By reading through the earlier pages you should have learned about the lurking danger in a secular bear market from buying and holding stocks and, to a lesser extent, bonds. A conservative asset allocation reduces a good portion of the risk, but there is still a meaningful amount remaining. Also, investment returns, particularly during strong markets, are likely to be significantly reduced by reduced exposure to stocks.
Consequently, if one wants to reduce risk even more while preserving the potential for good investment returns, a tool in addition to asset allocation is needed. The preceeding pages show how two simple tactical risk reduction models operating on basic portfolios provide that tool in a highly advantageous way.
No claim is made that the models behind the investment results shown are unique or that there are not other models that can fill the intended purposes, perhaps even better. They are certainly far from perfect, but the models MDP Associates uses to manage portfolios are simple. Keep in mind that simple models are more likely to continue to be effective than more complex ones, some of which look good only because they were designed to handle a few extreme market periods quite well. Moreover, the models have been tested over a very long period--42 years--and in a wide variety of market conditions, including the last complete secular bear market (1966-81 in terms of calendar years) and the last complete secular bull market (1982-99).
Surveys have shown that many plan participants crave advice on how to invest to meet retirement goals. That means you have an opportunity to provide a valuable service and welcome benefit that will increase employee morale. MDP Associates stands ready to help when you decide to provide a truly independent guidance service to your plan participants. In addition to the services on the linked pages, we can conduct educational seminars and consultations or provide you with newsletters and other materials for distribution to plan participants.
Investors with sufficient interest and willing to take the time to do the required research and development have a good chance of finding decent risk reduction models for themselves. Doing so makes for an interesting and worthwhile avocation. Most investors do not have the time or the interest, so taking advanatage of another's efforts is a good idea for them. That is where MDP Associates can be of service.
We realize that one size rarely fits all and different investors are likely to want different levels of support. We provide two basic alternatives, which are discussed on the linked pages: