Steps Academics Can Take Now to Protect and Grow Their Portfolios

Financial markets are rarely predictable beasts. Both the U.S. and foreign stock markets began a decline at the turn of the century, persisted through the tragedy of 9-11-2001, and continued to struggle through 2002. These markets then began a climb until 2007, at which point they began a historic tumble that saw them lose about 40 percent of their value.
 
This unpredictability creates concerns for all investors and has caused extra consternation for those individuals who rely on stocks for a portion of their retirement savings. In good times it is difficult to realize that things can be bad. In bad times it is equally difficult, if not more so, to realize that things will be good again. However, history tells us that every downturn is followed by an upturn.
 
Investors have many means of positioning their portfolios for participating effectively in recovery cycles and blunting the impact of downturns. Staying on top of one’s financial picture, in good times and bad, is critical. Especially during periods of poor stock performance and early recovery, we have to open our statements, take stock of our positions, and reestablish not just our goals, but the best path to reach them. Many university professionals have the ability to do more than they realize to improve efficiency and create solid footing no matter the state of the equity markets.

This book is intended to provide university faculty and staff with information that can be used to improve the flexibility and efficiency of their investment portfolios by introducing concepts that we have used with our clients for over 15 years. Those with retirement assets accumulated while working at previous employers or who have attained a certain age are presented with opportunities that can enhance their portfolios. The opportunities offered by these triggering events can help you complement the limited options available in most mandatory retirement plans by allowing access to less volatile and less risky fixed-income investments that are not available in university retirement accounts. These opportunities can also provide for a wider complement of equity-based investments than those offered within restrictive university-sponsored plans. The more weapons at your disposal, the more likely your chances of success.

Many academics are not aware of the opportunities available to them with their retirement savings. Throughout this book, we look at those opportunities, discuss how to take advantage of them, and explore the benefits they hold. This book will bring you up to speed on these many unknowns and help you maximize the promise of your retirement. We discuss the various financial risks associated with investing. These can be dwarfed by the risk associated with lack of or the ill-informed management of your assets. In short, with respect to university retirement accounts, you may not know what you don’t know.

The academic life is filled with responsibilities — from teaching, conducting research, publishing, advising, and managing administrative tasks to addressing family and other personal issues. Among these responsibilities and the relaxation we all need, you must make decisions that will influence whether you will reach your retirement goals. Proper management of your retirement portfolio requires an ongoing effort. Many academics simply do not have the time, inclination, or resources to properly manage this complex component of their lives.