My company has some rockin’ benefits. They make personal finance coaches available to employees to cover a range of topics, including debt reduction, budgeting, saving, retirement planning, insurance, and portfolio management.
I’ve been with my company for just over a year and a participant in the 401k plan for about 12 months. I have been buying company stock in an ESPP for about 6 months. During my February net worth calculations, I realized that I was buying too much company stock. I also realized that my 401k investments were getting all over the map (literally with too many international funds). I was falling into the classic trap of being a know-it-all, thinking I could guide my financial portfolio completely on my own. WRONG.
I’ve read enough about Modern Portfolio Theory to know about re-balancing and asset allocation. Diversity is the key to good investment performance. However, ego trumps performance and I really needed more guidance than I was getting out of books. I needed a push to help me do what had to be done. So I finally called to set up some advising sessions with the advising service.
The first session was just an overview of what was available and a discussion of what I thought I needed and wanted from coaching. The adviser has insight into my 401k holdings, and he taught me how to share documents online with him so I could upload a spreadsheet of my private IRA which he could not see. Doing that allowed him to work up a report about my investments and show me what my asset allocations looked like in detail for my second session.
During my second session, the adviser and I walked through his report of my investment holdings. The document was clearly laid out with definitions of different asset classes and an explanation of Monte Carlo simulations illustrating the spread of projected investment returns on my current allocation versus the recommended one. It also had a suggested schedule of periodic transactions of what to sell and what to buy each month so I could meet my target allocation.
Read the Part II post tomorrow if I didn’t bore you to death already!
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Hey Mapgirl, are you going to add me to your blogroll? I added you to mine already.
@Aspiration’s Purse – I have a 3 month requirement so far you don’t meet that requirement. Sorry!
Good posts, both parts so far. Do you think then, that as beginners get started, that they should just get professional advice up front? Are your advising sessions costing you money?