Retirement Planning Consultants <ul><li>Confused, overwhelmed, disappointed with the investment process and don’t know where to begin? </li></ul><ul><li>As you may have discovered, investing isn’t all that fun for the average investor. What options do you have? </li></ul><ul><li>You can do it on your own. But, how good are you on picking from tens of thousands of stocks, bonds and mutual funds that are available? </li></ul><ul><li>One financial writer calculated that if you stay up on the news in the press, magazines, online and cable, you'll be exposed to at least 42,000 "tips" every year from pundits and ads. How do you sift through all of that confusing information? </li></ul><ul><li>What do you --- the average investor, need to know about saving - investing for retirement? </li></ul><ul><li>There are no investment gurus. A magic formula that will help you to build your nest egg does not exist. </li></ul><ul><li>History shows us that the experts that you see on TV or read about in print cannot produce above-average returns on a regular basis. But, they will charge high fees and expenses that will under perform a totally unmanaged index mutual fund – a fund that charges low expenses and just buys and holds all or a representative sample of all of the stocks in a broad stock market index. </li></ul><ul><li>More than a hundred years of academic research has concluded that index funds are an investors best investment. Why? </li></ul><ul><li>Studies have repeatedly shown that over the long haul, index funds perform better than thousands of other competing mutual funds. Index funds have regularly produced rates of return exceeding those of active managers by close to 2 percentage points. The reason? Management fees and trading costs. </li></ul><ul><li>They are cost efficient. Funds that mimic indexes always have lower fees and expenses because of their passive investment style. You don’t have to pay high priced managers of actively managed funds to pick stocks for the fund. </li></ul><ul><li>The expense ratio of the average index fund is below 0.2%. The expense ratio for an actively managed fund is 1.52%. Research on mutual fund performance shows that paying above average expenses makes above-average performance less likely. </li></ul><ul><li>Expenses don’t enhance performance. They erode it. Every $1 dollar you pay or lose now costs you not only that $1 but also the amount that $1 could earn over your lifetime. </li></ul><ul><li>Why use index funds? </li></ul><ul><li>Returns from index funds are predictable. They do not prevent losses when the market declines but you know beyond doubt that you will earn the rate of return provided by the stock market. With index funds, you capture the entire return of each asset class. </li></ul><ul><li>By using index funds, you use a simple, time-tested, low-cost, easy-to-understand, do-it-yourself, low-stress, uncomplicated approach to building your nest egg. Your – low maintenance portfolio does not require worrying about your investments on a day-to-day basis. </li></ul><ul><li>The S&P 500 Index outperformed almost two-thirds of large-cap active funds in the five years through 2005. The S&P Mid-cap 400 index bested 81% of mid-cap managers and the S&P SmallCap 600 topped 72% of small-cap manaagers. </li></ul><ul><li>What’s the difference? Actively Managed Funds or Passive Index Funds? </li></ul><ul><li>In an actively managed fund , the manager will try to pick individual securities (stocks and bonds) that will perform better than the market. </li></ul><ul><li>However, beating the market is due to luck not a skill that is repeatable. Studies show that only about 3 percent of active managers beat an appropriate index over a ten year or longer period. It is nearly impossible to predict which manager will get lucky and beat the market. Investors who have been lucky in the past should not expect a continuation of their good fortune in the future. </li></ul><ul><li>Passively managed index funds do not attempt to beat the market. They will seek to match the returns of a specific stock benchmark or index by buying representative amounts of each security in the index </li></ul><ul><li>In a 2004 report on investment behavior, Dalbar Inc, a financial-services research firm, found that over a 20 year period, the average equity investor earned 2.57% annually , compared to 3.14% inflation and the S&P 500 index investor earned 12.22% over that same period. The gap between the average active investor and the market is 9.65% a year. </li></ul>Saving – Investing For Retirement- A Simple Approach That Works An easy, step-by-step, time-tested process for building your retirement nest egg. . Presents: A Brand New Workshop For 2006
In our workshop you will learn how to utilize ten simple, lazy, low-maintenance investment portfolios that utilize index funds. Many investors are a bit wary of the concept of investing in the entire stock market average as represented by an unmanaged index stock mutual fund. However, some of the most sophisticated investors in the U.S., the administrators of institutional pension funds, invest billions of dollars in index funds because of their long term returns and low cost. They are the people who have the responsibility to do the right thing for many thousands of employees who are counting on their pension fund when they retire. There are a number of approaches you can take . In our workshop we will look at and discuss 10 simple, lazy-low-maintenance portfolios. What is the aim of this approach? It is to produce a portfolio of low-cost mutual funds investing in asset classes that are likely to outperform the S&P 500 Index and many, if not most actively managed mutual funds. In addition, we will examine and discuss such questions as ---- What is your greatest fear about retirement? ---How long will you live – how long should you plan for? ---How much money you will need to live on in retirement? --- Where will the money come from? --What is your personal tolerance for risk? Are you a conservative, moderate, aggressive investor? How should that influence how you allocate your assets? You will also participate in a risk assessment test that can help you to determine your tolerance for risk in investing. What kinds of assets will give you the returns you will need to achieve your goals---How do you combine those assets in the right proportions into a portfolio that is tailored specifically for you?- How can you learn to recognize and control the expenses of investing --- How do you develop a distribution plan that will give you the income you need in retirement along with the peace of mind of knowing you won’t run out of money? How can you benefit from our workshop? What we have learned from years of helping people, is that retirement planning - saving - investing is not easy and achieving retirement security requires time, adequate contributions to your plan and your active involvement. We know that you want an approach that is understandable, helpful and believable. We provide un-biased, independent, straight-forward, easy-to-understand and candid information - education that can help you do a better job. Interested in this workshop? Talk to the people in your benefits – compensation – HR office – your retirement plan administrator about this workshop and how it can help you and your fellow employees. Ask them to get in touch with us so that we can bring this informative program to your work place. We think you, the average investor, can gain a great deal from participating in this workshop. Email: [email_address] , phone: 607-255-4405 Index Fund Performance How has the investor in the average mutual fund performed in comparison with an index fund? Burton Malkiel, Professor of Economics at Princeton University, in his book, A Random Walk Down Wall Street , details the results “ In decade after decade, two-thirds to three-quarters of professionally managed funds are beaten by funds that simply buy and hold a broad-based stock-market index.” “ When you buy an actively managed fund, you can never be sure how well it will do relative to its peers. When you buy an index fund, you can be reasonably certain that it will track the index and that it is likely to beat the average manager handily.” Your Workshop Instructor Robert R. Julian, president of Retirement Planning Consultants, is an adjunct instructor at the School of Industrial and Labor Relations at Cornell University. He has also served as Director of Media Services and Director of Management Training Programs at the School. He has taught graduate courses in the area of Organizational Communications. He also conducts workshops and seminars for the university on such topics as planning for retirement, conflict resolution, negotiation, communication. He is the author of RETIREMENT PLANNING HANDBOOK 1st and 2 nd edition, 1998. 2 The average investor earned less than the rate of inflation. The Dalbar study found that investors hold mutual funds for an average of 4.2 years, buying at the highs and selling at the lows. This results in the average investor greatly underperforming the market.