I am asking the board for a little help because of all the smart people here. I have recently been asked to sit on a pension advisory committee for the company I work for. About 25 employees. The committee's role is to advise our pension plan trustee on what investments to make with the employees' money. It isn't exactly a pension plan, but has similar characteristics to a defined contribution pension plan. In other words, the payout upon retirement/termination will vary based on market returns (how lucky we are). The trustee picks the investments though.
Here is what the trustee wants: 8 to 12 percent returns year after year. He never wants a year with returns less than zero. Almost any equity/bond investment is allowable (something that is traded in the markets). Each investment must produce the 8% returns each year.
Some ideas being floated by the trustee: utilities stocks/funds; mutual funds displaying the 8-12% returns every year for the last 5 years; 15% allocation to short term bonds.
Is this goal feasible? Any ideas on what would produce these returns? It seems like he is looking for an investment with limited downside potential, and steady returns. In other words, high returns with limited risk?
Please help. I'm stumped.
I did pull together a model portfolio of vanguard total stock market, total international stock market, short term corp bonds and intermediate term corporate bonds. This portfolio allocation was analyzed from Jan 1, 2000 till present, and managed to return a total of 20% for this period (total, not annual gains). At the worst point, the portfolio was down 16%. In my mind, this portfolio held up very well, given the little crash of 2000-02. This simple, balanced portfolio failed to impress however.
Also, are CFP's frequently hired by the hour to consult on matters like this? Or who would we hire to do this type of planning?
Here is what the trustee wants: 8 to 12 percent returns year after year. He never wants a year with returns less than zero. Almost any equity/bond investment is allowable (something that is traded in the markets). Each investment must produce the 8% returns each year.
Some ideas being floated by the trustee: utilities stocks/funds; mutual funds displaying the 8-12% returns every year for the last 5 years; 15% allocation to short term bonds.
Is this goal feasible? Any ideas on what would produce these returns? It seems like he is looking for an investment with limited downside potential, and steady returns. In other words, high returns with limited risk?
Please help. I'm stumped.
I did pull together a model portfolio of vanguard total stock market, total international stock market, short term corp bonds and intermediate term corporate bonds. This portfolio allocation was analyzed from Jan 1, 2000 till present, and managed to return a total of 20% for this period (total, not annual gains). At the worst point, the portfolio was down 16%. In my mind, this portfolio held up very well, given the little crash of 2000-02. This simple, balanced portfolio failed to impress however.
Also, are CFP's frequently hired by the hour to consult on matters like this? Or who would we hire to do this type of planning?