Facts Are Stubborn Things: Standards-Based Investment Analytics

Have you ever wondered whether your investment process yielded an undiscovered investment gem or just another widely recognized investment alternative? Although investment advisors are engaged to establish a prudent investment selection process, it is sometimes difficult to avoid following the herd when good investments are obvious to the average observer.

Findings from Our Database

The PlanTools Risk Management System contains over 120,000 investment options, which is more than twelve times the number of individual stocks available for purchase. Of these, approximately 6,900 open-end mutual funds have been used to specifically populate the investment portfolios of retirement plans within the system.

To our surprise, very few investment alternatives found their way into the majority of retirement plans. Only Growth Fund of America, PIMCO Total Return and EuroPacific Growth were utilized by more than 50% of the retirement plans monitored. No other investment was utilized by more than 30% of all plans in the database.

Key Observation

The volume of investment choices is so immense, the only practical way to narrow the field to arrive at a manageable number of qualified candidates for consideration is by using an automated standards-based investment analytics system. Using a system trumps throwing darts as a prudent process every time.