Missing the Target - What happens when your Target Date Fund doesn't work properly.

ABOUT THIS EPISODE

On today's episode, Financial expert and Amazon best-selling author John Browning talks about what happens when you’re heading into retirement and your target date fund has just declined by 15 to 20%. What happened and what do you do now? To find the answers, listen to this episode. Learn more when you Connect witth John by texting "LIFE" to 21000 or GuardianRockWealth.com.

Welcome to the build your life podcast with John Brownie. Build your life as a relaxed and unedited conversation with financial expert and number one Amazon bestselling author, John Browning. John is the founder of Guardian Rock Wealth and serves clients across the United States. John's the author of the book build a life, not a portfolio, a guide to your financial future based on your personal values, which you can purchase on Amazon, or stay around to the end of today's show and I'll tell you how to get a free copy mailed right to your door. I'm Michael Delan, your host for the next few minutes as we chat with financial expert and business owner John Browning. Hey, John Browne, you doing okay? To anybody you're okay. Do it better. I'm glad better than okay. That's a good thing to do. So, UM, my youngest daughter is eleven and a half and we're in summertime when we're recording that. She's at a day camp every day this this week and I'm picking...

...her up and yesterday I picked it up on the drive home. I said, what do you do today? So she had a number of activity. She's like, I shot a baby gun a rifle, BB gun, and we shot it at targets and when we were done we all went down there in my target had no holes in it, but the guy next to me had tin holes in and they all shot five, five things. The guy next to me had like tin holes. I'm like really, what happened? She's like, Oh, I miss the target. I'm like, okay, that that works. I get it. When you don't shoot guns, that happens when you missed the target. Sometimes I get that. Today we're talking about missing the target. There's a different kind of target that works in the financial world that sometimes you just missed the target. So let's talk about shooting bb guns in the financial analogy. Okay, yeah, and yeah, I'm hearing this a lot as we moved through a market downturn right and this is what's happened this past year. Actually longer than that's been actually, when you really look at things, for most people it's been a solid eighteen to twenty...

...months of either flat to down. So it's it's it's painful. You know, it's painful for anyone. And the real problem with this downturn in and if you go back to some of my earlier episodes right. On this podcast we talked about old, what I call old school portfolio management and the sixty forty portfolio where sixty is in equities, in bonds and just forget about it, just let it go. Yeah, and I talked about that. Was Way back then and I talked about the problem that I saw with that old school type of methodology. Well, it's really I take no pleasure in this, but because this has really hurt a lot of people with target date Mutu Funds. And it's so simple. And you know, another thing I say is make things as simple as possible. But no, simpler, here you...

...go. And I think the problem here is we is the industry made things too simple, made it's simpler than it really should have been. And so these these target date funds were offered, often in mutual often through the mutual fund companies, into four Oh one K. easier for people. Right, I'm going to retire when I'm fifty, that's uh, we'll be in two thousand and thirty five, or I'm gonna retire around sixty, that's two thousand. Whatever it was. You could say my target date fund is just in the target date fund with then adjust that sixty forty portfolio and they would gradually move it to a US uh, they'd flip as you get closer to retirement, more bonds, less stocks, and they would automatically do that for you in an index fashion. And the problem with that is over the past year, actually a couple of years, but prices have moved down and value just...

...not not quite as much, but severely not quite as much as say, maybe a straight equity portfolio, but both the stocks and the bonds have moved down precipitously. So precipitously, that's a big words. And what has happened? And I get I've gotten a few phone calls that are like, I waiting. My target date was like this year and my target date fund is actually down like fifteen wow. Or my target date was, you know, three years from now, and wow, that wasn't supposed to happen. Requirement. So what what do you do now? Right, I am typically, you know, when people begin to become aware, they're they're too scared, they don't want to do anything. So the deer in the headlight. This is just typical human behavior. Right, they start getting out on the easy,...

...feeling in the pit of their stomach but I don't want to do anything. I'm not sure what I should do and I don't know enough about it, so I'm not gonna. I don't really feel like calling John, you know. And plus it's a four one K. can you really help me with my four O One k? The answer is yes, I can try and help you with that and I'm happy to. I don't get paid necessarily for that all the time, but I can help. What do I do now? So then it's declined. Now it's now fifteen or down. Now I feel like I really I need to do something. So this need to do something. He cell everything out, everything goes and love all the cash. And then you think about it for a second, or maybe not, and I think what you saying cash because of inflation, is actually depreciating at about a double digit rate as well. So now now what? So it's uh, staying on target in involves more than just what I call the fire...

