• "Pointing the Way to Retirement Income Security"
  • "Breaking Through the Investment Return Barrier"

The Sequence of Return Risk:
How It Can Make or Break Your Retirement

If the title of this article seems odd to you, then the recent headlines rejoicing the new stock market and average retirement plan balance all-time highs are likely still fresh in your mind.  But, then I bet you haven' read the most recent (March 13, 2013) Employee Benefit Research Institute (EBRI) Retirement Confidence Survey that confirms a record number of people feel they will NEVER be able to retire.

How can all of this be true at the same time?

The EBRI's 2013 survey, the longest-running survey of its kind, reported the highest level of respondents ever recorded during the 23 years they have been doing the survey—or nearly 30%—feel that they will not be able to "afford a comfortable retirement." A recent Pew Research Center survey reported that number closer to 40%.

And, what about the rest of the America? They're all feeling great, right?  Well, except for a scant 18% who DO feel they will reach their definition of Retirement Income Security—a record LOW—the rest of Americans are firmly stuck in the sand of indecision. The survey reports that nearly half of Americans (48%) "have not even tried to calculate how much money they will need to save by retirement." If this seems sad, (or avoidable), even sadder is that most of the 18% who do feel they will be "comfortable," are likely setting themselves up for some major disappointment if they have defined "comfortable" according to the common "wisdom" of being able to live off 40-60% of their pre-retirement income.

Jack VanDerhei, EBRI's research director and co-author of the survey, "absolutely" foresees a retirement crisis in the coming decades—the same situation that the Compass Institute began to address over 15 years ago. "Regardless of what happens," he says, "I think you're going to have individuals getting to that retirement age they select and basically spend down their retirement assets too quickly."

So how is it that the markets can be showing so much promise when at the same time, for a record number of people, retirement income security is a pipedream rather than a real possibility?

There is a record amount of money sitting on the sidelines observing this golden opportunity sail on by.  The truth is that the stock market gains you are reading about are only being enjoyed by very few.  Fortunately, amongst those few are Compass Investors HORIZON™ and Reallocation Strategies ReallocateRight™ subscribers who, guided by the Adaptive Asset Allocation™ strategy developed at the Compass Institute in the late 1990's, have been 100% invested in the stock market since October of last year.  While everyone else was running for cover due to impending debt ceilings, fiscal cliffs and sequestration, our non-emotional investing strategy observed that the equity markets were not similarly headed for cover. In fact, just the opposite has happened; while the public has been pummeled by gloom and doom, the stock market has handsomely rewarded those who invested accordingly with record gains.

While taking emotion OUT of the equation and capitalizing on the strong upward movement clearly demonstrates the value of our Adaptive Asset Allocation™ strategy, perhaps of even greater value is the HORIZON™ service's ability to move subscribers out of the way of the speeding train of the down market that will eventually follow. Without the benefit of our analysis, sent every five weeks, that will clearly tell subscribers when is it time to head to the sidelines, those jumping onto the stock market bandwagon now might experience some additional growth, but likely will give it back—and more—when the inevitable downturn arrives.

Of course no one knows when the next down market will occur. But, in the mean time, Compass Investor's subscribers will enjoy the ride for as long as it lasts, and then receive a non-emotional, clear message when it is time to retreat comfortably out of the stock market, having added substantially to their portfolios during the up market, and ready to do it all over again when the cycles repeats.


To learn more about our Adaptive Asset Allocation solution, HORIZON™ please visit us on the web at www.compassinvestors.com.

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"The Sequence of Return Risk:
How It Can Make or Break Your Retirement"

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