http://www.sec.gov/Archives/edgar/data/826644/000119312514032521/d668750d497.htm
497 1 d668750d497.htm 497E
SCO-STATSUP-1 020314
Statutory Prospectus Supplement dated February 3, 2014
The purpose of this mailing is to provide you with changes to the current Statutory Prospectus for Class A, B, C, R, and Y shares of the Fund listed below:
Invesco Select Companies Fund
Effective the open of business on March 5, 2014, the Fund will close to all investors, other than in the circumstances outlined below.
The sentence “As of the close of business on March 15, 2012, the Fund limited public sales of its shares to certain investors” on the front cover of the prospectus is deleted in its entirety and replaced with the following:
“Effective as of the open of business on March 5, 2014, the Fund will close to all investors, other than Employer Sponsored Retirement and Benefit Plans already invested in the Fund, which may continue to make additional purchases of Fund shares and open new accounts for participants in these plans.”
The following information replaces in its entirety the information appearing under the heading “Other Information – Limited Fund Offering”:
“Effective as of the open of business on March 5, 2014, the Fund will close to all investors, other than Employer Sponsored Retirement and Benefit Plans already invested in the Fund, which may continue to make additional purchases of Fund shares and open new accounts for participants in these plans.
The Fund may resume sale of shares to new investors on a future date if the Adviser determines it is appropriate.”
SCO-STATSUP-1 020314
--------------------------------------------------------------------------------
AIF-SUP-1 020314
Statutory Prospectus Supplement dated February 3, 2014
This supplement supercedes and replaces in its entirety the supplement dated October 25, 2013
The purpose of this mailing is to provide you with changes to the current Statutory Prospectus for Class R5 and R6 shares, as applicable, of the Funds listed below:
Invesco Balanced-Risk Allocation Fund
Invesco Balanced-Risk Commodity Strategy Fund
Invesco China Fund
Invesco Developing Markets Fund
Invesco Emerging Market Local Currency Debt Fund
Invesco Emerging Markets Equity Fund
Invesco Endeavor Fund
Invesco International Total Return Fund
Invesco Premium Income Fund
Invesco Select Companies Fund
Effective November 8, 2013, Invesco Balanced-Risk Commodity Strategy Fund re-opened to new investors. Accordingly, effective November 8, 2013, the last sentence on the front cover of the prospectus was deleted in its entirety.
Effective the open of business on March 5, 2014, Invesco Select Companies Fund will close to all investors, other than in the circumstances outlined below.
The sentence “As of the close of business on March 15, 2012, Invesco Select Companies Fund limited public sales of its shares to certain investors” on the front cover of the Invesco Select Companies Fund prospectus is deleted in its entirety and replaced with the following:
“Effective as of the open of business on March 5, 2014, Invesco Select Companies Fund will close to all investors, other than Employer Sponsored Retirement and Benefit Plans already invested in the Fund, which may continue to make additional purchases of Fund shares and open new accounts for participants in these plans.”
The information appearing under the heading “Other Information – Limited Fund Offering (Invesco Developing Markets Fund, Invesco Select Companies Fund and Invesco Balanced-Risk Commodity Strategy Fund)” is deleted in its entirety and replaced with the following:
“Limited Fund Offering (Invesco Developing Markets Fund and Invesco Select Companies Fund)
Effective as of the close of business on November 22, 2010, Invesco Developing Markets Fund closed to new investors. Investors should note that the Fund reserves the right to refuse any order that might disrupt the efficient management of the Fund.
Investors who invested in the Invesco Developing Markets Fund on or prior to November 22, 2010 may continue to make additional purchases in their accounts.
Any retirement plan may continue to make additional purchases of Invesco Developing Markets Fund shares and may add new accounts at the plan level that may purchase Invesco Developing Markets Fund shares if the retirement plan had invested in Invesco Developing Markets Fund as of November 22, 2010. Any brokerage firm wrap program may continue to make additional purchases of Invesco Developing Markets Fund shares and may add new accounts at the program level that may purchase Invesco Developing Markets Fund shares if the brokerage firm wrap program had invested in Invesco Developing Markets Fund as of November 22, 2010. All retirement plans and brokerage firm wrap programs that had approved Invesco Developing Markets Fund as investment options as of November 22, 2010, but that had not opened an account in Invesco Developing Markets Fund as of that date, may open an account and make purchases of Invesco Developing Markets Fund, provided that the retirement plan or the brokerage firm wrap program opened its initial account with Invesco Developing Markets Fund prior to October 31, 2011.
Effective as of the open of business on March 5, 2014, Invesco Select Companies Fund will close to all investors, other than Employer Sponsored Retirement and Benefit Plans already invested in the Fund, which may continue to make additional purchases of Fund shares and open new accounts for participants in these plans.
The Funds may resume sale of shares to new investors on a future date if the Adviser determines it is appropriate.”
AIF-SUP-1 020314 1

