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A long-term investing goal like retirement isn’t funded overnight. Most people incrementally fund their retirement accounts by regularly putting money aside every month or every paycheck for years – this is called the accumulation stage of retirement investing.
For most investors, building a retirement portfolio that is adequate to fund a comfortable retirement requires a combination of persistent savings and long-term investment gains. Savings without growth simply don’t add up to enough – and yet consistently contributing to a retirement account is very helpful when combined with a balanced long-term investment portfolio.
A balanced account that includes both stocks and bonds can help investors stay invested. A common balanced allocation is 60% in stocks and 40% in bonds – the same allocation of the FundX Conservative Upgrader Fund (RELAX). RELAX invests 60% in core stock funds and 40% in our Flexible Income strategy (primarily bond funds).
A Decade of Regular Contributions to RELAX
A fund like the FundX Conservative Upgrader Fund (RELAX) is a simple way to conservatively invest for long-term growth and income. Despite the many challenges and the severe ups and downs of the market over the last 10 years, the FundX Conservative Upgrader Fund (RELAX) doubled.
The chart plots the experience of an investor who is 5 to 10 years away from retirement. This investor had already accumulated a $200,000 nest egg by March 31, 2003 and invested that amount in RELAX. To simplify consistently putting money aside for retirement, the investor signed up for an automatic investment plan (AIP), which automatically invested $500 of the investor’s brokerage account into RELAX each month.
Over 10 years, the investor’s monthly $500 contribution boosted the retirement account $60,000, building on gains that came from being invested in RELAX. By March 31, 2013, the investor’s total portfolio was worth $538,405 – more than double the cumulative investment in RELAX.
Balanced & Rebalanced
RELAX is balanced between both stock and bond funds, and it’s also a rebalanced fund. We rebalance the Fund’s exposure to stock and bond funds back to its 60/40 allocation. During strong periods in the stock market, the Fund’s stock allocation may rise above 60%, and this prompts us to sell part of the Fund’s stock exposure and reinvest it in bonds. Likewise, in strong periods in the bond market, the Fund’s bond allocation may increase over 40%, which prompts us to sell some of the bond exposure and direct it to stocks. This process leads us to sell high and buy low. RELAX shareholders don’t have to make these allocation changes – it’s all done for them.
Making Regular Contributions to FundX Conservative Upgrader Fund (RELAX)
10 Years: March 31, 2003 – March 31, 2013
Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance current to the most recent month end may be obtained by calling 866-455-3863 or visiting www.upgraderfunds.com.
This chart illustrates the performance of a hypothetical $200,000 investment made in the Fund ten years ago. Assumes reinvestment of dividends and capital gains, but does not reflect the effect of any applicable sales charge or redemption fees. This chart does not imply future performance. Standardized Performance for the FundX Conservative Upgrader Fund (Click Here)
How to make regular contributions:
Automatic investment plans (AIP) make it easy to make regular contributions to your investment accounts. When you sign up for an automatic investment plan, cash is automatically transferred from your bank account into your brokerage account or mutual fund investment every month.
You can sign up for an AIP with the FundX Upgrader Funds with just $100.
Automatic Investing Plans do not assure a profit or protect against loss in a declining market.