Frequently Asked Questions

The 401(k) Allocation Model (401) is our premier Investment Model for 401(k) investors. It’s designed to provide a complete portfolio management solution for people investing through their employer-sponsored 401(k) plans.

The 401 Model dynamically switches between various stock and bond funds to achieve outstanding returns while exposing your portfolio to significantly less risk than traditional investment approaches. Learn More

Anyone who invests through a 401(k) plan will benefit from following the 401(k) Allocation Model. The 401 Model will help you keep your investments in sync with changing market conditions.

The 401 Model is a complete portfolio management solution, designed to manage your entire 401(k) account. If you’re new to Model Investing, consider using it for only a portion of your account to get started. As you become more confident in the 401 Model’s performance, you can begin using it to manage your entire account.

You can view the 401 Model’s historical backtested performance here. Pay special attention to the table of risk metrics, it’s important to understand that the 401 Model’s outperformance does not come as a result of taking on more risk. In fact, the 401 Model exposes your money to significantly less risk than traditional investment approaches.

The 401 Model uses a completely different approach to investing than traditional portfolio management. Instead of splitting your money between stocks and bonds and staying invested regardless of market conditions, the 401 Model tracks the performance of several stock and bond funds and allocates the portfolio accordingly, transitioning between funds as they take turns leading the way higher. Learn More

You can see the latest 401 Model recommendations here. Access requires a premium subscription.

Using the 401 Model is easy, but it’s a bit more complicated than our other Investment Models. The first step is determining which funds in your specific 401(k) plan line up best with the funds in the 401 Model. Don’t worry, you only have to this once, and we can even do it for you! Then, each month you will receive an alert when the latest 401 Model recommendations have been posted. Simply log in to your 401(k) account and make the appropriate changes to your allocations. Learn More

Yes. People are living longer these days and it’s important that your money continues to work for you during retirement. Because the 401 Model has been able to generate higher returns than both stocks and bonds, and also avoid major losses during market crashes, we feel comfortable recommending it to investors of all ages. For more information on how to de-risk your portfolio during retirement, please see this article.

In general, no. Your 401(k) plan should allow you to make changes to your investment allocations free of charge as long as you do not violate your plan’s excessive trading policy. You should research your specific plan’s policy regarding this before beginning to use the 401 Model. Learn More

The 401 Model is able to recognize developing periods of stock market weakness and will typically move the portfolio to bonds during the early stages of a crash. This limits losses and is one of the primary benefits of the 401 Model. When the stock market begins to recover, the 401 Model will move back into stocks.

No. The 401 Model does not use target date funds. Model Investing recommends that all investors avoid using target date funds due to their inherent problems.