401(k), 403(b), TSP, or 457 plans - whatever your employer retirement program, monitoring your own plan takes time. Most financial advisors cost too much for the average investor. And then there’s the risk factor.
That’s where Smart401(k) comes in. Under the direction of our Chief Investment Officer, Adam Bold we provide a credible investment system founded on Nobel Prize winning principles that can help you increase your odds of success. You’ll have the confidence to invest your retirement plan money appropriately for your tolerance for risk. We provide straightforward, bottom-line advice to help you increase your odds of successful investing.
Our services are offered directly to you, or can be offered to you through your employer as an employer sponsored benefit. View a demo of our service to see for your self how you can successfully use our advice to control risk, maximize opportunities, and personally control your own investments.
If you are an employer and are interested in offering Smart401k to your employees, please e-mail us to discuss our available services.
There are a number of benefits to the Smart401k service, but the most important is peace of mind.
An action-plan recommendation describing the percentage of your retirement plan money which should go in each fund. You’ll get a summary of the types of funds to diversify across, and a graphic view of the best and worst returns for your mix of fund types over past years.
Quarterly Investment reviews. Every calendar quarter we update allocation percentages and fund recommendations as necessary. We notify you by email if changes are made to your recommendations.
Unlimited access to the Smart401k.com web site. View your recommendation, modify your investment profile, or explore our resources page with links to the best retirement investing content on the web.
Access to our independent Advisors. Our advisors prepare and update your recommendations. We send notifications through the Internet, but are available through phone or e-mail if your plan changes fund offerings or you have other questions.
Market commentary and education. Every Quarter you’ll receive the Nest Egg newsletter with market commentary by Adam Bold, educational articles about investing, and tips on how to get the most out of your Smart401k subscription.
Retirement investing web links. We’ll connect you to the best investing information and education on the Internet.
Peace of mind. Perhaps the biggest benefit of the Smart401k service is knowing that investment professionals watch over your retirement plan.
There are three major activities we take in preparing and reviewing recommendations for our customers:
1. Establish allocation mixes.
Every three months (at calendar quarter end), our Chief Investment Officer, Adam Bold, reviews and revises our recommendation allocation mixes, which identify which asset categories (e.g. Large Company Growth, or Small Company Value) we will be utilizing, and what percentages we will be recommending between each of the fund categories. We establish different allocation mixes for different levels of risk/investment styles of our customers.
The allocation mixes are established utilizing concepts from the Nobel Prize winning strategies of Modern Portfolio Theory and The Efficient Frontier. Together, these concepts show that asset category mixes are extremely important over time in investment returns. The Efficient Frontier goes on to show that historically, there is an optimum mix of asset categories that has produced the best investment returns for the risk taken. The final ingredient in our allocation formula is the incorporation of our analysis on which asset categories have a better than average chance of gain over the next few quarters. Our analysis in this area is based on past performance of each of the asset classes and current and future market and economic conditions.
2. Select Funds.
We first review what funds are available in your plan – both your standard fund options, and any additional options that may be available in your plan, like self directed brokerage options, which provide you with up to thousands of funds to choose from. We also take into account closed funds and funds that aren’t publicly traded. We review dozens of characteristics and the performance of each fund, and put a premium on the following attributes:
- The Fund Manager’s own track record and his/her tenure with this fund
- Consistency of performance in different timeframes and types of markets
- The “style” of the fund and any style “drift” – whether the fund stays consistent in its type of investments. In this area we weigh the funds performance against its peers and any available index funds. We also weigh how a growth or value fund performs against any relevant, comparable category blend fund (a fund that is similar in category to the fund in question, but is a blend of growth and value investments).
- Fund risk versus its return, and its performance related to overall market moves.
- Fund expenses
- Fund Family ethics and stewardship
We then match funds up with the asset categories that we have chosen to recommend for our customers this calendar quarter. We may adjust the fund/category recommendation based on the overall mix of funds we like in your plan, to optimize our overall recommendation for your options.
3. Determine your acceptable level of investing risk based on your personal situation.
Your acceptable level of risk can be defined as your willingness to lose your investment principle in return for the chance to increase the overall performance of your investment. Points are awarded for each answer you gave in the questionnaire. The more “safe” your answer, the lower the points awarded. Based on your total score, a “risk level” is assigned to you. Your assigned risk level helps determine how to allocate your investment dollars among the recommended funds in your retirement plan. If you have special circumstances or simply wish to review your investing style and risk with one of our advisors, we encourage you to call us.
After you complete your investing profile questionnaire, all three of these analysis steps are combined to give you your recommendation. We are monitoring the fund choices and options for all of our customer’s plans on at least a quarterly basis, and adjust our allocation percentages quarterly as well.