Advantages

An Advanced Return Model That Mirrors Reality – Not Just a Textbook: An advanced return model that is consistent with how asset returns behave in the real world, not in a textbook, and flexible enough to let us add new asset classes over time. Our model informs thousands of Monte Carlo simulations of possible future interest rates, bond yields, and rates of inflation and asset class returns, which tell us how your retirement savings can evolve.

Constraints That Go Beyond Asset Class Weights to Better Balance Risk and Reward: Constraints on both assets class weights and portfolio risk. Constraining asset class weights assure portfolios remain well diversified. Constraining portfolio risk means we won’t recommend an allocation too risky for its expected reward.

Drawbacks to using efficient frontiers without understanding them:


1. Pink zone: lottery tickets
2. Too little reward for the risk

We recommend allocations in the green region where the geometric return is rising.

A Proprietary Utility Model That Helps Guard Investors Against Bad Outcomes: An initial risk level recommendation for each client based on our proprietary utility model, Bi-Constant Relative Risk Aversion (BI-CRRA). We designed our BI-CRRA model to represent a typical retirement saver’s strong desire to avoid bad outcomes. After receiving our recommendation, clients can use our online tools to adjust their savings rate, risk level, and retirement date, and see how their decisions can affect their range of possible outcomes.

Use of Simulations to Create More Realistic Projections: Use of simulations instead of calculations to create realistic projections of future retirement wealth and income. No one knows exactly what the future holds, so any exact calculation will be wrong. By projecting future asset class and portfolio returns one month at a time over several decades, we can better estimate and communicate the full range of a client’s possible retirement income than if we simply used a single calculation.

Investment Team Oversight Made of Some of the Best Minds in the Industry: Oversight from an expert investment team that meets on a weekly basis. In addition to reviewing the ongoing performance of existing recommended portfolios, the team discusses modeling and improvements to our engine. Our decades of collective investment experience offer a rich background for solving different problems relating to retirement saving and spending. Informed but not dogmatic, we take considerable care when researching topics so you can be fully confident in the advice we provide.