Advantage Threshold

Also referred to as "performance margin." The difference between your target PAR and MIPAR at any time. A conservative investor will have a lower advantage threshold than a risk-tolerant investor with a long time horizon. If investing causes some loss of sleep, investors should lower the threshold, perhaps to 1-2 percentage points. For many investors, a 5 percentage point design threshold is appropriate, targeting a 15% overall portfolio PAR when MIPAR is 10%.