YOUR INVESTING STRATEGY OPTIONS

You don’t have a lot of good options as a 401K investor when it comes to your investment strategy.

You can try to do it on your own which is what most people do. The DIY investor generates average investment returns of around 5% to 6% per year. This is not good and will not produce the type of retirement fund you need. It will leave you anxious and uncertain about your strategy and your financial future. Most DIY investors are very conservative but some are more aggressive and put all of their money in stocks. The aggressive 401k investors can generate annual investment returns of 7.5% to 8.0%. But these aggressive investors get crushed in bear markets like 2022.

You can follow the advice of the investment industry professionals and spread your money across a bunch of different assets. They will put you in a variety of stock funds; large cap, small cap, value funds, international funds, etc. They will also tell you to invest in bond funds. This strategy is the equivalent of the Target Date funds or Lifecycle funds that most 401K plans offer. Following this “blended or balanced” approach will give you annual investment returns that are a little higher than the typical conservative investors - somewhere between 6.5% and 7% per year. The Target Date fund investors still don’t get high enough returns to be able to retire comfortably. And Target Date fund investors also get crushed in stock market collapses.

These mediocre options leave 401K investors in a constant state of uncertainty. They know they are not producing good enough results and they live in fear of the next market collapse. It is a big problem.

The investing industry has let people down big time.

Investing is a long term proposition and, as such, investors should be focused on just a few key criteria when deciding upon their investment strategy.

1. Investors should primarily be concerned with the long term average annual investment returns - and long term should be defined as 15 years or 20 years or more. Even ten years of investment performance is not enough time to judge a particular fund or investment choice.

2. Consistency of investment returns should be the second thing investors pay attention to. If two investments (fund A and fund B) both have an 8% annual rate of return over a 20 year time period, the deciding factor should be consistency or volatility. If fund A’s investment performance is more consistent than fund B, fund A should be chosen between the two funds. Consistency leads to more predictability and more dependability.

3. Beyond average annual investment returns and consistency of performance, the last thing investors need to focus on is their strategy during bear market collapses. The only viable option to date has been the old Buy & Hold strategy. If this is your strategy, you need to be prepared to watch your savings drop by about 40% once every six years or so on average. And you need to be prepared to wait about 4 years for your investments to get back to where they were before the market collapsed.

If you are comfortable just “riding it out” during stock market collapses, you can stop here. Just pick the funds with the best and most consistent long term returns and hold on for the long term.

The investment industry’s “non-solution” to the pain and suffering of stock market meltdowns is the blended or asset allocation strategy mentioned above. Occasionally, this asset allocation strategy minimizes losses in bear markets, but not always (see 2022) and only slightly. The rest of the time, it simply lowers your long-term investment returns and the growth of your retirement account.

Wouldn’t it be great if there were a way to generate average annual investment returns of more than 10% per year? With this kind of growth in your investments, you would be able to create a comfortable and secure retirement for you and your family.

And wouldn’t it be great to achieve these high returns AND protect your hard earned savings from big losses during market meltdowns?

This is why we introduced our Beyond Buy & Hold system. We put our customers in most consistent high returning investment options AND we provide protection of their savings when the stock market collapses. It generates market beating investment returns because it avoids the big losses during bear market crashes.

When the stock market is in a long-term uptrend (which is 85% of the time), we invest aggressively in the best performing funds. The top funds deliver average annual returns of 15% to 20% per year during these upmarkets. Capturing these high gains in the up-cycles does wonders for your retirement account. Our system doesn’t beat the market during these times because we are investing in the broad market via the index funds. But we are able to capture the full amount of the high returns during these periods. Most investors capture only about half of these gains because they are using a balanced approach or an asset allocation strategy.

But we can beat the market during the bear market crashes that occur about 15% of the time. We do this by losing less money, not by making money. Bear market crashes produce losses at an annualized rate of 39%. We look to lose 10% or less in these down cycles. So we beat the market by losing less and our customers don’t have to watch their life savings drop like a rock. The emotional benefit can be as powerful as the financial benefit while the markets are collapsing.

The people that follow our system and strategy are able to create the retirement of their dreams and avoid the worry of losing lots of money when the volatile financial markets head south.

401K investors now have a better option - a real option with high growth and safety - something the investment industry has not provided. Click here to learn more about a better way to invest your 401K or IRA account.

Happy Investing,

Phil

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Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.

Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.