All investment results were calculated in accordance with the AIMR Standards for Invest- ment Performance Reporting. A significant portion of these stocks is in international securities as well as mid cap growth stocks.
Diversification is the most powerful tool an investor can use to address risk.
After diversification, the most powerful tool an investor has to control risk is a systematic way of rebalancing. By making it automatic, the fund forces itself to buy low and sell high. A great example of this occurred in the last year. Through the rebalancing policy, which has been in place now for several years, the fund was able to profit from the expansion of the technology market while sidestepping some of the downside experi- enced later in the year. This process alone contributed a significant portion of the fund s total return of the past year.