I don't know how some people make ends meet (I was always amazed at how my grandmother lived with low SS payments and small savings).
There are programs that help, especially with the necessities you allude to. Medicaid rather than, or in addition to Medicare, lifeline phone service, rent control, etc.
Costs also vary greatly by geography. Here's an AARP article (copied on the Fidelity site), giving ten places to retire on $30K/year. On the other hand, Brooklyn NY made a list last year as the second most expensive "city" to live in (after Manhattan, apparently another "city"), yet the median household income there is below the national average. So there's more going on than just raw numbers.

FYI:
Regards,
Ted
http://www.mercurynews.com/business/ci_24986982/retirement-planner-old-investment-concepts-still-hold-weight?IADID=Search-www.mercurynews.com-www.mercurynews.com#

Reply to @hank:
Being overweight cash might not be a bad thing should the market continue pulling back. Having a cash hord, say 25%, could indeed become a blessing. I am holding 20+% myself and my broker thinks that is too much. Told him perhaps so if I was in the accumulation stage of my life but my little fife was now built; and, I considered it part of my financial survial plan. And, besides it provides me an opportunity to venture into other areas beside the markets that I might profit in. I have some metorites that were found years ago on one of the family farms that sit on an old Indian trading path that ran form Richmond to Charleston. Although, I don't own this land I have access to it and I might just see if more of them can be found through a light minning and prospecting process. Thinking of taking an old small utility trailer putting a generator on it to power an electromatic field and then pulling this behind a tractor with a plow and or disk that turns the soil. With this, since most metorites are maganetic bingo I've got myself a metorite finder plus it will collect other iron objects too. I got some neat things I plan to venture into this year as I start my retirement. Besides the field needs to be plowed anyway. In the past we found them as kids walking behind the tractor or riding on top of the plow or disk just through visual sight. My grand father would run the tractor at a slower speed when we did this and he only tolerated us for so long. If he only new what metorites were worth today ... Well, I think he would have had a different perspective.
Old_Skeet

Reply to @bee: Not fond of target retirement funds for many reasons for someone with a long time horizon. Fees eat up too much for very little value. The fund which has to market and attract assets every year up to close to target has to make conflicting decisions to look good every year if not every quarter that may not be optimal for every investor so the investor returns might be very different from the fund return depending on when and how often they invest into it, the strategies and allocation decisions opaque and unpredictable for the future, etc. They make good benchmarks to measure your investment portfolio and make sure you are not doing something stupid.
At any time, you can find a target date fund that seems to be doing well. But what can you say about what a particular target fund will do with its glide path, will it remain too risky or become too conservative?
You can see online services like wealthfront and betterment as lower cost versions of some of these high ER target date funds.

Cman have you compared Target Date Retirement funds in terms of composition or performance as an alternative to wealthfront's set of choices?
Here's Vangaurd's
https://investor.vanguard.com/mutual-funds/target-retirement/#/
Here's TR Price's 2050 fund composition:
www3.troweprice.com/fb2/fbkweb/composition.do?ticker=TRRMX

Reply to @cman:

This is a very good discussion to have not just for @tp2006 but the whole board. It makes explicit the assumptions/biases behind fund suggestions which are usually left unsaid caught up in the specifics of a fund. It seems sometimes that even the fit and role for a portfolio and the investor is ignored while enamored with a fund. That leads to kitchen sink portfolios or the equivalent of all-star teams that flop.

