Retirement investing made easy
For more than two decades, Stadion has been using a money management process that aims to reduce risk while delivering satisfying returns with less volatility. We continually monitor market conditions and adjust our clients’ retirement accounts accordingly.
Here are the cornerstones of our investment approach:
The less you lose, the more you may gain
At the core of our investment philosophy is this basic tenet: markets move through cycles. We believe avoiding devastating drops in account balances is just as important, if not more so, than capturing market increases. The less an investor loses when the market goes down, the less he has to make up when it rebounds in order for his gains to add to the account value—rather than just bringing it to a break-even point.
In the chart below, two hypothetical investors each have an average return of 8% per year. But look at the actual increases in their account balances after three years. Although Brian reaped larger returns in Year 1 and 2, he suffered a devastating drop in Year 3. Conversely, Jessica had modest gains throughout all three years. She didn’t enjoy a windfall in Year 1 like Brian, but she also didn’t suffer in Year 3. Not only was her ride smoother, she also won’t need the almost 16% return in Year 4 that Brian will need in order to get back to a true 8% overall gain. And if Brian is close to retirement, he may not have the time needed to make up his losses.
|3 Yr. Annualized Return||+5.5%||+8%|
The hypothetical example shown above is an example of how market volatility impacts long term results. The returns of Brian and Jessica used in the example are not representative of Stadion returns. The calculations assume a $100 initial investment with hypothetical returns over a three year period. The average return is the sum of the returns divided by the number of years, while the annual return is calculated based on the dollar amount available to invest each year.
Retirement portfolios with our signature "Flex-ability"
Stadion manages a significant portion (the “Flex” component) of the investment portfolio between equity positions, fixed income positions, and cash/cash equivalents depending on market conditions. This approach is designed to reduce volatility and avoid devastating drops in account balances. During the critical years right before retirement, a portfolio can be as little as 10% invested in equities, while the industry average is near 40%.* Additionally, when market conditions are favorable, we can be invested more heavily in equities, aiming to capture more of the upswing.
*2014 Year End Target Date Scorecard for the S&P Target Date To Index Series Glide Path
Disciplined process behind every investment decision
Our method of tactical management sets us apart. We don’t pretend to predict the market—that would be foolish. Instead, our technical analysis uses numerous indicators to assess market risk levels. These indicators govern our asset allocation. None of our investment decisions are ever determined by emotions, hunches or gut reactions.
Experienced money managers
Our seasoned money managers, who have decades of experience, make the investment decisions on our clients’ retirement accounts. Just as most people shouldn’t try to be their own doctor or plumber, we believe it makes sense to have professionals handle one’s investing.
Managing “to” your retirement date—not through it
Stadion manages accounts “to” a given retirement date, rather than “through” retirement. This means we shift to more conservative holdings sooner than typical “through” strategies in an effort to further protect account holders’ assets as they near retirement. Depending on the state of the market during the last few years of your working life, this could significantly impact your ability to meet retirement needs.
Direct customer service
Stadion operates independently from your employer and your retirement plan provider. Our primary obligation is to you and your retirement future. If you have questions about our services or want to review your investment objectives, simply contact our U.S.-based investor services department at 800.222.7636 during business hours or send us an email.