RETIREMENT INVESTING: WHAT YOU MUST KNOW

A. LURKING DANGER to your retirement plans

The investment climate changed radically a few years ago. The next 10-15 years are going to look at lot more like 1966-81, which was a "secular bear market" than 1982-99, an incredible "secular bull market." Investors who do not realize this and do not adjust their investment stategies and tactics accordingly are almost certain not to meet their financial goals. For baby boomers, that means not being able to retire at the time or in the manner they want.
• Severe equity losses can destroy the best laid plans. During a secular bear, they are deeper and take much longer to recover.
• See what happened in 1973-74 and 2001-02. Can you withstand stock market losses over 45%?
• Convential advice is little help. Most brokerage houses and Wall Street "experts" advocate such things as buying and holding stocks, dollar cost averaging, and diversifying by adding bonds and/or international investments to portfolios. The first is a recipe for disaster, and the other two may help a little bit, but they are not likely to avoid the lurking danger.

B. HOW TO AVOID THE DANGER

Combining the best ideas from traditional Wall Street thinking (not all of what they say is useless and some authors are well worth reading) with active tactical asset allocation, the risks of losses that can destroy retirement and other financial plans can be reduced to acceptable levels and virtually eliminated for those who are extremely risk adverse or those who are or will soon need to start living off of their investment assets.
• Appropriate asset allocation is the first step.
• Risk reduction models to decide when to invest in an asset class such as stocks or bonds and when not to because the risks are too high. The models employed are fairly simple and tested over a period of more than 40 years so they are likely to be useful investment tools in the future.
• Sample investment return histories for some basic portofios and asset allocations. These show the value of the approach and cover a range from very conservative to moderately aggressive. The most conservative allocation with the use of the models had reasonable returns without a losing year in testing that started in 1963.

C. WHAT MDP ASSOCIATES CAN DO FOR YOU

MDP Associates (Mark Pankin) can help you or your firm manage your retirement plan accounts [IRA, Roth, SEPP, 401(k), 403(b)] to acheive your financial goals or enable employees and plan participates to reach theirs. There are two basic levels of serivce:
• Do it all for you by helping determine an appropriate asset allocation, and then managing your accounts by performing all the necessary analysis and placing the orders needed when a change in the investment in an asset class is needed. The benefits include convenience, not having to pay close attention yourself, and knowing that the needed actions will be taken.
• Help you do it yourself through a quarterly newsletter (printed and mailed or via e-mail) that provides a recap of the past quarter's market action, an overview of the current investment climate, and sample asset allocations for a range of investors. Firms can distribute the newsletter as a benefit to participants in their retirement plans. When changes in investments are signaled by the tactical models, you will receive those via e-mail, or optionally by fax. The models almost always are evaluated with Friday's data, so the signaled actions will be sent to you over the weekend, so you can make your decisions and place your transactions for Monday execution.

• About MDP Associates.

D. Disclaimer and Disclosures. These pages with important information are also reached from some of the links above, but you may want to see them right away. They discuss the nature of hypothetical performance figures and what you should know about them as well as some consumer information for potential clients of MDP Associates as a Registered Investment Advisor.

MORE INFORMATION