your car, 7Twelve
2016 2.28 14.07 10.14 maintains a constant
2017 1.31 17.30 11.97
2018 1.65 (9.65) (5.89)
commitment to engines
2019 4.94 21.36 15.89 AND brakes.
2020 5.41 5.96 5.78
2021 0.79 9.32 6.48
20-Year Ave.
Annualized Return
3.78% 8.48% 7.28%
20-Year Standard
Deviation
3.44% 17.42% 11.78% 20
Stop Chasing Performance
Passive ETF 7Twelve Portfolio with annual rebalancing
20-Year
Annualized
Investment Approach Performance
(2002-2021)
HARE:
Performance Chasing by
Investing 100% in Last Year’s
4.72%
BEST ETF
21
20-Year
Annualized
(2002-2021)
HARE:
4.72%
BEST ETF
HARE II:
5.93%
WORST ETF
22
20-Year
Annualized
(2002-2021)
HARE:
4.72%
BEST ETF
HARE II:
5.93%
WORST ETF
TORTOISE:
Invest in the equally weighted
12-asset Passive ETF 7Twelve
7.28%
with annual rebalancing
23
7Twelve Age-Based Models
®
Portfolio Allocations
7Twelve 7Twelve 7Twelve 7Twelve

Core Model Age-Based 50-60 Age-Based 60-70 Age-Based 70+
Large US Stock 8.33% 6.67% 5.00% 3.33%

Mid Cap US Stock 8.33% 6.67% 5.00% 3.33%
Small US Stock 8.33% 6.67% 5.00% 3.33%
Non-US Stock 8.33% 6.67% 5.00% 3.33%
Emerging Markets 8.33% 6.67% 5.00% 3.33%
Real Estate 8.33% 6.67% 5.00% 3.33%
Natural Resources 8.33% 6.67% 5.00% 3.33%
Commodities/Clean Energy 8.33% 6.67% 5.00% 3.33%
US Bonds 8.33% 6.67% 5.00% 3.33%
Inflation Protected Bonds 8.33% 6.67% 5.00% 3.33%
International Bonds 8.33% 6.67% 5.00% 3.33%
Cash 8.33% 26.67% 45.00% 63.33%
24
7Twelve ®
Growth of $10,000 over 20 Years from 2002-2021

Passive ETF 7Twelve “core” model and Age-Based Models (Annual Rebalancing)
Passive ETF
7Twelve Core,
Passive ETF $40,786
7Twelve 50-60,
Passive ETF $33,285
7Twelve 60-70,
Passive ETF $26,802
7Twelve 70+,
$21,298
-8.40% -13.99% -19.58% -25.16%

Performance in 2008
25
20-Year Retirement Portfolio Analysis: 2002-2021
$250,000 Initial Account Value on Jan 1, 2002 in Passive ETF 7Twelve Model
5% Initial Withdrawal, 3% Annual Increase in Annual Withdrawal
Total Withdrawal of $335,880
Ending Account Balance on December 31, 2021

(Dotted line is starting balance)
Passive ETF 7Twelve

Core, $423,089
Passive ETF 7Twelve

50-60, $290,735
Passive ETF 7Twelve

60-70, $179,633
Passive ETF 7Twelve

70+, $88,681
Vanguard Balanced
Index (VBIAX),
$313,858
0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000
26
Low-Cost 7Twelve® Models
Total % Return
as of 12/31/2021 assuming annual rebalancing
Active Passive Vanguard Mutual Vanguard ETF Fidelity ESG

Schwab
7Twelve® 7Twelve 7Twelve Fund 7Twelve 7Twelve 7Twelve
7Twelve
7Twelve
Model 12 actively 12 ETFs from 12 Vanguard 12 Vanguard 12 Fidelity

