Retirement Investment Strategy
Our philosophy is simple: we're here for you — not your company, broker or institution. We think everyone deserves access to professional independent financial advice.
We can't control the market, but we can control how we invest in it. Blooom's strategy focuses on cost and decision making while managing risk for unpredictable performance.
We're in it for the long haul.
The road to retirement is an unpredictable one. That's why we invest our time and research on managing risk through proper asset allocation, and avoiding high fees. We're here to keep your strategy on track.
Your situation is different than John's, is different than Linda's, is different than Ronaldo's... That's why we've created the blooom glidepath. The glidepath gives us the opportunity to address individual goals and create a custom portfolio based on years until retirement AND your risk tolerance. Whether you're feeling riskier further from retirement or need to play it safer as your close in, your stock/bond mix will be adjusted just for you.
Blooom uses asset allocation strategies to suit a range of time horizons and risk tolerances—we call this the blooom glidepath. Using the funds in your 401k (or other employer-sponsored plan) we recommend a customized portfolio following an approach based on the amount of time you have until you retire and your risk profile.
The blooom glidepath uses global macro indices for each of the asset classes that we suggest. We base the asset categories on those utilized by Morningstar, an industry-leading investment analysis firm.
Focusing mainly on your current age and time until you plan on retiring, we make a recommendation on an appropriate stock/bond portfolio from the blooom glidepath. We then assign each of the fund options within your plan to a fund category. The combination of our initial recommendation and your answers to the risk profile questions creates a personalized asset allocation strategy designed to adjust over time as you near retirement. We adjust your stock and bond allocation as you near your stated retirement age so that you're preserving more of the money you've earned in your account, transitioning focus from growth to preservation slowly over time.
Squash the fees, please.
Once we have your mix of stocks and bonds determined, we find the lowest-cost option in each fund category available within each plan. Why? Besides the obvious reasons, (we hate Wall Street worming its way into your investments) studies have shown that the cost of investment fees could have detrimental impact on your hard-earned nest egg.
After we determine your stock to bond mix, we select the lowest-cost fund option in each fund category available within each plan. This belief is backed strongly by numerous studies showing the long-term advantages of focusing primarily on an investment's internal costs instead of past performance, when selecting investments.
Allocations across the investments available through your plan are constructed using the research and methodology behind Modern Portfolio Theory, a Nobel Prize-winning investment strategy. We optimize your portfolio for a given level of risk based on the asset classes available to you.
We disregard any Target Date Funds, balanced funds, and lifestyle funds. These one-size-fits-all investments may not meet the needs of every retirement saver. The sole criteria used to select which particular investment will be allocated from the plan is the one fund in each applicable asset class that has the lowest overall internal expense ratio.
It's all about financial fitness.
We do the heavy lifting for you—constantly monitoring for the right time to make trades to put you back on track. Our advisors are here to help you make stronger decisions about your finances.... 401k, IRA and beyond.
Once you decide to hire blooom we execute trades in your retirement account to align with the recommendations from your free analysis. We continuously monitor your retirement account and make necessary adjustments based on your goals and market factors. As your trusted digital financial advisor, we're on this journey together.
You hire blooom to execute the trades within your 401k and IRA to build a suitable diversified portfolio based on information you give us, including your age, the age you'd like to retire and your comfort with risk.
After the initial rebalance of your account, we monitor your retirement account for any changes made by your employer in the fund lineup, changes you make to your retirement goals - either retirement age or comfort with risk, and significant market movement that may take your account out of balance with the blooom recommendation. When your portfolio drifts away from what we consider your ideal asset allocation strategy, we'll conduct the appropriate trades to get you back on track. As you near retirement we'll systematically move your allocation to more conservative allocations. Rebalancing your account may occur one to four times per year as needed.
While we're monitoring your account for optimization opportunities, we're also reviewing activity in your retirement account. If we view a distribution from your account we'll send you an alert.
We're not just about monitoring and rebalancing your 401k and IRA. Our advisors are equipped to help you answer the important financial questions to keep you on pace to reach your goals. Whether that's helping to answer questions about paying down high-interest debt or making decisions about saving for college or beyond, we can help guide you down life's financial path.
Blooom increases your potential for a better retirement by maintaining an informed investment strategy that doesn't bend to emotion. We give you peace of mind in knowing a trusted partner with an unbiased perspective has your back.
Investing doesn't have to be difficult, but it does require an interest in studying the investments available to you, the desire to take time away from other areas of your life to stay on top of your strategy, and the patience to ignore the hype and noise that comes with the markets' roller coaster ride. If you possess those attributes, then you may not need the professional help of an advisor. For most, though, one or more of those characteristics is missing when it comes to investing for their future. Research over the last 20 years through 2015 shows the average investor consistently underperformed the S&P 500 Index. The reason for this underperformance is investors' own behavior - chasing market returns, buying high and selling low. Blooom does what numerous studies have shown to be a valuable ingredient to your investing success in the long-term - take emotion out of the equation.
You should demand to have an unbiased partner reviewing your investments and providing advice based on your best interest. Blooom is unconflicted. We don't get paid based on the investment choices in your plan, the size of your account balance or the number of times we make a trade. A flat-fee approach establishes our unbiased relationship with our clients and our time-tested investment strategy rounds out our investment philosophy.
Allowing blooom to manage your account provides you with protection from your own emotional reactions, confidence to focus your attention on the real passions your life, and peace of mind knowing a fiduciary organization is advising you on your retirement options.
Chris Costello, Co-founder