EXPERIENCE COUNTS. AND IT MAKES A DIFFERENCE IN RETIREMENT


We have spent the past 15 years helping investors just like you. Unfortunately, the longer you go without getting advice, the less time you have to get it right. And having the right advice just might make the difference for you. It has for other investors already – in fact, investors that get professional help (like blooom) typically have 2x as much money at retirement than investors that use a do-it-yourself approach.*

Before You Can Understand Methodology

– you have to understand the madness.

    

Our method was developed by Certified Financial Planners to maximize your retirement options.

Blooom is a fiduciary regulated by the SEC. Read more about our methods and get started on improving your retirement goals!

    

Common Mistakes 401k participants make:

OSTRICH FUND SELECTION

401ks can be intimidating, even scary. Too many times we’ve seen people bury their heads in the sand. For instance, we’ve seen plenty of young people with almost all of their 401k invested in money markets that are earning virtually zero towards retirement goals.

COMPANY STOCK BIAS

Hey, you want to support your company – so you load up on company stock in your 401k. Loyalty is great. Too much loyalty can be bad. Just ask the devoted Enron, Worldcom, or Pan Am employees that had too much company stock in their 401ks.

WRONG RECIPE

Without knowing the exact holdings your 401k funds are invested in, it is pretty hard to get the right mix of stocks and bonds. Blooom will solve this riddle for you.

THE MIRAGE

Sometimes people think they are diversified because they own “a lot of funds”. But here is a quick tip for you, diversification doesn’t come with the number of funds you own, but the types and the genetic make up of each fund.

DECIPHERING FUND NAMES

Your Assumption based on Name of Fund 100% American Stock.

American Fund’s Growth Fund of America
This is a fund that’s an option in many 401ks. By the name alone, you may be quick to assume that this fund invests only in American stocks (for crying out loud, they use “American” twice in the name of the fund!!!).

Actual Holdings of Fund:
87% of the fund is invested across American-based companies, the remaining 13% can be traced to European and Asian companies.

This Isn’t Rocket Science – but it’s close.

  

After you’ve used our blooom application, we will use our algorithm to generate beyond-human-calculations to identify the right investments for your ideal 401k.

  

How blooom narrows down the right funds to use:

Scrub Your Options

We start by taking a look at the options in your 401k and eliminate the funds that don’t make sense for you to own.

Rounding It Out

Traditionally, we lean towards using index funds, but occasionally it will make sense to use actively managed funds to gain investment exposure where needed in your 401k.

Number Crunching

Once we’ve identified the appropriate funds that will get you closest to your target allocation, our algorithm will select the ideal investments based on expense and manager experience.

Double-Check

A blooom advisor double-checks the results and cross-references with your recommended 401k allocation.

Peace of Mind Comes Standard

With blooom handling your 401k, this isn’t a “set it and forget it” service. Quite the opposite. In fact, think of blooom as “TLC” for something that you’ve never spent any “L” on before. And here’s how we do it:

REGULAR REBALANCING

Every 90 days we will review your current investments and the recommended weighting you should have in your 401k. If your 401k investments drift too far (due to market movements), we’ll take care of it. Rebalancing has been shown to add an additional .5% in annual rate of return.

GLIDE PATH ADJUSTMENTS

As you draw nearer to retirement, we will systematically taper off your stock exposure. We handle this for you. As long as you are a client of blooom you can rest assured that your 401k will be appropriately invested and adjusted.

A SECOND SET OF EYES

Folks get all sorts of mail about their 401k. Most of the time, investors can’t understand what to do with it. Email it to us and we’ll tell you in easy to understand terms what, if anything, you need to do to hit your retirement goals.

Market Philosophy

Let’s start with the basics, a little history on how our financial markets have performed over the past century. Since 1928 the average annual return of large US Company Stocks has been a little better than 9%. Over that same time frame, the return of safe, short-term (3 month) US Treasury Bills has been about 3.5%. At first glance the difference between these two may not appear that significant but when we look at both of these from a different angle, the difference becomes massive. $100 invested in 3-month US Treasury bills back in 1928 would grow to be worth $1,971 by the end of 2012. But had you invested $100 in a basket of large US Company stocks (the S&P 500 to be precise) back in 1928 it would grow to be worth an astounding $193,219 by the end of 2012.

  

Now granted, that $100 investment into stocks would have taken you on a pretty wild ride of ups and downs over the past 84 years whereas the investment into 3-month treasury bills would have bored you to sleep with consistent (albeit small) returns year after year. But if you don’t need to access any of that $100 investment you made, should the ups and downs in the stock market really affect you? We think not. This is precisely the attitude all young people should have concerning their 401ks. This is money that is 100% intended for that glorious day in the future when you can smash your alarm clock for good. Endure the temporary downs so you can be around long enough to reap the rewards of the permanent ups.

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