There are several other services available to manage my US Airways 401k plan with, what makes your system better?

That's a great question. There are two main issues you want to consider when managing your 401k. The first is a method to show you when it's safe to be fully invested or scaled back in the safety of money market and fixed income investments; the second is a thoroughly tested fund selection system.

We say managing your 401k because you should be actively upgrading your 401k holdings to the best performing funds monthly if you want to outperform the market over the long term. Buy and hold asset allocation is a recipe for underperformance whether it's with your 401k or with other dollars. Look at it this way. Money is constantly rotating on Wall Street from sector to sector and industry to industry. Normally, when the market favors a certain area like oil stocks, or biotech, or international stocks those areas will start to trend, and trend, and trend, for months on end. If the mutual funds you bought to hold 2 years ago don't hold the kind of stocks that are being favored by the market at the time, then they will languish month after month under performing the major indexes and occasionally even lose money when the rest of the market is going up. This is why it's critically important to constantly upgrade your holdings to funds which are out-performing the others over the recent past in order to focus your investments in those funds which are holding the stocks that the major institutions are accumulating at the time.

Before jumping into the market though you want to analyze overall market conditions to determine whether the market currently has a positive or negative bias. The 401k Maximizer Major Market Analysis tells conservative and moderate risk investors whether it's safe to be fully invested or partially invested in the safety of a money market fund as we walk forward in time.

This whole issue is so important it forms the backbone of our approach to the market. At 401k Maximizer we look at 7 different measures of underlying market internals, sometimes referred to as market breadth, of both the NASDAQ and the NYSE to determine how aggressive our fund recommendations should be. These market internals gauge the strength of both the NASDAQ's and NYSE's up volume, down volume, advancing issues, declining issues, accumulation, distribution, and trend strength on a weekly basis. All of this information forms a consensus of either positive or negative market bias displayed by two simple indicators for each index. We show both of these indicators to our subscribers in every month end newsletter. The indicators then drive our recommendations about whether it's safe to be fully invested or partially invested in the safety of fixed income investments at the time.

The second key component of any successful method to manage our 401k funds with is a fund selection system. 401k Maximizer uses an enhanced ranking method based upon each fund’s multi-period weighted returns. This approach is considered one of the most robust mutual fund selection techniques available and has been used very successfully for years by professional money management firms specializing in mutual fund up-grading.

Which investment method is best for me? Risk vs. Reward

The Aggressive method stays 100% invested in the best ranked funds on a rolling month to month basis. This allows investors who don't like adjusting their market exposure to account for current market conditions, to stay invested in the highest ranked funds. In most market conditions, short of a bear market, the Aggressive method will probably outperform the Moderate and the Conservative risk approaches, but not by a lot, and clearly not enough so that subscribers approaching retirement, or in retirement, or subscribers who just don’t want to see their account values decrease a lot from their peak values should follow the Aggressive approach.

Conservative and Moderate risk portfolios reduce their market exposure by holding a portion of the total portfolio in either money market funds or fixed income investments to lower portfolio volatility when the bias of the market becomes negative.

There are several other value added features of the 401k Maximizer system that you'll want to carefully consider, including:

Ease of Use
Clear, user friendly, presentation
Specific Recommendations for Conservative, Moderate and Aggressive investors
Monthly market perspective to clarify when it’s prudent to reduce your market exposure and when to get fully invested in top ranked funds with a positive market bias.

Why spend all the time upgrading my 401k holdings every month? I feel more comfortablejust buying and holding 4 or 5 good funds.

One of the golden nuggets of any 401k plan is the ability to upgrade to the best performing funds monthly without worrying about short term capital gains taxes and the commissions you would incur trying to do this through a normal low cost broker. Consider this, the commission to buy and sell a fund from a low cost broker outside of the 401k plan might run $50 to $100 per month every time you made a change. Then multiply this times holding 5-6 funds at a time and you can see how the expenses alone can kill your performance very quickly.

To see the real power of constantly upgrading to the best performing funds on a rolling month to month basis let's compare similar gains in the market with a buy and hold system versus an upgrade system. Hypothetically, we're going to make 2 investments. In our first investment we buy fund ABC at the beginning of the year and hold it for the entire year. Let’s assume our buy and hold strategy produces a return of 20% for the year, a great return! With our second investment we buy fund ABC at the beginning of the year and then sell it several months later with an 8% gain. Our model now says to buy fund DEF which we purchase and hold for a 7% gain. Next, the model says to buy fund GHI which we hold for a -2% loss. Finally, our model says to buy fund JKL which we hold to the end of the year for a 7% gain. Now by the end of the year our upgrading has produced what appears to be a similar 20% gain = +8%, +7%,-2%, +7% but in reality we made more money than buy and hold. Our buy and hold approach gained 20% but our upgrading produced a yearly gain of 21.18%!!

How is this possible? It's because when we continually upgrade to the best performing funds throughout the course of a year we are constantly leveraging our gains from the previous investment into our new investment. To make this clearer from the example above after our first gain of 8% a $100 starting value is now worth $108. So when we make the next purchase with a gain of 7% we are realizing a gain of 7% on our original $100 investment plus a gain of 7% on the $8 gain from the first investment. Remember that our account had grown to $108 before we made the second investment. And when you do that over and over and over again throughout the year you leverage your gains with the power of compounding again and again. It's the power of compounding gains over and over again that supercharges you returns beyond those possible using a buy and hold approach to the market.  Albert Einstein referred to the power of compounding as the 8'th wonder of the world and when you see it in practice you have to agree that not only does E = M*C*C but that compounded gains are magical!

How do I use your system?

It's easy. Just subscribe and you will receive an email message around 3 - 4 days before the end of each month announcing when new recommendations are available. This message will prompt you as a subscriber to log into the 401k Maximizer web site and Sign In to view the new Recommendations and Market Analysis. 401k Maximizer is published several days before the end of every month in order to give subscribers time to re-allocate to the new recommendations before the beginning of the new month.

Where should I designate my future fund contributions or new monthly contributions be deposited?

Where should I designate my future fund contributions or new monthly contributions be deposited?
After evaluating all of the different permutations of the different options for future fund contributions we recommend that subscribers choose to have your future fund contributions deposited into the highest ranked fund from the funds we are recommending from the complete ranking table each month. This fund is easy to find in the complete ranking table of all of the funds.

Notes: The publisher is not associated with any mutual fund or any mutual fund association. Data contained in each newsletter is gathered from reliable sources, although completeness and accuracy cannot be guaranteed. Readers desiring information about a particular fund should examine the fund’s prospectus. Performance results do not take into account any tax consequences and are not in of themselves predictive of future performance. The publisher is only providing impersonalized advice that is not tailored to the needs of any specific subscriber.  The publisher does not give investment advice or act as an investment advisor, or in a fiduciary role and the 401k Maximizer Newsletters do not provide financial planning services, or consider any client’s individual financial situation, portfolio, needs or goals.  Accordingly, the subscriber must evaluate information in the 401k Maximizer Newsletter in light of the subscriber’s own financial situation and goals. It is up to the investor to decide their risk level and investment method they choose to follow.

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 401k choices and to help every employee manage his or her own 401k plan. 401k Maximizer is a newsletter monitoring the 401k investment alternatives available to employees of US Airways.