Our 401K Philosophy
At Victory Fiduciary Consulting, as an independent Registered Investment Advisor (RIA) firm that is registered with the Securities and Exchange Commission (SEC), we have a fundamental obligation to provide suitable investment advice and always act in the best interest of our clients.
In addition, as Employee Retirement Income Securities Act of 1974 (ERISA) 3(21) and 3(38) fiduciary advisors, we implement the 401k Best Practices of ERISA. We also follow the 401k investment philosophy guidelines recommended by the Department of Labor guidelines in regard to sound retirement planning in the following key areas:
We believe in matching the investor with the appropriate investment model to suit their retirement needs. We offer six, passively managed investment models, ranging from conservative to aggressive. We review all available and appropriate investment options, including individual investment or service options. Then we conduct a comprehensive life assessment of every client. We factor in the client’s age demographic, dependents, living expenses, lifestyle, current income, and projected income to provide investment recommendations that are tailored to their needs and long-term retirement goals.
Documentation of all Related Fees:
Investment fees and expenses can eat away at your hard-earned investments, impacting your growth and overall retirement income. Higher investment management fees do not necessitate higher plan performance. At Victory Asset Management, as fiduciary advisors, we benchmark our fees to ensure reasonable fees and services. We operate with transparency by implementing a low-fee and cost-effective investment philosophy. We enforce an Investment Policy Statement with every client to clearly delineate and document all plan, investment selection and fee information in writing, prior to beginning an advisor/client business relationship.
We believe in the adage that knowledge is power. We strongly encourage and actively advocate that our clients arm themselves with investment knowledge that will empower them to make informed decisions. We provide our Plan Sponsors with group investment education seminars for their 401k plan participants and offer one-on-one meetings to our private investors who wish to learn more about their individual investment and retirement options. For added accessibility to investment information, we offer an online, interactive employee engagement and enrollment investment tool; a YouTube channel with a series of tutorial videos, and an 800 phone number.
Minimizing risk is our first priority and focal point of our client asset management strategy. We make investment recommendations with long-term investment and lifetime earnings for our clients. We monitor all client investment options and service providers to minimize investment risk. We utilize fi360, a leading industry fund monitoring software program to track fund positions. We provide flash reports to alert significant changes of client investments and provide appropriate investment recommendations.
At Victory Fiduciary Consulting, we implement a disciplined, non-emotional, math-based investment selection process and performance monitoring. Our Tactical models are a modern day approach to investing. Many Advisory Firms use a system established in 1950’s and has not changed. Victory’s rules based portfolio management system has three main goals:
1. We want to outperform the S&P 500 index by at least 1% / year.
2. We want to reduce volatility
3. We aim to take advantage of market opportunities.
Through these three goals, we shape the steps of our investment methodology for our clients. Our Investment Committee meets with four other Investment Committees across the nation who utilizes this same math-based approach. There are over 40 years of combined investment management experience using this approach.
Step 1: Should We Invest or Stay in Cash?
The first step of the Victory Fiduciary Consulting investing process is to decide whether we should be invested at all. We track six indicators that help determine the overall strength of the stock and bond market. When a majority (four or more) are positive we remain in the market. If four or more go negative, it is a sign that there are significant technical and fundamental deficiencies.
Step 2: Should We Generally Be in Stocks or Bonds?
If our long-term indicators are strong from step 1, then Step 2 will help us decide how we will invest our money. One way is to observe the relative strength between stocks and bonds. We determine the relative strength by dividing the S&P 500 (a stock market index of 500 companies) by the Core U.S. Aggregate Bond Index (a bond market index).
Step 3: Where Should We Be Invested?
Once relative strength confirms to us whether we should be in stocks or bonds, we then must know in which asset classes we should invest. Dynamic Asset Level Investing, or D.A.L.I. for short, evaluates six broad asset classes using a relative strength matrix comprised of a diversified universe of all the asset classes. From these rankings, we can decide which investment styles and sectors we should be invested in. We seek to capture those asset classes and sectors that have strong performance momentum while avoiding those with declining momentum.
Step 4: What Funds or ETF’s Should We Choose?
Now that we have a general idea of which areas of the market are performing best, we conduct various investment screenings to identify the most appropriate line-up. The relative strength matrix helps us determine which funds/ETF’s are outperforming versus their peers. We also use a separate fiduciary scoring system covering 11 different criteria.
In today’s increasingly-volatile investment landscape, we provide investors with real-world strategies. Thanks to our systematic, math-based process of market analysis, investing is just that simple. The old investing mantra of “buy and hold” no longer applies, as we enter a new era of financial technology and instant information. Instead, we use a modern approach through the use of technology to attempt to stack the odds in favor of our investors.
The opinions voiced on this website are for general information only and are not intended to provide specific advice or recommendations for any individual. All indices are unmanaged and not be invested into directly. The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Bloomberg Barclays U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.
The Information on this website, including statements concerning financial market trends, is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons.
This website was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational website.