This I agree with wholeheartedly.
I actually really like the wealthfront profile. One thought experiment I forced myself to go through was to think of my retirement date, 30+ years off, as I would gifting a fund to a newborn through a UGMA in order that they have something substantial at 21. Bonds serve very little purpose there, so I like that allocation. That, of course, assumes tp2006 is dispassionate and doesn't look often. I think his purpose should be buying lots of equity shares now he will hold for 30+ years. That being said, I'd prefer to see a less volatile bond index for ballast, more small caps, and a greater exposure to natural resources. I've also slightly increased U.S. Dividend stocks as a sort of ballast as well. This is a little more complex, but I think a little more diverse and able to grow.
US Equity = 35-40%
US Stocks: VTI/ITOT 15%
Dividend Stocks: VIG/SCHD 15-20%
US Small Stocks: VB/VXF/IJR 5%
Foreign Equity = 40%
Foreign Stocks: VEA/IEFA 15
Emerging Markets: VWO/IEMG 15
Foreign Small Stocks: VSS 10%
Inflation Hedge =10-15%
US Real Estate: VNQ/IYR 5-10%
Natural Resources/Energy: MLPI/VDE/DBC 5-10%
Bonds = 10%
US Bonds: BND/AGG 5%
Emerging Market Bonds EMB 5%
Notes:
-Using the iShares cores funds would give you greater small cap exposure in the foreign funds. You could then decrease the two small cap funds.
-Regarding natural resources funds, my preference is for funds that deliver future cash flow. If you choose a commodity fund, go 5% at most.
-This is a highly volatile portfolio. If that's going to bother you, increase BND/AGG while decreasing domestic and foreign exposure equally.
-I've replaced LQD with a broad bond market index for diversification purposes. Short term, treasuries are probably a bad bet, but this is for long term, and corporates behave more like equities.
-If you did want to explore some more active funds, start with Small Cap Int, EM equities, EM Bonds, US Bonds then Foreign/DM equities. Since this is mainly an AA discussion, I've not included any suggestions here. I will say, I'm not a fan of indexing any EM product as state run firms can play games here.
Debate away, and good luck!

Starting this as a separate thread for the portfolio construction exercise for tp2006 starting from his model portfolio that captures his circumstances and risk tolerance.

US Stocks Vanguard VTI ETF 21%
Foreign Stocks Vanguard VEA ETF 18%
Emerging Markets Vanguard VWO ETF 22%
Dividend Stocks Vanguard VIG ETF 13%
Real Estate Vanguard VNQ ETF 16%
Corporate Bonds iShares LQD ETF 5%
Emerging Market Bonds iShares EMB ETF 5%

