GOALS-BASED INVESTING

We believe there is a better way to invest.

All too often people make the mistake of basing their retirement planning investments exclusively on their tolerance for risk. Fisher Investments takes a different, more comprehensive approach by understanding your personal goals and plans for your retirement years.

It’s an investment industry standard practice to ask investors to declare themselves as “aggressive,” “moderate” or “conservative” in regards to how they may want to invest their money. Based on that response, advisers will provide generic investment options mirroring those choices. However, we believe this approach only assesses your feelings about recent market performance and if you make investment decisions based on your current feelings about the market, it may negatively impact your long term retirement savings.

For example, aggressive investors are typically seen as being able to handle the volatilityup and down market swingsinherent in stocks, while conservative investors are seen as wanting the relative stability of bonds. Their risk based self-assessment will quickly become out of date as views change with newer market events and it may lead them to frequently update their investments. This short-term approach is not appropriate for longer term retirement goals.

401k retirement approaches

How to Complete a Goals-Based Assessment?

We created a tool, called the Retirement Navigator for our clients’ 401(k) participants. It helps inform employees so they can select a model portfolio that’s right for their personal situation and investment goals, based on each individual’s needs in retirement, anticipated retirement date and other factors.

Individual investors often don’t see the forest for the trees.

Individual investors often buy and sell based on how the feel about the market, which can cause them to have lower returns compared to making decisions of buying and selling based on their long term goals. The statistics below show these "average investors" who only invest in high performing (stock or mutual) funds and get rid of the low performing funds, still under-perform the market average.

5.2% vs. 9.8%


Stock mutual fund investors averaged 5.2% returns versus the S&P 500’s 9.8%.

1.0% vs. 6.2%


Bond mutual fund investors earned an annualized return of 1.0% versus the Barclays Aggregate Bond Index 6.2%.

* DALBAR Inc.’s annual study, the 2015 Quantitative Analysis of Investor Behavior, known as the QAIB.

To learn more about Investor Behavior

Read our summary of the recent DALBAR inc annual study of Investor Behavior, known as the QAIB. It provides another assessment of how the average investor isn’t prepared to successfully invest in the market.

READ THE CASE STUDY