Many of you have lost jobs, or are worried about your employment. Losing your job is a tough blow to take.
But have you tried seeing the bright side of the current environment we are in? It might be difficult, but I assure you something important. This is the perfect time to take advantage of a complimentary 401k review, and learn about active management.
The History Behind 401ks
To be clear, it’s likely that you participated in an employee investment program.
Investment programs like 401ks were designed to retain key employees, not for their most highly paid advisors. The most highly paid advisors use other programs like deferred compensation, defined planning benefit planning, etc.
The reason 401ks are designed for the “worker” and not the highly compensated individual per say is because they are low cost ways for employers to provide “benefits.” As such, the perks are limited; nearly all 401ks only have a few funds to choose from. This means participants can’t utilize the tens of thousands of investments on the market. And you guessed it – those funds in most company provided 401ks are passive, not actively managed.
We will discuss more in detail active management and why it’s important even though 90% + of 401ks don’t do it. Plus 401ks can do it, it’s just not their business model for the reasons discussed, so they don’t.
When we at Boracchia Wiviott Wealth Partners set up 401ks, we can invest freely; and our clients see superior returns as a result.
First, let’s understand what we are referring to exactly when we are even referring to a 401k.
What Exactly is a 401k
We use the term 401k loosely. It’s essentially a 401(k) if it’s a business, a 403(b) if it’s a nonprofit, or pension plan like a 457 if you are in civil service. While technically arising out of separate legal structures, the general rules around these plans are all the same.
You can even do a quick check of your account yourself ;), and hunker down on what actually works, which we’ll get into below when discussing Active Management. Learning about how you got here and your soon-to-be edge, active management, is important to understand now because most people are losing precious 401k (or other investment dollars) – and getting used to it.
In your company provided accounts, the plunge in your investments has likely gone into the teens, or even 40% – and shouldn’t be.
Meaning, that you contributed to your employer 401k (or the equivalent retirement plan) and maxed out your employer match, if any (likely it’s only 3% as employers over decades have really cut back all benefits).
Whatever amount you contributed to 401k – like dollars, you just observed your account performance from the sidelines, and didn’t have much say at all in where the investments went. You may or may not have met with the 401k provider, but either way that person looks at you as a lead in the magnet of 401k plans. Thus his or her objective as part of the company is really just using 401ks for lead magnets. They are not focused on doing the investments, the investments are managed by completely separate divisions – many who your “advisor” knows nothing about.
Imagine this, like most:
Did you do the typical “set it and forget it” that nearly everyone does although they don’t quite realize they did it?
In “Set It and Forget It” you chose a fund from the beginning and have been riding it out ever since, thinking you are doing what you are supposed to be doing because your advisor probably said you’re in it for the long-haul.
That’s why you see all the statistics about 401k performance being down, and other passively managed assets like the S&P 500, NASDAQ, DOW, the list goes on.
“Set It and Forget It” is adding to your anxiety, be truly free by turning over your assets to the most caring team, Boracchia Wiviott Wealth Partners” who also ask access to the full market of investments where you can actually thrive.
The S&P 500, which consists of the 500 Largest Companies, is down 23% Year To Date.
The Dow Jones known as the Dow Jones Industrial Average that has long been synonymous with the stock market, and tracks industries, is down 18.57% Year to Date.
There are 30 blue chip companies in the Dow Jones.
The NASDAQ, which represents mainly technology and financial companies, but also real estate investment trusts and more, is down 30.53%
There are thousands of companies in the NASDAQ.
The NASDAQ, Dow Jones, and S&P 500 generally are what people refer to when they refer to the stock market.
However, the stock market is vast – and all these three exchanges do not have any team managing them on a daily basis for clients.
You wouldn’t invest using indicators of the United States as a whole, would you? You’d invest in the holdings that upon tons of research, you know are the best. (Many are in the U.S. but not all)
How many of you have lost significant amounts, 17%, 25%, 30%, 45%, we are seeing this in every account we rollover, and it’s a topic of conversation in every crowd of retirees in particular at some point over the months.
Stock Market Losses and Inflation Present an Unusually Bad Combination Not Experienced By the Older Advisors
It’s a harsh reality when people leave their money for years and realize it’s been eroded away by inflation. Inflation alone already close to the teens, but looks like it will at least stay subpar 10%.
These numbers are huge though, on merely $100,000 inflation has taken nearly $9,000. and now poor money management of losing teens and even half or more is resulting in many people losing everything.
When you lose your job, you have a big competitive advantage – the freedom to review your money – and invest how is best for you, not how your company sponsored plan wants you to!
