The 401k Maximizer by 401k Maximizer, Inc. was developed specifically for all three of Southwest Airlines retirement plans.

The 401k Maximizer was developed so that every employee at Southwest Airlines can have a powerful, easy tool to manage their retirement dollars. The 401k Maximizer solves 401k and profit sharing fund selection decisions immediately. Every employee should be taking advantage of the tax deferred power of these great retirement plans, but most employees just don't know how to maximize returns and limit risk when the market turns down. The 401k Maximizer will show you how to grow your retirement account and avoid losses that threaten your retirement. 401k Maximizer gives busy employees the bottom line on what to do with their retirement plans, so they can build a secure retirement and not worry about their money.

How many times have we all witnessed colleagues of ours working weekends, holidays or all night shifts just to pick up a few extra dollars in after tax money. And yet those same folks won't take 5 minutes a month to manage their retirement accounts which will have a far greater impact on their financial future than those few extra hours every month on the job. Remember, that retirement dollars are all tax deferred while salaries are taxable. So do yourself, and your family, a favor and make it a habit to spend the 5 minutes every month it takes to keep these dollars in the best performing funds.

During the last week of every month we will show you which funds to own, and how much exposure Conservative, Moderate and Aggressive investors should have in the market, the following month. Then daily we analyze the risk/reward potential of the overall market and communicate if any significant changes occur which would warrant you to reduce or increase your market exposure and how. Stay safely on track toward reaching a secure retirement. This service will show you when to avoid high-risk times in the markets and times when the odds for solid growth are in your favor. Then it’s just a matter of following the fund recommendations.

The power of this approach is so effective that you will soon be telling other employees you work with about the difference it has made in your retirement plan since you signed up. Because every Southwest employee deserves the peace of mind of a secure retirement we want each of you to maximize your investment returns. A secure retirement is one of the greatest gifts you can give yourself. Don't hesitate, subscribe now and start turning your tax deferred retirement dollars into the retirement security it was meant to be.

Top Down Investing

At 401k Maximizer,Inc. we approach the market from a top down perspective. First we evaluate overall market conditions to evaluate the risks in the market which will determine the level of market exposure Conservative, Moderate and Aggressive risk investors want their portfolios to have in the next month.

To demonstrate the power of analyzing overall market conditions before investing our hard earned retirement dollars let's compare the returns you would have realized using a simple 50 day moving average of the NASDAQ and S&P 500 indexes to evaluate whether it's safer in the market our out of the market, in the safety of cash (or in our case the credit union), during the period from 1972 to 1993.
For the S&P 500, buy and hold from 1972 to 1993 would have returned 349.96%, compared to 533.21% using a 50 day moving average to get in and out of the market. With the NASDAQ, buy and hold would have returned 760.74%, compared to 6,016% with timing.

If you had started out with $10,000, buy and hold would have increased that amount to $44,996 on the NYSE and $86,074 on the NASDAQ. Using a simple 50day moving average would have increased those numbers to $63,321 on the NYSE and $611,686 on the NASDAQ.

If you had bought and held the Dow Industrials from 1970 to 1994, you would have gained 472.62%. If you missed the 75 best days, you would have lost 51.56% of your money. But if you had missed the 75 worst days, you would have made 5,187%!!

We were so fascinated by this at 401k Maximizer, Inc. that we took it all the way back to 1928 and found that if you had purchased the Dow Jones industrial average index with $10,000 in 1928 and held it until the end of 2002, that $10,000 would have to grow to $330,807. If you had missed the 10 best months in the market since 1928, we're only talking about 10 months here in close to a 900 month period, then that $10,000 would have only grown to $47,387. But if you had missed the 10 worst months in the market since 1928 that initial $10,000 value would have grown to $3,713,036!! So it definitely pays to be in the safety of cash during the worst periods in the market, as most of you know who rode the market down during 2000 through the fall of 2002. The easy conclusion of all of this testing is that the key to making big profits over the long term is to avoid the market altogether during big sell offs.

Market Analysis

So how do we determine whether it's safe or not to dip our toes into the market at any given time? Well after many years of testing; back testing, forward testing, and just all around crazy testing we have found that relying upon any one indicator, like a moving average, or even two moving averages, is a very dangerous way to approach the market. Why? Because even the best indicators breakdown at times and don't work!!

So when you have your hard earned dollars on the line it's wiser to take a consensus of some of the best market barometers available to determine whether the wind is at your back or pushing you back. Consequently, our market analysis of both the large cap stocks as represented by the S&P 500 stocks or small cap stocks as represented by the Nasdaq Composite is a product of 7 different measurements of price direction, accumulation vs. distribution, and several measures of underlying market breadth.  Each of these major signals represents a consensus vote of all of the underlying indicators which drive them. The consensus of the vote shows us the positive or negative bias of the market. Consequently, if any indicator, like a moving average, breaks down and stops performing for a period of time, its failure is masked by the consensus of the other indicators, which are still performing. We look at these indicators using weekly bars of market change to dampen out short term market noise and gain a clear picture of actual market bias.

When the consensus of all 7 underlying indicators of both the S&P 500 and the Nasdaq Composite turn negative we recommend that Conservative and Moderate risk investors reduce their market exposure. Because as the losses everyone took during the bear market show, there are times when it's just better to have money invested in the safety of cash than watch it dwindle away in any investment.

Fund Selections

So how do we select our monthly fund recommendations? First of all, it’s important to remember that the 401k and Profit Sharing fund selections producing the greatest returns will slowly change during the course of a year. This is why we want to upgrade our portfolios monthly to stay invested in the funds which have the greatest potential for gains in the following month. To select those funds, we evaluate multiple measures of each of the funds returns. This is a proprietary ranking process which considers each funds recent and historical returns. This approach is considered one of the most robust mutual fund selection techniques available.

Summary - The Advantages of using 401k Maximizer, Inc. as your guide to 401k and Profit Sharing plan fund selection

  • We start with a top down analysis of the overall market and use advanced multiple measures of underlying market breadth and strength driven by 7 different proprietary indicators all voting against each other to determine the markets bias.
  • This market bias determines the level of market risk which in turn drives the level of market exposure that Aggressive, Moderate, and Conservative risk investors want to have on a month to month basis.
    * We rank all of the 401k and Profit Sharing plan funds using a thoroughly tested methodology that weighs each fund’s recent and longer term returns.
  • To summarize, our goal is to always position ourselves for the greatest returns based upon the current market conditions with the understanding that once in a great while the greatest returns may be the safety of cash in a money market fund.


The information and data contained herein are compiled from the Southwest Airlines web sites and other sources and are believed to be reliable, but accuracy cannot be guaranteed. 401k Maximizer, Inc. disclaims any and all liability for losses that may be sustained as a result of using the data presented herein. Past performance is no assurance of future results. All investments involve risk. You should invest only after careful examination of fund prospectuses.

401k Maximizer, Inc. monitors fund performance and publishes a monthly newsletter. The goal of 401k Maximizer is to take the guess work out of the fund choices and to help every employee manage his or her own retirement plan. 401k Maximizer is a newsletter monitoring the retirement fund alternatives available to employees of Southwest Airlines.