THE TRUTH IS, THERE ARE NO MAGIC
TRICKS OR SECRET FORMULAS FOR
MAXIMIZING RETIREMENT SAVINGS AND
MEETING FINANCIAL GOALS. - SCOTT EVANS
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INSIGHTS
THE PERILS OF STARGAZING
(AND OTHER TIPS ON SAVING FOR RETIREMENT)
By Scott Evans, Executive Vice President and Chief Investment Officer,
TIAA-CREF Investment Management, LLC
One of the questions I'm asked most often is, "How can I make the most of my
retirement savings?"
Over the years, I've learned that what the questioners really mean is,
"How can I turn that straw in my backyard into gold?" The truth is, there
are no magic tricks or secret formulas for maximizing retirement savings
and meeting financial goals.
I happen to subscribe to a rather unexciting but effective investment philosophy
based on a pair of fairly simple principles. If closely followed, I believe it can
put investors in the best position to reach their long-term goals.
Although diversification is no guarantee against loss, to minimize the impact of
unexpected bumps along the way, stay properly diversified by rebalancing your
portfolio regularly. Even if you're not the disciplined type, just remembering
to readjust your holdings on your birthday will improve your ability to maintain
the target allocations best suited to your goals.
One of the biggest traps investors fall into is the tendency to read too much into
the short-term performance that's often reflected in "stars" and other fund
ratings. It's counterintuitive, but the fact is, when a fund has had blockbuster
performance in a given year or two, you simply cannot — and must not — assume it
will stay hot the following year.
Others might try to make successful saving sound more complex, but the reality
is you can get ahead if you diversify, rebalance and avoid chasing yesterday's
returns.
MORE TIPS FROM SCOTT EVANS
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Build a portfolio that covers a broad range of asset classes —
stocks, bonds, real estate, cash — as well as a broad set of
securities within each class. |
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Pure exposure to each asset class in your portfolio will help
to ensure that your entire portfolio has the properties that
were designed in to your allocation plan. |
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When you look at performance over three, five or 10-year horizons
you get a very different picture — most funds tend to hover
pretty close to the average of their peers, funds with similar investment
strategies. |
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Consistency is important when building your portfolio for the future. |
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There are no free lunches in investing — you need to take risk to
earn extra return. |
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If your finances are quite complex, you might also want to enlist
the help of a financial advisor. The target percentages that you set
should be based on your savings goals and personal financial situation,
not on what the market is doing at the time. |
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With such small differences in performance over time, a key
differentiator becomes fees. |
REMEMBER:
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Diversify |
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Rebalance |
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Don't chase yesterday's returns |
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Don't gaze at stars too long |
TIAA-CREF GROUP OF COMPANIES
ASSETS UNDER MANAGEMENT
As of September 30, 2004 (in millions)
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TIAA (est.) |
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$161,452 |
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CREF Variable Annuity Accounts |
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164,389 |
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TIAA-CREF Mutual Funds |
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3,723 |
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TIAA-CREF Life Insurance Co. (est.) |
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3,448 |
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TIAA-CREF Trust Company (Client Assets) |
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2,761 |
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TIAA-CREF Tuition Financing |
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4,656 |
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| TOTAL ASSETS UNDER MANAGEMENT |
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$345,011 |
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TIAA-CREF: DEDICATED TO AMERICA'S ACADEMIC, RESEARCH, MEDICAL AND
CULTURAL COMMUNITIES
With over $300 billion in combined assets under management*, TIAA-CREF is
a Fortune 100 company and one of the world's largest and most respected
financial services leaders. For more than 85 years we've been dedicated
to the long-term financial future of those working in the academic,
research, medical and cultural fields.
Today TIAA-CREF offers a wide range of products and services to help our
participants save for retirement and other goals, and to meet our client
institutions' evolving needs. We are committed to the values and practices
that have always set TIAA-CREF apart—value, integrity, sound investment
management, a high level of service, and consultants whose compensation
is not tied to commissioned sales.
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PRODUCTS & SERVICES
RETIREMENT INVESTMENTS
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Retirement Plans |
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Supplemental Retirement Plans |
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Keoghs (if you're self-employed) |
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800 842-2888 |
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Single-Premium Immediate Annuities |
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800 223-1200 |
IRAS
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Classic IRAs |
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Roth IRAs |
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Rollover IRAs (for consolidating) |
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800 842-2888 |
MUTUAL FUNDS
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Fixed income, stock, real estate and money
market funds for a variety of investment goals |
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800 842-2888 |
AFTER-TAX ANNUITIES FROM TIAA-CREF LIFE INSURANCE COMPANY, NEW YORK, N.Y.
LIFE INSURANCE FROM TIAA-CREF LIFE INSURANCE COMPANY, NEW YORK, N.Y.
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10-, 15- and 20-Year Level and Annual Renewable
Term Life |
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Universal Life |
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Variable Universal Life |
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800 223-1200 |
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COLLEGE SAVINGS
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Section 529 Plans
State-sponsored 529 Plans
(TIAA-CREF Tuition Financing Inc., program manager) |
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888 381-8283 |
INDEPENDENT 529 PLAN (FOR PRIVATE INSTITUTIONS)
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888 718-7878 |
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UGMAs/UTMAs
Custodial accounts through TIAA-CREF Mutual Funds |
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Coverdell Education Savings Accounts
through TIAA-CREF Mutual Funds |
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800 223-1200 |
TRUST SERVICES
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If you have $500,000 or more in investable
assets, TIAA-CREF Trust Company, FSB can assist you with investment
management or trust services. |
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888 842-9001 |
SERVICES FOR FINANCIAL ADVISORS
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TIAA-CREF Advisor Services
Your financial advisor can call us for detailed advice,
explanations of our products and information about your specific
accounts. |
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888 842-0318 |
TEXT TELEPHONE SERVICE
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For the hearing- or speech-impaired |
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800 842-2755 |
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