12 Schwab ETFs
12 ESG
managed funds various families mutual funds ETFs mutual funds compliant funds
Portfolio Aggregate
Annual Expense Ratio 0.66% 0.26% 0.15% 0.08% 0.35% 0.19% 0.45%
or 66 bps or 26 bps or 15 bps or 8 bps or 35 bps or 19 bps or 45 bps
(bps = basis points)
20-Year Average
Annualized Return 7.76% 7.28% 7.48% 7.61% 8.38% 7.68% n/a
(2002-2021)
Vanguard Vanguard
Year Vanguard Schwab Vanguard
Active Passive Mutual Fidelity Balanced
ETF ETF 500 Index
7Twelve 7Twelve Fund 7Twelve Index
(Negative returns in red) 7Twelve 7Twelve (VFIAX)
7Twelve (VBIAX)
1998 0.39 1.54 1.15 3.06 (5.51) 2.20 17.85 28.62
1999 16.63 16.82 15.33 15.23 23.82 16.60 13.61 21.07
2000 11.21 5.42 8.54 4.48 7.89 2.96 (2.03) (9.04)
2001 2.98 (1.94) (0.52) 0.06 (0.13) (0.16) (2.98) (11.98)
2002 2.18 (0.64) (0.11) (2.25) (0.04) 0.76 (9.45) (22.10)
2003 28.82 26.95 26.56 28.04 27.24 27.71 20.02 28.59
2004 19.79 17.80 19.06 17.38 18.27 17.00 9.37 10.82
2005 12.91 12.34 12.52 10.78 16.87 9.77 4.79 4.87
2006 15.98 14.96 15.47 16.20 15.66 15.50 11.06 15.75
2007 13.78 11.58 11.52 11.16 13.40 10.41 6.31 5.47
2008 (28.14) (25.16) (25.26) (26.71) (30.84) (25.89) (22.12) (36.97)
2009 32.36 25.64 24.54 28.62 30.84 29.35 20.11 26.62
2010 14.52 14.41 14.22 15.59 15.19 14.23 13.29 15.05
2011 (6.31) (1.00) (0.22) (0.84) (3.16) (2.29) 4.29 2.08
2012 12.42 10.64 10.49 11.94 12.96 11.97 11.49 15.96
2013 11.33 9.65 8.14 12.69 11.72 11.08 18.10 32.33
2014 0.05 2.50 5.59 5.81 3.54 3.42 9.99 13.64
2015 (6.96) (5.07) (5.07) (4.48) (4.83) (3.90) 0.51 1.36
2016 9.19 10.14 12.76 11.04 11.06 8.96 8.77 11.93
2017 13.67 11.97 11.39 11.84 12.87 12.57 13.89 21.79
2018 (7.64) (5.89) (9.25) (7.69) (8.41) (6.71) (2.86) (4.43)
2019 16.16 15.89 17.31 17.04 17.52 15.94 21.80 31.45
2020 13.82 5.78 5.14 3.63 9.65 7.88 16.40 18.37
2021 5.28 6.48 8.56 7.75 16.68 10.12 14.23 28.67
3-Year Annualized Return1 11.65 9.28 10.22 9.33 14.56 11.26 17.43 26.04
24-Yr Growth of $10,000 59,752 50,013 53,282 53,859 62,976 53,810 58,671 76,586
24-Year Standard Deviation of
12.75 11.14 11.21 11.73 13.33 11.48 10.74 17.56
Annual Returns (%)
Annual % Expense Ratio in
0.66% 0.26% 0.15% 0.08% 0.35% 0.19% 0.07% 0.04%
January 2022
28
7Twelve ®
Active and Passive 7Twelve models
Rebalancing Frequency
20-Year Annualized Return as of December 31, 2021
7Twelve No Monthly Quarterly Semi-annual Annual

model Rebalancing Rebalancing Rebalancing Rebalancing Rebalancing
Passive ETF 7.23 7.06 7.22 7.22 7.28
Active 7.70 7.45 7.63 7.68 7.76
29
Disclosures
Performance in the past is not a guarantee of performance in the future.
Raw data source: Steele Mutual Fund Expert
Calculations: Craig Israelsen, Ph.D.
Performance of the individual ETFs and the Passive ETF 7Twelve Portfolio in the prior slides in this section
generally reflects the performance of the following indexes.
The actual performance of the indexes below is shown on the following slide.
US Large cap S&P 500 Index (TR)

