- Traditional Pension Plans
- Talk With Your Employer
- Ask About Plan Features
- Self Employed
- Company Doesn't Offer a Plan
- Company Doesn't Offer a Match
- Employer Matching
- Catch-up Contributions
- Automatic Enrollment and Increases
- Your Plan in a Volatile Market
- Feed Your Retirement Plan
- Understand the Market
- Review Your Retirement Plan
Now is the time to review your retirement plan investments
Your retirement plan investment portfolio needs to reflect what’s happening in the market today, as well as what’s going on in your head.
The current economic turbulence is not the time to close your eyes and hope for the best. Instead, look at it as an ideal opportunity to evaluate the four major elements that make up your investment plan:
1. Your mindset. Have your investment goals, ability and willingness to handle risk or investing time frame changed? If so, consider adjusting your investment choices accordingly.
2. Your investments’ returns. Compare your investments’ performance to other similar investments. An accepted way is to use a related benchmark index. Three popular indexes are the Standard & Poor’s 500 Index1 (large company stock index), Russell 2000 Index2 (small company stock index) and Wilshire 5000 Equity Index3 (large and small company stock index).
When reviewing market index performance, keep in mind that:
Market indexes aren’t managed, so they don’t reflect the deduction of
any investment fees or expenses
The indexes aren’t investments you can purchase or invest in
Their performance is not an indicator of how your individual
investments performed in the past or how they’ll perform in the
- Most investments will have down years now and then, so look at their returns over multiple years
3. Your investments’ styles. Find out through prospectuses or other product materials how your money is invested. Has the investing philosophy shifted from growth companies to undervalued companies or from small to medium-sized companies? If so, consider shifting your money to investments consistent with the investment styles you originally chose.
4. Your asset allocation. The mix of your investments among categories (stocks, bonds, cash equivalents) can change over time, depending on each investment’s performance. When one category outperforms others, its assets grow at a faster rate, resulting in a higher percentage of assets allocated to that category. When this happens, you might want to shift your investments among the categories to return to your earlier preferred investment mix.
Asset allocation is an investment strategy to help you diversify your portfolio and mitigate investment risk. It does not guarantee a profit or protect against loss in a declining market.
Want additional information?
Learn more about these and other financial issues on the Investment Resource Center. Or talk with your employer, retirement plan administrator or investment professional.
1 The Standard & Poor’s Index is an unmanaged index of 500
widely held stocks of large U.S. companies. It gives a broad look at how
the stock prices of those companies have performed.
2 The Russell 2000 Index is an unmanaged index of approximately 2,000 companies with small market capitalizations relative to the market capitalizations of other U.S. companies. Small company underlying funds involve increased risk and volatility.
3 The Wilshire 5000 Index is an unmanaged index that measures the performance of all U.S.-headquartered equity securities with readily available price data.
Not a deposit • Not FDIC or NCUSIF insured • Not guaranteed by the institution • Not insured by any federal government agency • May lose value