Notes to @tp2006
1. This corresponds to a 50% domestic, 40% international and 10% bonds selected for your age, income profile and risk tolerance, etc. You are just starting out with a small amount in a retirement account and hence the not so conservative portfolio.
2. It answers part of your questions on how to divide the allocation. This tool splits it between asset classes that have the lowest correlation possible for your profile on a risk adjusted performance basis. Hence the domestic stocks split between total market, real estate and dividend stocks. The total market divides it for size according to market weighting within the US total market.
3. Now create this portfolio on M* as if you invested your entire portfolio on Jan 1. Get the composite statistics provided by M* for the portfio in the Xray, volatility numbers and post them here.
4. The exercise will be to either just keep this portfolio or tweak it maintaining the risk/volatility profile. Some small deviations won't matter much. For example, you can try to solicit find suggestions to replace VTI. Or you can ask people to create an equivalent or better portfolio and compare its characteristics. You can also try to map your existing portfolio to this and create a transition plan.
5. If you are feeling adventurous you can go to hiddenlevers.com and create a dummy free account. The information you provide including email address can be fake. You can only add 5 funds for the dummy portfolio, so just use the equity etfs. It is a.very painful site to use but allows you to stress test your portfolio for various scenarios from commodity crash, end of QE, demographics change, etc. What you are looking for is how the portfolio behaves in those scenarios so you can withstand it. So, for example, it might say that your equity part may go down by 50% in the last financial meltdown scenario. Can you stand it without panicking? If not, go back to wealth front dashboard and turn down the risk tolerance to get new allocations and repeat.
6. At the end of this exercise, you will have a portfolio that you can buy and monitor perhaps once a year at most and go through the same exercise again or beter just rebalance it.
7. For the amount of money you have you should be aiming for 3-8 funds total. You can get to this in many ways including a single allocation fund for two or more of those model portfolio funds or splitting another. But every fund you add should be justified in the context of the whole portfolio.
8. With a larger portfolio, you can create another pot for funds with alternate strategies, other asset classes, etc. But this is not worth it for the capital you have available at the moment.
The above is what a competent investment advisor might do if you paid money. If you don't want to do the above, then find an advisor or try to stick as close to the model portfolio as possible without getting tempted by the blue and red marbles being suggested, however intriguing the fund might seem and just throwing it in to create a kitchen sink portfolio.
Good luck.

Reply to @cman: Ah ... Less dire than first assumed. "Liquidity" is the key here. Being able to withdraw your own cash from a bank or CU or being able to draw upon an existing line of credit would make a huge difference near term. Obviously, those of us in the "draw-down" phase of retirement would suffer greatly if those investments became inaccessible for any length of time.
Some cash on hand is probably a good idea. And diversify investments as broadly as you can. Having a pension or annuity is one type of "invested" asset. Stocks and bonds are another. Tangibles like a home, land, art, antiques, coins, etc. comprise still another form.
I also believe in diversifying among various brokerages or fund houses. Most, I suspect, would disagree on the need for that.

FBTIX 12.96
PHSZX 9.40
PJP 4.98
VNQ 2.83
OSMYX 1.30
The three health care/biotec funds/etfs represent only 5% of total portfolio, but 8% of retirement portfolio. Health care in general is about 11% of total, my biggest sector bet. Was real surprised VNQ was one of my higher ytd funds. Glad to see it finally moving.

Reply to @cman: Perhaps an "insane focus" on the markets will allow us all to overcompensate in the best manner possible by "compounding our investment capital to such an extent that all this stuff becomes meaningless". Or, we can all calmly reflect on our frailties as investors and remind ourselves that the markets giveth and taketh away and to prepare for those times as well, as you have suggested.
BTW, I am wary of this notion of increasing equity as one ages in retirement as well.
Best regards,

Very interesting article and discussion. My thanks to all.
What concerns me about the article's advise is that the probability for seriously adverse outcomes increases as we age during retirement...our bodies to tend to require more repair work as the years pass....with the increases skewed heavily upward during the last years of our lives! In my mind, that counterbalances the shorter time horizon we (my wife and myself) have as each year passes during retirement. So, increasing equity exposure just because we are another year older doesn't make sense to me (our wealth is not extensive enough that we are only considering the size of the inheritance we may be passing on to our heirs).
My "simple minded" approach has been limit our spending during retirement enough that we can increase the real (inflation adjusted) account balance in our investment accounts during our "healthy" retirement years....to set-aside our "real principal" for emergencies. Our 2014 household budget tells me that during 2014 our investment pot will provide 33% of the household funds we will spend based on 4 predetermined quarterly withdrawals from that pot (the rest coming from pensions and social security). During the decade since I "retired", this strategy has worked comfortably based on an annual withdrawal rate of 3.5 to 4% of the annual beginning balance in our investment accounts.
I do not have a temperament suited for placing "insane focus" on individual investments. So, I pay a group of managers of actively managed mutual funds to provide that "insane focus" for me. Those investments currently include 27% domestic stock, 23% foreign stock, 25% bonds, 20% short term, and 5% other based on output from a portfolio X-ray tool. Several managers currently have high cash positions (including ARIVX at the high end of the cash position list for the stock fund investment sleeve). The portfolio includes a set-aside available to be tapped for portfolio rebalancing if the overall portfolio decreases in value by more than 10%. That pot was tapped more than once in 2008 when the overall portfolio experienced a 16% loss.
Every person with investable assets has to find his or her own way through the investment maze based on their individual circumstances and temperamants. Fortunately, it can be an interesting and rewarding way to "spend" some of our time!

