Mutual Funds 101: What's next?

 investment spotlight mutual funds

Apply what you’ve learned to start investing in your future or evaluate your current investments.

1. Take the risk profile quiz.

Find out what kind of investor you are (conservative, moderate, aggressive, or somewhere in between).

NOTE: This is not just for those new to investing. As we move closer to retirement or have life-changing events, our risk profile often changes. Your investments need to fall in line with your tolerance for risk.

2. Choose an investment approach.

Decide how involved you want to be in managing your investments. With Member Benefits, you have three options. You can choose to invest in Model Portfolios, Target Retirement Funds (read "One-decision investing, two options" for descriptions), or take the “do it yourself” (DIY) route.

Go to weabenefits.com/enroll403b or weabenefits.com/enrollira. Our online enrollment section will guide you through the process and provide more insights into investing.

enroll now section  

3. Select your investments.

If you choose the Model Portfolio option, you will choose a portfolio with pre-selected/pre-screened funds that match your risk tolerance. And you are done.

If you decide Target Retirement Funds are right for you, choose the fund closest to your projected retirement year. And you are done.

If you choose to DIY...

  1. Match your investment profile to an appropriate allocation. Use the pie chart that corresponds to your risk profile for guidance.
  2. Review the funds in each investment class. You should consider your preference for active or passive management, the fund objective, expense ratio (keep them as low as you can), performance history, and top holdings. This is easily done by using the prospectus and/or Morningstar analysis (available online at weabenefits.com/investments). Both are very useful tools for evaluating funds.
  3. Identify one or more within each asset category that appeals to you.
  4. Assign a percentage to each fund that interests you. For example, if your asset allocation pie chart suggests 15% of your contribution go to International Equity funds and you have identified three funds from that category, you may give each of the funds 5% of that slice of the pie (or any combination) to total 15%. Continue the process until you have all slices of your pie accounted for and your percentages added together equal 100%.

Target retirement funds invest in a mix of stock and bond funds that steadily become more conservative as they approach their target date. The principal value of a target retirement fund is not guaranteed and may gain or lose value now and after its target date. Model Performance: The reported performance of the models is hypothetical yet based on actual performance of the underlying mutual funds and their corresponding weightings. The performance data on the underlying funds was derived from Morningstar®, an independent third party. The illustration does not reflect the actual performance of individual investors in the models. Investment models are not FDIC-insured, and they are not bank-guaranteed. Investment models may lose value. Past performance is no guarantee of future results. Model performance returns illustrate the relationship between risk and reward. The WEA Member Benefits model portfolios are risk-based. The more conservative the underlying asset weightings are, the lower the expected rate of return. Because of market changes, the makeup of your actual account portfolio will not exactly match the model portfolio. We may perform periodic adjustments of the model portfolio investments and rebalancing of your account to more closely match the model portfolio you select.

Model portfolios are developed by WEA Financial Advisors, Inc., (WEA FA) under the oversight of the WEA Member Benefits Investment Committee. Model portfolios may be adjusted at the discretion of WEA FA and the Investment Committee with prior notice to you. From time-to-time there may be extraordinary situations that will warrant more scrutiny when making adjustments. An example is the market downturn in October 2008. Although WEA FA carefully evaluates the makeup of the portfolios on a regular basis, we make no representation regarding the likelihood or probability that any or all of the portfolios will in fact achieve a particular investment goal or fulfill the risk tolerance profile as described for each portfolio. As a self-directed investor, you should carefully consider the merit and appropriateness of the available investments under your district’s retirement plan in light of your own personal financial circumstances, including your other assets, income, investments, and/or cash flow needs.

Re-Assess Your Investment Needs Regularly: Because your needs, goals, portfolio, and situation may change over time, be sure to re-evaluate your investment strategy at least once a year. You can always choose a different model or create your own mix. Redemption fees may apply. When participating in a WEA Member Benefits model portfolio, you must complete the Risk Profile Questionnaire every three years. You may not continue to use the model portfolio option if you do not timely complete a Risk Profile Questionnaire. In such an event, and if we receive no other instruction from you, your plan assets will be moved to your plan’s QDIA (qualified default investment alternative).

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