Safeway 401k

 
All investment options are diversified mutual funds except Safeway stock.                                    
 
Traditional asset allocation theory recommends investing in multiple asset classes of unrelated investment types, such as equities, bonds and cash. Using Modern Portfolio Theory we provide the following traditional asset allocation information for you to construct your portfolio.
 
Use your own perception of your risk tolerance, other assets and income sources and your proximity to retirement to select an allocation that is appropriate for your circumstances.
 
Typical asset allocation models are presented here for your reference.
 
                           Aggressive             Balanced                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…”
 
However, in the 2008 market all asset classes, except cash, were highly correlated and declined in value. The list below of your investment choices shows which investments have been the strongest performers recently, relative to the choices available within the plan.
 
While past performance is not a predictor of future returns, it may provide you with some reassurance that your current investment selections remain within favored market segments.
 
Any employee using this relative strength listing as a tool for allocating a retirement portfolio should check at least quarterly for new ranking updates that may indicate a change in investment selection.
 
Whenever a plan does not provide a money market or stable value choice for your use, the shortest term fixed income option is the recommended alternative.
 
Diversification is still good process. We do not recommend investing in less than five of the available options as long as they rank higher than the money market. If money market is ranked #3, it implies 60% money market and 20% in each of the two higher ranked assets.
   
Investment options are ranked by relative strength over the past ten weeks.
 
The choices listed are the investments selected by your company's plan trustees. This screening process excludes the BGI blended funds due to insufficient information.
 
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.
  
June 30, 2010
Do not invest in assets ranked below Money Market
If diversifying into the top five assets:
Adjusted Risk Profile: Growth 
Rank
Symbol
Description
Asset Class
1
RS Partners Y
Small Cap Blend
2
Forward Growth A
Small Cap Growth
3
Safeway Inc.
Consumer Staples
4
PIMCO Total Return Admin
Quality Intermediate Bond
5
SSgA S&P 500 Index
Large Cap Blend
6
Money Market Proxy-13 Week T-Bill
Stable Value
7
Dodge & Cox Stock
Large Cap Value
8
Chesapeake Core Growth
Large Cap Growth
9
EuroPacific Growth Fund R5
Foreign Large Growth
 
 
Starting at the top of the list in descending order, the selected investment options have, during the past ten weeks, generated returns greater than being in cash (MNYMKT).
 
It is our opinion that investing success is more likely when you are not emotionally attached to them. 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.
 
 CLICK HERE to see how market rotation would have reduced the impact on your account from the 2008 financial crisis.
 
DISCLAIMER:
This information is provided by Investor Resources, Inc. , a registered investment advisor, and is believed to be from reliable sources, but no guarantee is made as to accuracy or completeness. The investment securities and strategies discussed are not necessarily suitable for all investors. Recommendations are of a general nature, not based on knowledge of any individual's specific needs or circumstances, and there is no intent to provide individual investment advisory, supervisory or management services. Investor Resources, Inc. is not a representative of of Safeway, Inc. or its retirement plans.