While it isn’t a great feeling to randomly realize one day -all these losses are is poor management or more truthfully, no management at all.
The established advisors haven’t a clue how to invest in this market. That’s why there’s historically high numbers of investment advisory and brokerage businesses for sale.
But that’s where we come in, we’ve been preparing for these for decades; and our vast experience in tech has helped us stay ahead of the curve…
Active Management is EVERYTHING, + You’ll Need a Bit More With It These Days (Keep Reading to Learn What Else)
In this day where everything in the market seems to run on algorithms, passively managed losses are particularly large.
As I said, losing your job or seeing your assets down as a retiree, or anyone really, 
is tough enough.
With active management, you get pure transparency. We’ll show you what is actually happening with your assets under management – where your fees are going – and often it’s a mix of investment management fees, 12b1 marketing fees, and fees from the actual returns.
As an independent registered investment advisory, we can’t take fees from profits without complete up-front transparency, unlike the companies selling their own funds or partner’s funds as is often the case; and we don’t earn different amounts depending on where we invest your money.
Not All Active Managers Are Objective
It’s a really important to distinction to note: Not all independent firms utilize active management; and not all active management comes from independent firms.
In an independent firm like ours that prides itself on best investment management for clients, and transparency, as well as low fees and active management you will see:
- how the market has been
- where we see it performing;
- what our investment strategy is;
- your advice received is not based on commissions
- the advice is transparent regarding any conflicts, assuming you have a signed fiduciary contract and the independent firm is not dually registered as a brokerage
- and you’ll understand the opportunities we are seizing and benefiting from even in these times.
- the statistics will be clearly in your favor regarding the returns – and lack thereof losses you should never get used to experiencing.
Working with our firm, Boracchia Wiviott Wealth Partners, you will benefit from being in the 5% of investors. What this means to you is you will earn more money.
Regardless of how your financial planning is performing, consider Boracchia Wiviott Wealth Partners a silver lining. You now have a bit more time to focus on this. This is the perfect time to do a rollover!
The time window stands at 60 days from when you switch companies or leave your position, but there might be some wiggle room. Some 401ks (or their alternative) even allow rollovers while you are employed there.
Either way, active management is key. Independent registered investment advisors are great, but it also is something you need to ensure is a team who is on the market daily; and that you understand the ways in which they are so successful for the clients.
Our clients are NOT down. Each separately managed account is a bit different, but nobody is down at these levels and many who we can do strategies for due to risk tolerance allowing it are up and continue to earn daily while the market is down!
If you are sick of turning on your computer and seeing the market or worse, your investments down, do not “Set It and Forget It.” Boracchia Wiviott Wealth Partners is here for you, we seek to become your best friends in financial planning and quality investment management for you and yours.
See some of our reviews on LinkedIn, others on Google, or just even posts where when the market is down we’re still up! Even today, Friday, September 23 when the market is falling flat on its face again, we’re unscathed in our client accounts. (The returns of the Exchanges mentioned were taken September 24, 2022.)
And the call to us is certainly less risky than letting your capital be subject to the winds of the markets (we’re not risky anyways ;)). Having a manager who is dedicated to your account in the high standards we call dedication, ethics, and active management is truly priceless.
Active management should be synonymous with all of this, so should the stock market, but that is unrealistic. Wall Street has a long history of fraud and making money at the expense of clients, don’t be a statistic.
In fact, these down markets are the times when millions are made! There are incredible buying opportunities. Look at it like everything is on sale.
The process to roll over assets is seamless for clients, if you understand how it works. It’s normal for 401k companies upon being requested to rollover funds, to try and confuse clients. But we roll over the assets to accounts that protect your tax benefits if any (if from a 401k they do) and we have vastly additional options for investment.
Let us be your breathe of fresh air on all things investment and financial – related.
There’s enough stress that comes with employment or being in retirement during these times, so don’t put your investments at the top of that (long) list.
Come join the top 5% of investors at Boracchia Wiviott Wealth Partners. Call or text (424) 625 – 8943. We know you’re going through alot as a retiree or unexpected job seeker; and we’ll make this process easy for you. + we’ll help with our network as much as we can!
We look forward to helping you enjoy the opportunities now presented.
Kind regards,
Lea Wiviott Boracchia, Marc Boracchia, and our entire Team
Boracchia Wiviott Wealth Partners
- -111 Ste 102, Palm Desert, CA 92260
- & 12130 Millennium Dr Suite 300, Los Angeles, CA 90094
(424) 625 – 8943
SEC IAPD # 287877, Insurance Lic # 0H16150, CA DRE Lic # 02064384
