Investment is a permanent challenge for professionals and individuals. IScore is designed for individuals to manage their investment funds (401K and others) based on a single measure of a fund, i.e. IScore. IScore is a 12-month forward looking, downside risk adjusted return based score from 0 to 10 number. 0 is bad for investment and 10 is good for investment. It is a proprietary tool to manage its own portfolio and an efficient tool for registered members to manage their 401K and/or other investment portfolio. These are primary steps we recommend:
1. Consolidate All Previous 401K to IRA Account
- Your 401K is usually linked to one mutual fund company where you can only choose the list of the preselected mutual funds. The preselected mutual funds by your employer are usually conservative and limited option for investor. ETFs have much more advantages than mutual funds no mater you are a conservative or a growth driven investor. You can do anything you did in 401K using ETF. For the same fund the fee charged in ETF is lower than mutual fund at a minimum. So when possible invest in ETFs rather than mutual funds.
2. Construct a Clear and Simple Portfolio with High IScores
- We have a core ETF list and the IScore over 8 in the list are the pool you can select to add in your portfolio. ETF or mutual fund is already diversified investment portfolio. 3 to 5 funds are enough to manage and enough for diversification. No more than 5 funds are recommended. Normally you should invest 50-70% of your money in funds and leave some room to take advantage in certain market or sector rotation. You may put higher weights in one or more sectors in certain time period. More specific sample portfolios will be published in monthly letter for clients to select.
3. Read Monthly Letter
- The investment letter and asset allocation recommendation are sent out to members monthly. The letter is also user specific, i.e. the letter is about the general market review, overall recommendation for ETF, and user specific for 401K account. The user usually has one or two mutual funds associated with from its employer. The recommendation series of mutual companies is fund series specific.
4. Quarterly Review and Rebalance
- Although the letter is sent out monthly and IScore is the result based on 12 months forward looking we strongly recommend that the user review and rebalance the portfolio quarterly. One quarter is long enough to have a sizable environment/market change and update. Monthly review and rebalance is likely too soon to change but it may be necessary for investors to jump in sooner some time.