Diversify
Diversification, or the allocation of your assets among different investment alternatives or investment funds, can offer several advantages. For example, a combination of different investments, such as fixed-income and equity investments, generally provides for a balance of risk and return potential. You also can make smoother transitions in your customized mix of investments to meet your changing objectives. For instance, a young investor might seek investments with a high potential for return. But as years go by, and especially as retirement nears, he or she might want to focus more on preserving wealth. This investor could start with a high concentration in equity investments and gradually shift to fixed-income investments as his or her circumstances change.

Lastly, diversification can help ease investment concerns. The investment markets often respond differently to changes in economic conditions. If you spread your money among different asset classes, you may reduce the effects that a downturn in one asset class could have on your overall account’s value.

Keep a long-term outlook
As you review your investment allocation, you should concentrate on your long-term objectives. Avoid making investment decisions based on recent trends in investment performance. Instead, consider the long-term potential of your investments. The past performance of any investment does not guarantee future results. Historical, long-term average performance of an investment alternative can, however, serve as a better indicator of future potential than performance over any single, brief period. In general, the longer your investment time frame, the less you should concern yourself with short-term ups and downs in the market, and vice versa.

Caution: Retirement does not signal the end of a long investment horizon. You may spend 30 years or more in retirement, based on present-day life expectancies. It may be prudent to maintain an equity position in your investment plan during retirement. Equity investments generally can offer better long-term return potential than other investments. They may help give your retirement nest egg greater lasting potential. Equities also typically fluctuate more in value, which increases risk to principal, but you can help reduce the risk through diversification.

*Stock investments are represented by the Standard & Poor's 500 Index. The Standard & Poor's Index is an unmanaged group of stocks considered to be representative of the stock market in general. The figures include reinvestment of all dividends. Bond investments are represented by the Standard & Poor's Long-Term Government Bond Total Return Index, an unmanaged index. "Standard & Poor's" and "Standard & Poor's 500 Index" are trademarks of The McGraw-Hill Companies, Inc. Source: Ned Davis Research, Inc. Note: Based on historical returns, there is a 28.8% chance that an investment in stocks will result in a loss in any one-year period. When held for five years, the chance of a loss declines to 9.7%. There has been no 20-year period during the last 75 years that has produced a negative return in either stocks or bonds. For illustrative purposes only. Past performance is no guarantee of future results.

Dollar-cost averaging
Dollar-cost averaging is the common name for a strategy in which you invest a fixed amount of money at regular intervals in the same investment alternative. It requires regular investments, regardless of short-term market ups and downs, according to the schedule you establish. Your fixed contribution amount buys more units when prices are low and fewer units when prices are high. The objective is to invest gradually over time -- rather than agonize over when to invest and then worry if you picked the right time.

Note: Dollar-cost averaging neither guarantees a profit nor ensures against a loss. Bear in mind that to dollar-cost average, you must be economically able to continue purchases as scheduled through periods of high and low price levels.

While Mutual of America is precluded by regulations from providing you with specific investment advice, our salaried staff of consultants can help you obtain a better understanding of the interest and investment alternatives available through our variable accumulation products. Please call your local regional office if you would like to speak with one of our consultants.

For more than 55 years, Mutual of America has managed its business operations in a prudent manner. During that time, we have emphasized investment basics, maintained a long-term perspective and stayed the course. We will continue to dedicate ourselves to delivering innovative retirement savings products and services while adhering to the values that have been fundamental to our success.

The above article is for general information only and is not intended to provide specific advice or recommendations for any individual. Consult your attorney, accountant, or financial or tax advisor with regard to your individual situation.

Mutual of America Life Insurance Company is a Registered Broker-Dealer.