Asset Allocation

Proper Asset Allocation is Key to Successful Investing

Asset allocation is one of the most important determinants of investor success. Renowned investing expert Roger Ibbotson identified that more than 100% of variability of a fund's investment return is due to asset allocation. Participants who have the opportunity to receive professional advice regarding appropriate asset allocation and ten risk-calibrated index portfolios may significantly improve their odds of investing success.

IFA’s research has demonstrated that proper asset allocation should be determined based on 30 years or more of historical risk and return data, not a few years of random noise or speculation about the future. Given this, an advisor who provides ample data about style pure indexes may offer individuals a higher probability of achieving their expected return, thus facilitating the very purpose of retirement investing — income replacement. This knowledge diminishes the utility of a fund line-up that consists of actively managed funds.

IFA’s 401(k) services provide ten risk-appropriate asset allocations suitable for investors from very conservative to very aggressive and various levels of intermediate risk. IFA’s asset allocation models are designed to capture specific risk exposures over very long periods of time—investing science, not pure speculation.

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