RetirementSmarts Signs Deal With New Frontier Advisors to Provide Allocation Technology
Asset Allocation Technique Developed by New Frontier Advisors President Richard Michaud Works So Well, Even the Nobel Prize-Winning 'Father of Modern Portfolio Theory' Admits It's Better
GRAND RAPIDS, MI, November 22, 2005 -- RetirementSmarts.com, the web-based asset allocation tool offered to 401k, 403b, and 457 plan participants, has signed an agreement to have New Frontier Advisors provide the allocation technology for RetirementSmarts subscribers. New Frontier Advisors President Richard Michaud has received 2 patents for the technique dating to 1999.
RetirementSmarts.com is a tool through which retirement plan participants are able to combine the investment options offered by the plan to create a portfolio that produces the highest return for the degree of risk specified by the employee. Participants do not need to be investment experts to use RetirementSmarts; they simply need to answer basic questions about their goals. Employees can opt to have their portfolios automatically rebalanced. Regular reallocation of assets has been shown to add at least one-half percent to portfolio return.
"Statistically rigorous computational tests confirm that RE optimization is the first and only provably effective portfolio optimization procedure in the world today," said spokesman Robert Smart. "We are giving every employee, in a fast and easy form, the same tool used by leading professional money managers. For the first time employees have a fighting chance to match or better the returns in their accounts to those of Wall Street."
Proper asset allocation creates a precise combination of the various plan investment options. That combination, and that combination alone, will provide the highest expected return for the risk undertaken. This process begins with an analysis of how the performance of each of the plan investment accounts have related to one another as markets have gone up and down. Next, the model performs hundreds of simulations of potential future outcomes for each asset. After all, no one pretends they can predict the future market events with certainty. These outcomes are then averaged together. The result is a smooth curve of discreet combinations of risk and return that are matched to employee preferences.
"RetirementSmarts is all about asset allocation and re-allocation, which is based on the Nobel Prize Winning concept of Modern Portfolio Theory," Smart said. "But now even Henry Markowitz, the renowned 'father of MPT,' has tested his technique against the Michaud technique and acknowledges that Michaud has done him one better."
RetirementSmarts is made available to employees through their employer. Models are unique to the investment options available in each plan. Each new subscriber receives a custom designed implementation package to educate employees in the most effective use of the technology. Individuals may use RetirementSmarts.com's proprietary model for their IRA accounts by going directly to http://retirementsmarts.com .
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