retirementpicThe first step in retirement investing is to determine how much you’ll need to accumulate to fund a comfortable life in retirement. (To come up with a ballpark figure, click here.)

The second step is to consider how you can reach your goal number. The two most common ways to try to grow your retirement account are to make regular contributions to your account (and adjust these contributions for inflation) and allocate your account for growth.

We looked at the importance of contributing to your retirement account in this post. Below, we consider the impact of different rates of returns.

Say you hope to retire in 25 years. You’ve determined that you need to come up with a total of $1,500,000 for your eventual retirement. You’ve been saving for many years now and you’ve already accumulated $200,000. And you’ll continue to contribute $6,000 a year to your retirement account and increase these contributions over time to account for inflation. How much of a return would you need to get to $1,500,000? The chart below looks at the three different rates of return: 7%, 6%, and 5% over 25 years.


If you were able to earn an average return of 7% over 25 years, you’d meet your goal of $1,500,000. But if you earned a just percent less each year, you’d accumulate a substantial sum for retirement, but not enough to meet your goal.

While you can’t know in advance what rate of return your portfolio will earn over the next 25 years, you can look at long-term averages. Since 1950, stocks have gained 10% on an average annual basis, while bonds have returned about 6%. So if you need to earn at least 7% annualized, you will need at least some exposure to stocks, and with a 25-year time frame, you could have a substantial allocation to stocks. The Trinity study we mentioned in our post on how much you’ll need for retirement assumed investors had at least 50% invested in stocks. An allocation of  60% stocks and 40% bonds is commonly used by retirement plans.

If you would like a more personal assessment of your retirement needs and allocation, call us at 1-800-763-8639 and ask to speak with an investment advisor. We’ve been helping investors plan and invest their retirement accounts for decades.


moneylifeshow-imageForeign markets led from 2003 to 2007, but since then, U.S. markets have usually done better. Are foreign funds due for a comeback?

This was one of the questions FundX CIO Jason Browne discussed in his recent appearance on the MoneyLife Show with Chuck Jaffe.

Click below to listen to Jason’s full interview.

“People have been waiting for foreign to come back into favor for the last couple of years, and there’s a lot of logical reasons why…sooner or later, you expect to see that rebound take place,” Jason said. “But our philosophy is to wait for it to happen.”

We don’t try to forecast future market leadership. “We always expect to see rotations [of market leadership], but we have no idea when it’s going to happen or how big of a change it will be in our portfolios,” Jason said.

In the last few years, our portfolios have been mostly concentrated on domestic funds because these funds have been bringing in the best returns. “We don’t have anything against foreign investments,” Jason said, noting that we’d held foreign funds from 2003 to 2007. “We just wait for them to come up our ranks and then we buy.” Continue reading “Are Foreign Markets Due for a Comeback?” »


How Much Do You Need for Retirement?

March 18, 2015

Most fund investors – 92% according to the ICI –invest for retirement. But many people are putting money aside for retirement without any idea about how much they’ll actually need to retire comfortably. But having a target number in mind is an important first step. It can provide a useful framework for your overall retirement […]

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Are You Focused on the Worst Possible Scenario or the Most Likely Outcome?

March 10, 2015

As you’re investing your portfolio, do you find that you’re primarily focused on the possibility of enduring another massive market decline like we saw in 2008-2009? If so, you’re likely experiencing probability neglect, a powerful cognitive bias that causes people to concentrate on the worst possible outcome rather than the most likely outcome. This can […]

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On Forbes: 3 Ways to Get Better at Selling Funds

March 5, 2015

Are you holding funds only because you’re afraid of how you might feel if you sold them or because you don’t feel confident about your investment decisions? Many investors find it difficult to sell funds – even funds that aren’t performing well or funds that no longer meet their goals. But as FundX President Janet Brown […]

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A Strong Month for Stock Markets

March 3, 2015

February was a robust month for nearly all areas of the stock market. The S&P 500 had its best monthly performance in four years, and even international indexes like the EAFE had gains. While large-cap U.S. stocks have been the place to be for over a year now, more stocks are participating in the market’s […]

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The Benefit of Balanced Funds

February 26, 2015

In the March 1, 2015 issue of Bottom Line/Personal, FundX President Janet Brown wrote about the benefits of balanced funds. (The article is currently only available to Bottom Line subscribers). Balanced funds invest in both stocks and bonds so they may be able to “provide a cushion of safety along with potential for strong gains,” […]

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Mutual Funds Still Outnumber ETFs – and That’s Reflected in NoLoad FundX

February 24, 2015

An investor recently asked, “Why does NoLoad FundX includes so many actively managed funds when there are so many other lower cost funds and ETFs available?” It’s true that we list more actively managed funds than ETFs in NoLoad FundX, and that’s in part because funds still far outnumber ETFs. According to the Investment Company […]

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How Much of Your Portfolio Should Be in Stocks?

February 19, 2015

How much of your portfolio should you invest in stocks or stock funds? This is a crucial question that all investors must answer for themselves. If you have too little in stocks, you may not generate enough return to achieve your goals. But if you have too much in stocks, you may not have the […]

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Do Funds Pay to be in NoLoad FundX?

February 17, 2015

An interesting question came up on our Facebook page recently: Do fund companies pay us to get their funds listed in NoLoad FundX newsletter? The answer is no. We do not charge funds to be included in the newsletter. Frankly we think that would be unethical. The funds in NoLoad FundX are those that have […]

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