Accumulating Assets During Working Years

Accumulating Assets During Working Years

Most people know the keys to a comfortable retirement are saving as much as they can during working years and investing it wisely. As demonstrated by the success of Target Date Funds (TDFs) in 401ks, with $2 trillion and growing, a wise investment program is aggressive when you are young and becomes increasingly protective as you age and get closer to your retirement date.

GlidePath Wealth Management is a unique asset management firm that provides personalized Target Date Portfolios that let you decide how much emphasis you place on growth and safety over time to achieve your goals. 

This is an important distinction. A Target Date Portfolio can be tailored to your personal requirements, risk tolerance, and goals. By contrast, Target Date Funds in 401k’s are mutual funds that treat all investors in a particular fund the same (one-size-fits-all). It is pretty obvious all investors in a particular age group are not the same. There can be substantial differences in their requirements, risk tolerances, and goals.

We use our patented Safe Landing Glide Path as a template for guiding you through financial decisions during working years. Our “glide paths” set investment allocations that evolve over  time. Our patented design emphasizes broad diversification and rigorous risk controls that have been used successfully for more than a decade in 401(k) plans. 

We bring institutional-quality investment management services to you. As popular as Target Date Funds have become over the past 10 years, much of their popularity stems from investors making default investment elections. For example, rather than picking several mutual funds to manage their money, they simply select a Target Date Fund based on the year they plan to retire. The Target Date Fund makes asset allocation and investment selections for them. In effect, these funds are used by people who do not want to make these investment decisions. Trustees of plans like Target Date Funds because they represent a default decision for plan participants who do not want to be involved.

By contrast, GlidePath’s Target Date Portfolios are for more sophisticated investors who want portfolios tailored to their specific needs. GlidePath provides a personalized service that evolves with the needs of our clients.

Most investment advisors place you in one of a handful of “model portfolios” that have different risk characteristics. Your risk tolerance is mapped into an off-the-shelf model that is based on very general descriptions of risk (conservative, moderate, aggressive). These models miss a very important aspect of you, namely your age or the ages of both spouses. 

GlidePath avoids cookie-cutter solutions by integrating your age with an appropriate level of risk for your needs. The words that are used to express this integration are combining your “willingness to take risk to earn higher returns” with your “capacity to take risk” based on your individual circumstances. 

Why does GlidePath put so much emphasis on risk? We have found most people want competitive rates of return that are consistent with their tolerance for risk. The tolerance factor is based on their dependence on the assets that are being invested in the securities markets. This tolerance declines as they age.