...and forget methodology, and some of the the indexers will will send me hate mails for this, but those who just invest in only the index end up with this problem as well, because when people head for the head, for the exits, they're all in the same basic two, three indexes. Okay, so as they're selling, the problem exacerbates itself. Oh Man, I'm full of big words today. Right. So the market declines tend to become even worse because everybody has so or so many people have been attracted to this wild just invest in the index because it's easier, it's simple. But is it simpler than it should be? Right, that's good, that's that's really good because, Um, yeah, I mean, what do you do there?...

There's so many factors there. And what you were talking about is the emotional aspect that people go through, the roller coaster, the emotional roller coaster, and their first mistake is saying I don't want to call John. No, call John. That's why he's there. Doesn't cost anything to talk to me. That's right, that's right. Um, he's not like some in terms who charged by the art, Um John, but but having a third party who is, in one sense an uninvolved, uh spectator, yet at the same time you're a counselor who can help them mitigate those emotions and and and say, okay, are you? Let's let's talk, let's think, let's look, let's see what might be a good move, a bad move, based on your unique situation. And and that's the that's that's the kicker, I think, is understanding your clients well enough that you can have conversations with him right m yes, and and, you know, trusting in the...

...tried and true methods and yet also trusting in the experience that tells you when the trying and true from past history no longer works in today's world and today's economic environment. And then what would work, or would potentially work for you in your situation, the portfolio you're building for your life to help you right and and I think maybe that's one of the things, John, that unfortunately your industry has a bad reputation of people using the old style sixty and never really contacting their clients very much right. And that's not the way you approach things. Do you like to have relationships with your clients. You like to know what they're doing, you like to say here's what we're going what's the next year? And I think sometimes that's why people might say, well, I don't want to call Jhn, I don't need to call him, use him all the time, put him on speed because it's important. You don't...

...want to be on that emotional roller coaster and trying to figure things out and Colin John said, okay, by this, sell this. Let's No, let John Help you navigate and build that portfolio and do things like we've talked about in the last two or three weeks on this podcast, tax loss harvesting or, you know, portion control, taking profits when it's good, all of those things. That's part of what you do, John, when you work with your clients, is how do we help you build a portfolio that's going to provide for your life, build a life now and in the future. Just it's amazing so many things out there. But yeah, target date. I keep hearing that phrase, target date, funds and all that. What happens when they missed the target? Right? John has some solutions, some ways to Um to help you. So reach out. Reach out to John Browning, Guardian Rock Wealth Dot Com's website, request a copy of his Amazon bestselling book build a life, not a portfolio. Text Him, pick...

...up your phone, text the word life to and just begin a dialogue and have some conversations and see how he might be able to help you hit the target that you're looking for as you build a life, not just a portfolio. So John thanks for helping US understand how to shoot properly, to hit a target um through conversations with you. All right, thank you. Take Care, buddy. Have a great day. Money really is a big part of our lives, and John Browning can help you and your family learn how to keep money in the proper perspective. It's important, but it's only a tool that can help you build the life that you want. If you like John Emeli, you a free copy of his book build a life, not a portfolio. Go to John's website, Guardian Rock Wealth Dot com, and click the contact to US link and send your request. John Will Mel a copy of his book right to your door absolutely free. Thanks for listening to building your life podcast with John Browning. Be Sure to subscribe to this podcast...

...so each new episode will be sent to you automagically when it's released. Have a terrific day. Nothing in this podcast should be construed as personal investment advice, and past performance is no guarantee of future results. Investing is not appropriate for everyone. There is a risk of loss associated with investing in the markets. No representation or implication is being made that using any methodology or system will generate profits or insure freedom from losses. Please remember that investing carries risk. Guardian Rock Wealth LLC and its affiliates are fiduciary investment advisors. Please consult with US or another experienced qualified investment advisor before making any investment decisions and or trying to implement any of the strategies and tactics we may discuss in any of our publications or podcasts.

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