Compass Investors' Adaptive Asset Allocation™ Offers Forward-Thinking, Alternative Strategy for Retirement Plan Sponsors
KENILWORTH, IL Feb. 13, 2007 /PRNewswire/ -- Recent article in the Plan Sponsor Council of America (PSCA) national publication, Defined Contribution Insights, outlines a proactive, market-driven approach to 401K/IRA/mutual fund portfolio management
Compass Investors, the company behind the highly successful Horizon™ investment service, is working to change the traditional "steady as she goes" mindset of retirement investing. Many financial planners still advise a goal of 40-60% income replacement during retirement, but that number courts the documented danger of outliving one’s retirement savings, or what Compass Investors call "retirement income security risk." An estimated 83% of American households now face this risk. Compass Investors resets the goal at 100% income replacement, but applying today's most popular asset allocation strategies, even to properly diversified retirement plans, will never generate the returns necessary to create this kind of nest egg. Compass Investors provide retirement plan sponsors with an innovative, technology-driven investment strategy that promises a real solution to this shortfall, which is faced by the majority of their plan participants.
As described in PSCA's Insights, Horizon™ is designed around the precepts of Adaptive Asset Allocation™, a strategy developed at the Compass Institute in the late 1990s, which entails more frequent monitoring and adapting of investment portfolios to ever-changing market conditions. This strategy has historically provided returns of 11-14%, a necessary investment return needed to achieve 100% income replacement after retirement. For plan sponsors, the ability to offer a retirement plan management alternative that supplements the ever-popular set-it-and-forget-it Target Date and Life Cycle funds (averaging 6-8% returns) is enormously valuable, especially when you consider the amount of time and productivity wasted by employees worrying about their future.
Adaptive Asset Allocation™ offers both a new strategy and a new philosophy for retirement investing. In contrast to the hands-off mindset of traditional approaches, the approach calls for constant vigilance and an interventionist attitude to retirement savings. Adaptive Asset Allocation™ also requires investors to dispense with the notion that retirement is "far away."
The Compass Institute challenges plan sponsors and plan participants to consider four simple recommendations that have been shown to mitigate the Retirement Income Security risk. Performance of Compass Investors' products has been demonstrated through independently audited back-testing against actual market results, not projections. Interested parties can view a chart of Horizon's historical performance here: https://www.compassinvestors.com/Horizonperformance.php.
For free reprints of the PSCA Insights article, "Not Your Dad's Retirement Plan," and the Compass Institute’s whitepaper, “Breaking Bad for Boomers,” email us at [email protected]
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