Asset Allocation Education Module
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One of a suite of individual retirement education modules created for Nationwide Financial, the Asset Allocation Education Module helps a plan participant understand the importance of diversification. The module system gives retirement specialists the ability to create longer, fully customizable presentations by allowing them to mix, match and combine individual modules in the suite. This enables the sales force a greater flexibility in planning meetings and answering individual plan and participant needs.
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Asset Allocation Education Module
- 3. Asset Allocation 3 Asset allocation does not guarantee returns or insulate against potential losses. Investing involves market risk.
- 4. Asset Allocation 4 International Small-cap Mid-cap Large-cap Bonds Short Term Investments PotentialReward (Thechancetomakemoney) Potential Risk (The chance to lose money) Investing involves market risk.
- 5. Asset Allocation 5 Source: West, Saylor and Anthony. The financial Professional’s Storybook, Advisor Insights Press. 2003.
- 6. Neither Nationwide® nor any of its representatives give legal or tax advice. Information provided by Retirement Specialists is for educational purposes only and is not intended as investment advice. Nationwide Retirement Solutions, Inc. and Nationwide Life Insurance Company (collectively "Nationwide") have endorsement relationships with the National Association of Counties and the International Association of Firefighters-Financial Corporation. More information about the endorsement relationships may be found online at www.nrsforu.com. Nationwide Retirement Solutions, Inc. and its affiliates (Nationwide) offer a variety of investment options to public sector retirement plans through variable annuity contracts, trust or custodial accounts. Nationwide may receive payments from mutual funds or their affiliates in connection with those investment options. For more detail about the payments Nationwide receives, please visit www.nrsforu.com. Retirement Specialists are registered representatives of Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation. Nationwide, the Nationwide framemark, and On Your Side are service marks of Nationwide Mutual Insurance Company. ©2012 Nationwide Retirement Solutions Inc. All rights reserved. NRM-6598AO.5 (12/12)
Editor's Notes
- Every so often a plan participant comes in and says that a buddy of his is investing in X fund and that he wants to do the same thing. But there’s no such thing as a universal investing strategy. Every investor is different. And so are all the ways you can invest.Experts suggest having various types of investments, not just one kind. That’s because all investments go up and down in value over time, but not all at the same time. But how do you know where you should invest your assets?
- First, ask yourself how comfortable are you with market risk? And next, how long do you have until you will actually retire and start withdrawing money from your account?Knowing the answer to these two questions can help you determine what your “asset allocation” strategy is – and in turn, help you commit to a long-term investment discipline because your market risk can be minimized without having to miss out on potential returns.
- How many of you have been stuck in the snow or mud? Nothing sells a four-wheel drive vehicle better than getting stuck. Because with four-wheel drive, if one wheel slips, you have three more opportunities for traction. Asset allocation is like a car with four-wheel drive. Without it, if something happens to a fund and all your money is invested in that one fund, then you’re spinning your wheels.But if you spread your money out among different funds, you potentially lessen the risk of losing all your money. Remember, asset allocation can’t guarantee returns or insulate you from potential losses, but it can help you manage risk and maybe keep you on the road to retirement.Asset allocation is just a fancy way of saying that the money in your Plan account should be invested in different types of investments since there can be unpredictability in the market.
- While asset allocation cannot guarantee returns or insulate against potential losses, it can help you manage risk. And that’s why a smart investor uses an asset allocation strategy that matches their comfort with risk and the length of time until they retire.Each one of these investment types has a job to do, or purpose. The purpose of a stock is to grow. A bond’s purpose is to produce income. And cash is meant to not fluctuate in value. You’ll also hear cash investments be described as being “liquid,” which means it is more easily accessible.Each investment type also has risk associated with it. This chart illustrates potential risks and returns typically associated with each asset class. As you can see, generally, the more potential to earn money, the more chance there is to lose money within the same class. The most important thing to remember about asset allocation is that the mix makes the difference – your money should be invested in different types of investments, not just one kind.
- While asset allocation cannot guarantee returns or insulate against potential losses, it can help you manage risk. And that’s why a smart investor uses an asset allocation strategy that matches their comfort with risk and the length of time until they retire.Each one of these investment types has a job to do, or purpose. The purpose of a stock is to grow. A bond’s purpose is to produce income. And cash is meant to not fluctuate in value. You’ll also hear cash investments be described as being “liquid,” which means it is more easily accessible.Each investment type also has risk associated with it. This chart illustrates potential risks and returns typically associated with each asset class. As you can see, generally, the more potential to earn money, the more chance there is to lose money within the same class. The most important thing to remember about asset allocation is that the mix makes the difference – your money should be invested in different types of investments, not just one kind.