Reply to @MJG: >>>> I have been a long advocate for these workhorse financial tools, and have been surprised at the reluctance of an MFO minority who persistently resist application of these proven tools. Thank you for referencing these noteworthy Monte Carlo simulation programs.<<<<
I am in a great mood tonight. Found several old historical cemeteries on my off trail hike today. So, this is not meant in a mean spirited tone, albeit it may sound like such. We have been through this before. But what you don't and never will get (can you say inflexible) is some of us have no need whatsoever for Monte Carlo mumbo jumbo. That's because instead of obsessing about retirement probabilities/tools/statistics, etc., we were obsessing with an *insane focus* on the markets and compounding our trading/investment capital to such an extent that all that stuff would be meaningless.

Reply to @cman: Yessir. I was always prone to overbuilding. I agree with your observation regarding the inherent weakness in the "Monte Carlo" approach, but it certainly seems to be a useful tool as far as it goes. The various spreadsheet disasters that I introduced included inflation, assuming at best a break-even on bond income/at worst negative 3%; and an equity market crash at various times, with various crash percentages (and in fact my worst-case was pretty close to what happened in 2008). Using my home-brew "Murphy Emulator" I engineered the retirement situation to be able to survive those scenarios and (optimistically) ran it out to age 100.
Until the bond markets fell totally apart a year or so ago our portfolio distribution was set up to reflect those possibilities, but now I'm pretty much winging it with a much higher equity and cash exposure than I would have thought probable at this point. As I mentioned, we don't depend upon the investment income for day-to-day expenses, so there's not too much pressure there. Because of the bond situation, and to offset the potential for another equity fiasco, we now have much more in various cash accounts than I ever would have imagined, which for that portion of the portfolio actually results in something pretty much like the 3% inflation loss that I had anticipated as a possibility. Hopefully that will sort itself out in the not-too-distant future.
Crystal balls are hard to come by and prone to erratic behavior at best.

Reply to @Old_Joe: What you did is called stress testing that is gaining interest in the RIA community because of new vendor tools as an alternative or complement to Monte Carlo Simulations. The latter was an improvement over previous method of assuming some average returns but it has serious problems in inputs and interpretation.
A serious problem for an investor is not calculating the probability for success/failure but understanding what a failure might imply for their life. If you are just told you have a 80% chance that you will not outlive your assets, it is very different from being told you will probably do OK with 80% chance but there is a 20% chance that you may have to sell your house and move to a cheaper town if there was a recession like the previous one. People may make very different decisions and not feel betrayed when the very low probability event happens and can be prepared for it. There are vendors who have created platforms to stress test for various combination of events and variables and test a financial plan for it. Not sure what is available for retail investor use. This is a much more comprehensive test than the spreadsheet calculation you did but similar in intent. While stress testing tools have been around for a while, their use became more obvious after the last financial meltdown where the use of MC to price/test anything from CDOs to portfolios was shown to be useless because it didn't prepare people on how to manage low probability events if they were to happen. We don't build bridges and aircraft that way.
I have a strong suspicion that these "increase equity with age" will not fare so well in stress testing scenarios and the implications in some of those scenarios.
I am sure over time these stress testing tools will become as common as these retirement planners. However, they are all dangerous for DIYers to interpret in the same way medical lab tests are dangerous for non medically trained people to interpret and so primarily for entertainment than making any serious decisions. Self-diagnosis of medical health is as bad as self-diagnosis of financial health except in the case of plentiful health with sufficient margins to survive when the self diagnosis was bad!
Practically, the goal should be to overcompensate as much as possible or arrange the circumstances so that the available resources overcompensate in the same way bridges and aircraft are over-engineered much above and beyond what tests and simulations suggest.

