Today Show 'Expert' Misses the Mark on 401(k) Investment Advice

Today Show 'Expert' Misses the Mark on 401(k) Investment Advice

GRAND RAPIDS, Mich., Nov. 17 /PRNewswire/ -- Investment advisors Richard Michaud and Robert Smart, designers of the RetirementSmarts.com system of allocating retirement investments, today expressed astonishment at advice given to 401(k) investors by NBC Today Show guest David Murray.

"Mr. Murray said he tells clients to take their age and put the corresponding percentage of their portfolio into conservative investments. The strategy recommended by Mr. Murray is a very crude form of diversification or asset allocation, and it is unlikely to produce very good results," Smart said.

"Proper asset allocation is a precise combination of the various plan investment options, including company stock. This process begins with an analysis of how the performance of each of the plan investment accounts have related to one another as markets have gone up and down. Next, we perform thousands of simulations of potential future outcomes for each asset to account for uncertainty of results. These outcomes are then averaged together. The result is a smooth curve of discreet combinations of risk and return that are matched to employee preferences," explained Dr. Michaud, president of New Frontier Advisors. "To apply a singular percentage and suggest that it works in every situation is simply not accurate."

Mr. Smart of RetirementSmarts.com, added: "It is a shame to advise people to use some 'system' that will produce poor results when (for $10-$25/year) there is a patented tool available that creates an asset allocation individualized to the user's personal goals and tolerance for risk, and has been proven to produce the highest return. If millions of people earn less on their retirement plans than they could because they rely on simple notions like the one offered by Mr. Murray, not only will their futures be impaired, but also the entire economy is harmed because they will have a lower standard of living. Investors deserve better advice than that."

Source: RetirementSmarts.com

CONTACT: Dan Calabrese, +1-616-235-9582, for RetirementSmarts.com

Web site: http://retirementsmarts.com/

NOTE TO EDITORS: To arrange for an interview with Mr. Michaud and/or Mr. Smart on this issue, please call +1-616-235-9582 or e-mail dan@northstar-pr.com .

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