What is Manifest's allocation methodology?

When it comes to guiding your decisions for reallocating your retirement account, Manifest takes into account five key parameters that are crucial for your financial well-being. These parameters include your retirement age, which determines your timeline; your volatility tolerance and risk tolerance, which influence your comfort level with market fluctuations; your investment knowledge, which shapes your understanding of different options; and expected returns, which help gauge potential profitability. By analyzing these factors, Manifest strives to provide personalized advice that aligns with your unique financial goals and circumstances.

Your retirement age determines how much time you have left until you stop working and begin relying on your retirement savings. The longer your investment horizon, the more flexibility you might have to weather market ups and downs and potentially recover from any short-term losses. On the other hand, if you're nearing retirement, you might have a lower risk tolerance to preserve the wealth you've accumulated over the years. The right allocation strategy can help balance potential returns and risks based on how soon you'll need to access your funds, ensuring that your retirement account is appropriately positioned to meet your financial goals while aligning with your desired level of risk.

Volatility refers to the degree of price swings in the financial markets. If you have a high volatility tolerance, you're more comfortable with the ups and downs of the market and might be willing to invest in riskier assets that have the potential for higher returns over the long term. On the other hand, if you have a low volatility tolerance, you may prefer more stable and conservative investments that carry lower risks, even if they offer potentially lower returns.

Considering your volatility tolerance helps you strike a balance between potential returns and the level of risk you're willing to take on. It ensures that your investment choices align with your emotional and financial comfort, ultimately aiding in the preservation and growth of your retirement savings in a way that suits your individual preferences and circumstances.

Risk tolerance refers to your ability to handle fluctuations in the value of your investments without causing undue stress or jeopardizing your long-term financial goals. Understanding your risk tolerance helps you strike the right balance between pursuing potential higher returns and managing the potential for losses. If you have a higher risk tolerance, you might be comfortable with more aggressive investment choices that could lead to greater rewards over time. However, if you have a lower risk tolerance, you might prefer more conservative investments that prioritize stability and capital preservation.

By assessing your risk tolerance, you can design an investment portfolio that reflects your financial personality and objectives, ultimately contributing to a more harmonious and sustainable path toward your retirement goals.

Your investment knowledge refers to how familiar you are with different investment options, strategies, and the broader financial landscape. If you have a strong understanding of investments, you might be comfortable exploring a wider range of choices, including more complex or specialized options. However, if your investment knowledge is limited, it's important to opt for options that you can comprehend and manage effectively, avoiding investments that are overly intricate or difficult to monitor.

Considering your investment knowledge helps you make informed decisions that you're comfortable with and that you can actively manage. It minimizes the risk of making choices that are beyond your comprehension, potentially leading to unfavorable outcomes. Ultimately, aligning your investment decisions with your knowledge level promotes better control, confidence, and the potential for better long-term results in managing your retirement account.

Expected returns provide an estimate of how much your investments might earn in the future based on historical performance, current market conditions, and economic outlook. By considering expected returns, you can align your investment choices with your retirement goals. If you need higher returns to meet your goals, you might be willing to accept more risk or explore opportunities with greater growth potential. Conversely, if you're content with more modest returns and prioritize stability, you might opt for more conservative investments.

Understanding expected returns aids in finding the right balance between risk and reward, guiding you toward an investment strategy that has the potential to support your retirement aspirations while keeping your financial situation and objectives in mind.