Move your 401(k) to HCM
Retirement and Job Change Educational Power Point Presentation
HCM manages plan participant client accounts inside retirement plans by:
a) by participants hiring HCM, on their own, to manage their account, or
b) by arrangement with the plan sponsor (ex: company management).
HCM's managed options inside a retirement plan
Many plan participants (ex: 401(k) owners) need professional active-management help because the plan participant:
- tends to stay in money market, even in good markets.
- invests in only one fund and don't manage risk. Consider that 25% of Fidelity Investments 8 million retirement plan participants keep all their 401(k) assets in only one fund ("Communication Failure" article by Fran Hawthorne, Institutional Investor, p. 110, April 2004).
- follows the herd and buy last year's winner only to see them fall.
- doesn't actively manage their account(s), even in poor markets.
- wants someone to manage their retirement account for them.
Employers can offer their plan participants independent investment advisor services, of model portfolios, within their retirement plan. The model portfolios offered by HCM consider each participant's time horizon and risk tolerance. The independent investment advisor may be a different company than the 401(k) plan provider. This was determined in opinion 2001-09A December 14, 2001 by the labor Department's Pension and Welfare Benefits Administration.
If you are a plan sponsor or vendor, and would like more information on HCM's Tactical Asset Allocation with Bonds (TAAB) 9 model options to offer to your plan participants, please contact us.
If you are a plan participant not enrolled in one of our advisor-managed retirement plan strategies and would like to be, contact us.
If you are a plan participant enrolled in an HCM retirement plan strategy and you wish to change your strategy, contact us.
Retirement plan participants are on an important journey and active professional management matters.
- Think about retiring at 55 or 75, it is up to you.
- Think about sending your loved ones to a prestigious university.
- Think about living in the North and the South.
- Think about living in a large house.
Think about your retirement!
Investment risks are real: Consider the loss of:
- -37.2% from 1973-1974 in the S&P500 index*
- -41.7% in 20 year government bond total return minus coupon interest (Ibbotson) from 1977-1981*
* (based on a hypothetical one-bond portfolio with an average maturity of 20 years from Michael Muyot, 4/21/2005, Oppenheimer presentation, "Fee Based 1" )
Gains are illusive for some investors.
- From 1-1984 to 12-2000 the S&500 gained 1,300. %+
- while the average self-managed investor gained only 141.%+
+ (Delbar Financial Services, S&P500 dividends always reinvested, can't directly buy index, no expenses. Dividends not always reinvested for self managed portfolios. * From Michael Muyot, 4/21/2005, Oppenheimer presentation, "Fee Based 1" )
HCM provides investment management to individual retirement plan participants that have been established with various custodians. HCM customizes Money Management for Each Plan Participant. This is called HCM's Tactical Asset Allocation with Bonds (TAAB), illustrated below, to manage each participant's retirement plan account. HCM actively manages participant's portfolio, in various mutual funds or annuity sub-accounts available through your retirement plan's custodian. HCM will actively select funds in various asset classes, money market, and bonds for you.
HCM's 9 Managed Options to Meet Plan Participants Retirement Plan Needs
HCM has developed 9 active portfolio management options, see table below, to use with qualified plans to provide personalized risk management for each plan participant. Each participant fills out an HCM risk and time horizon questionnaire. Based on participant's answers to the questionnaire, they are placed in one of nine (9) options. Each risk and time horizon category holds a different percentage of stocks or bonds. As the participant's conditions change, they are able to change their strategy by simply changing a strategy option form with HCM. As illustrated in the table below, the stock percentage increases as the participant's time horizon increases and when the participant's risk tolerance is more aggressive. For example, suppose a plan participant has a moderate risk tolerance, and has a Time Horizon of 7 years to retire. The maximum portfolio equity and bond percentages would be 60% and 40% respectively and the tactical asset allocation model with bonds (TAAB) would be "Intermediate-term Moderate". HCM's active portfolio strategy would invest the equity part in equities and the bond portion in bonds, and either or both parts could be invested or in money market depending on market conditions.
Table R-1. HCM's Tactical Asset Allocation with Bonds (TAAB) Retirement Plan options, consisting of maximum Equity and Bond percentages, for each plan participant is listed below.
Time horizon, years |
Conservative Risk % equity/bonds |
Moderate Risk % equity/bonds |
Aggressive Risk % equity/bonds |
|---|---|---|---|
| 1-5 years | 20/80 Short-term Conservative |
40/60 Short-term Moderate |
60/40 Short-term Aggressive |
6 - 10 years |
40/60 Intermediate- term Conservative |
60/40 Intermediate-term Moderate |
80/20 Intermediate- term Aggressive |
| 10 + years | 60/40 Long-term Conservative |
80/20 Long-term Moderate |
100/0 Long-term Aggressive |
The above retirement plan options are not appropriate for all investors and are not specific investment advice. This material is not recommended for any particular person with circumstances similar to the table. Each investor's portfolio must be constructed and actively managed based on the individual's financial resources, investment goals, risk tolerance, investing time horizon, and other relevant factors. Your retirement agent will work with you to determine whether any of these portfolios are right for you. The categories of Conservative, Moderate, and Aggressive risk are relative.