Reply to @bee: Pretty much what we did also. Years prior to retirement divided our expenses into a number of categories so that we could see what was going where; what was essential, and what was discretionary. (Wine consumption was a pretty big number under "discretionary". :-))
Then ran the same types of numbers you did re potential income sources.
Then plugged in a whole lot of variables, including many "worst case at worst time" scenarios (foreseeing 2008, as it so happened). This may not be pure "Monte Carlo", but it worked pretty well for us. Couldn't have done it without a spreadsheet, though.
So far so good- our income, exclusive of any investment gains, still exceeds the outgo. No complaints at all, and now we are able to use good investment income years (like last year) for major projects such as housing maintenance and remodeling.
I'm probably still too conservative on the investment exposure side, but we do sleep well.
Right on with "The biggest gift of retirement is the gift of time." Absolutely true!

Reply to @bee:
Hi Bee,
You surely contributed an excellent and useful post.
I am very pleased to read your endorsements of the various Monte Carlo simulation products. I have been a long advocate for these workhorse financial tools, and have been surprised at the reluctance of an MFO minority who persistently resist application of these proven tools. Thank you for referencing these noteworthy Monte Carlo simulation programs.
The referenced research paper and its recommendations are themselves the outcomes from a series of Monte Carlo calculations. The WSJ article exclaims that 10,000 cases were completed in the analyses. That may appear to be a large number, but not so when making randomly selected investment returns trials. To assure small methodology errors, Monte Carlo studies usually do large multiples of 10,000 cases.
We are definitely on the same page, and likely even within the same paragraph, when you astutely observed that “The biggest gift of retirement is the gift of time”. Yes it is.
I consider “time” is my most precious resource. That acknowledgement was one significant factor in my decision to cutback on the time I committed to my investments. Index products fit snuggly into that framework.
There is a very positive aspect with the passage of time at my advanced age. The price continues to decrease. According to Longevity Tables, I pay only about one-half year in expected lifespan for each year that I survive. That’s not a bad tradeoff.
I really enjoy these brief exchanges.
Do well and stay healthy.
Best Wishes.

Good points in this article.
I would add that positioning these "equity investments" inside a Roth IRA eliminates future income tax on distributions avoiding "portfolio losses" due to RMD (@70.5). Required Minimum Taxable Distributions at the wrong time are just the same as taking any other distributions at the wrong time. With a Roth you decide when to take a distribution, not the IRS.
Here are three retirement Calculators that might be helpful to readers (may require certain plugin such as java):
Vanguard's Nest Egg Calculator:
NestEggCalc
The Ultimate Retirement Planning Calculator:
best-retirement-calculator
Flexible Retirement Planner:
flexibleretirementplanner
On a separate note related to retirement:
Before I retired I spent a number of years determining my basic retirement budget needs. Bare bones living...food, shelter, taxes, utilities, healthcare, entertainment, etc. I starting living within these means which happened to be much lower than my current income. I saved the difference and experienced what life would be like on a smaller income. If this happened to be too uncomfortable I still had my job to fall back on.
Also, prior to retirement, I ran a bunch of number related to where my retirement income would be derived...social security, pension, immediate annuity, rental income or part time work. I now had an idea of my income needs and I better understood the sources of my the retirement income. Beyond all of these decisions are are some bigger questions to answer.
Each of us have to give some serious thought to retirment lifestyle decisions...all the things you put on hold or did sparingly because time was limited. The biggest gift of retirement is the gift of time. How will you spend the most valuable resource of all...time.

Reply to @bee: I didn't follow Weiner's advice before the Vanguard version closed but I invested when the Primecap Odyssey funds opened and have not been disappointed by their performance since. Have recently had some concerns with the death of one manager and announced retirement of another so will be monitoring for any impacts going forward.

FYI:
Regards,
Ted
http://online.wsj.com/news/articles/SB10001424052702304866904579268332305015074#printMode
The Study: http://www.fpanet.org/journal/ReducingRetirementRiskwithaRisingEquityGlidePath/