US Mid Cap S&P Midcap 400 Index (TR)
US Small Cap S&P Small Cap 600 Index (TR)
Non-US Developed MSCI EAFE Index NR USD
Emerging MSCI EM Index GR USD
Real Estate S&P Global REIT Index TR USD
Natural Resources S&P North American Natural Resources Index TR
Deutsche Bank Liquid Commodity Optimum Yield
Commodities
Diversified Commodity Index Total Return
US Bonds Barclays US Aggregate Bond Index TR USD
TIPS Barclays U.S. Treasury US TIPS Index TR USD
Non-US Bonds Barclays Global Treasury Index TR
Cash USTREAS Stat US T-Bill 90 Day TR
30
Introducing 7Twelve® Partners
• Monthly performance analytics for 7Twelve and underlying asset classes
• Client-facing talking points for 7Twelve asset classes
• Advisor-focused webinars hosted by Craig Israelsen and Lunt Capital
• Client/prospect-ready, white-labeled 7Twelve marketing materials
• Regularly updated mutual fund and ETF tickers to implement 7Twelve
• Updated investment research from Dr. Craig Israelsen
• Approved, limited use of the 7Twelve registered trademark
• Authorized use of 7Twelve-related journal article reprints
For more information:

http://www.luntcapital.com/7twelve-partners/
31
The 7Twelve Portfolio
®
Email: craig@7TwelvePortfolio.com
Web: www.7TwelvePortfolio.com
To purchase 7Twelve Portfolio Research Reports click below:

http://www.7TwelvePortfolio.com/Downloads/Web7TwelveReport.pdf
32
This educational powerpoint was developed by Craig L. Israelsen, Ph.D. and is a
document presenting portfolio research and analysis.
This document is neither investment advice nor an investment solicitation.
Implementation of the 7Twelve® portfolio is no guarantee of performance.
As we all know past performance is no guarantee of future performance.

This reminder/disclaimer applies to every slide in this powerpoint.
---------------------------------------------------------------------------------------------
This is a copyrighted document, copying for redistribution or re-selling
is prohibited unless written permission is
obtained from Craig L. Israelsen
For use of the original purchaser only.
7Twelve® is a registered trademark belonging to Craig L. Israelsen
Copyright © 2008-2022 Craig L. Israelsen

All rights reserved
33

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Building a Diversified Portfolio

Craig L. Israelsen, Ph.D.

Craig L. Israelsen, Ph.D.

To purchase 7Twelve Portfolio Research Reports click below:

This document is neither investment advice nor an investment solicitation.

Implementation of the 7Twelve® portfolio is no guarantee of performance.

As we all know past performance is no guarantee of future performance.

For use of the original purchaser only.

7Twelve® is a registered trademark belonging to Craig L. Israelsen

Copyright © 2008-2022 Craig L. Israelsen

Emerging Commodities/ Inflation

7 Core Asset Classes Twelve Actual Holdings

Emerging Commodities/ Inflation

Equally-weighted exposure to 12 asset classes

Cash Large US Stock

Natural Resources, 39.95%

Real Estate, 32.49%

Large US Stock, 28.70%

Small US Stock, 26.82%

7Twelve Portfolio, 16.85%

Emerging Stock, -2.23% Performance in 2021

-10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

Mid US Stock, 10.56%

Emerging Stock, 9.95%

Real Estate, 9.92%

Large US Stock, 9.52%

7Twelve Portfolio, 7.76%

Natural Resources, 6.01%

Non-US Bonds, 4.31% 20-Year Performance (2002-2021)

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

Natural Resources, 24.74%

Real Estate, 20.78%

Non-US Stock, 19.49%

Mid US Stock, 18.31%

Small US Stock, 18.01%

Large US Stock, 17.56%

7Twelve Portfolio, 12.26%

US Bonds, 3.32% 20-Year Standard Deviation (2002-2021)

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

US Large cap S&P 500 Index (TR)

Eight Equity and Diversifying Holdings

Emerging Commodities/ Inflation

Four Fixed Income Holdings

Emerging Commodities/ Inflation

A Multi-Asset Balanced Strategy

7Twelve 7Twelve 7Twelve 7Twelve

Large US Stock 8.33% 6.67% 5.00% 3.33%

Growth of $10,000 over 20 Years from 2002-2021

-8.40% -13.99% -19.58% -25.16%

Ending Account Balance on December 31, 2021

Passive ETF 7Twelve

Passive ETF 7Twelve

Passive ETF 7Twelve

Passive ETF 7Twelve

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000

Active Passive Vanguard Mutual Vanguard ETF Fidelity ESG

Model 12 actively 12 ETFs from 12 Vanguard 12 Vanguard 12 Fidelity

Active and Passive 7Twelve models

7Twelve No Monthly Quarterly Semi-annual Annual

Passive ETF 7.23 7.06 7.22 7.22 7.28

Active 7.70 7.45 7.63 7.68 7.76

US Large cap S&P 500 Index (TR)

For more information: