MICROSOFT 401K
All investment options are diversified mutual funds except for Microsoft stock. Retirement plan information has been provided by Microsoft employees. Fundamentally, we do not recommend investing in assets ranked below money market. Preserve your cash until the assets once again establish a positive bias in their returns and prices.
Matrix updated for 03/30/2012
Traditional asset allocation theory recommends investing in multiple asset classes of unrelated investment types, such as equities, bonds and cash.
Typical asset allocation models are presented here for your reference.
Aggressive Moderate Conservative
CAUTION: USE "PIE CHART ALLOCATION" AT YOUR OWN RISK. THE PROCESS IS NOT DESIGNED TO PROTECT YOU FROM DOWNSIDE MARKET RISK. IT IS THE WAY 401K PORTFOLIOS ARE TRADITIONALLY CONSTRUCTED. KEEP READING FOR A BETTER UNDERSTANDING.
“We’ve been on a roller coaster ride in the financial system and the economy over the last 25 years. It’s going to continue. Now, it’s going to be a roller coaster on steroids. Things can go wrong like it did…May 6th…in the US stock market. ...People need tools to navigate through this. Buy-and-Hold is gone as a basic investment philosophy. You have to watch the financial flows and take some money off the table when liquidity starts to go the other way.” - J.A. Boeckh
Significant insights were revealed in January 2010 by one of the leading proponents of index investing and an icon of the academic community – Ibbotson Associates’ president, Peng Chen. In an interview with Morningstar discussing Modern Portfolio Theory and its dismal 2008 performance in protecting accounts, Mr. Chen said:
“…we also realized that one of the traditional measures in modern portfolio theory, in particular on the risk side, standard deviation, does not work very well…”
CLICK HERE to see how asset rankings have rotated through previous quarters and exposure to the 2008 market melt-down could have been avoided.
Your choices are limited to the investments approved by your company plan trustees. We believe the asset listing was obtained from reliable sources. If there is an update to the available investment listing, please contact us at 800-317-9119 or Info@InvestorResourcesInc.com.
CLICK HERE to see how market rotation would have reduced the impact on your account from the 2008 financial crisis. It is our opinion that investing success is more likely when you are not emotionally attached to your investments. Consider how much pain would have been avoided in the lives of those who were committed to Enron, Tyco, JD Uniphase, GM or Chrysler if they had maintained an objective view of their stocks and willing to let go of them in the midst of market decline.
DISCLAIMER:
Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client or prospective client’s investment portfolio. Historical performance results for investment indices and/or categories generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results.
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