http://www.lagerco.com/manage-your-401k-with-point-figure Using Point and Figure Analysis to Manage Your 401k account with Ric Lager

1. October 2004 STATE OF THE 401(k) ADVICE INDUSTRY or Three Retirees Walk into Wal-Mart, and the first one asks…..

2. “ Will I have enough money in my retirement?” The second retiree asks, “How should I invest my money right now?” The last retiree completes the list of the three biggest questions retired or about-to-be retired investors have. That is, “What do you do when the stock markets change like they have so often over the last few years?”

5. So a buy-and-hold stock portfolio---fully invested, every stock market trading day, from January 2000 to the end of September 2004---lost over 27% in just short of five years. If that is not scary enough, look at the arithmetic involved in “getting your money back.” 27 divided by (100-27) = 36.98 percent. So when you lose 27% of your money, you need a return of almost 37% just to get your investment back. That is a little scary for a soon-to-be-retired investor. This investor does not have the time remaining in his or her career to make those losses up. Those numbers are down-right frightening to an already retired investor. You need your money now, and you and your previous employer are not making any more contributions!

8. None of these retirement plan offerings will work, or were ever designed to work because they don’t provide a retirement plan participant with the information necessary to make informed decisions on how much risk he or she wants to take with his or her retirement plan money. Any stock market investor can make an informed decision if he or she gets the right information. But as the above examples suggest, there is no current delivery system available to a retirement plan participant to get him or her the right information. Retirement plans are set up to benefit the company sponsor---the retirement plan is as low-cost as possible and as free as possible from any future liability on the part of the company. In addition, retirement plans are set up to benefit the retirement plan provider. That provider has a captive audience of employees funding their retirement plans every month with as much money as possible to ensure a safe and secure retirement. The retirement plan sponsor gets paid on the accumulation of these dollars every year. Performance is not important---only the added dollars from plan participants.