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How to Build Your Own JetBlue 401(k) Portfolio

By David J. Blount, CFP


Empower yourself to take control of your financial future by building a JetBlue 401(k) portfolio that aligns with your risk tolerance and retirement goals.

While some 401(k) plans may not include target risk funds in their offerings, there's still an opportunity to craft a personalized alternative. This guide is designed to walk you through the process of creating your own diversified portfolio by strategically utilizing the investment options available within your plan.


Implementing Target Risk Investing with JetBlue

Target risk funds are a type of mutual fund investment that allows investors to allocate their savings based on a specific level of risk that they feel comfortable with or is compatible with their retirement plan. Once the allocation is set, it is meant to remain relatively constant, aside from occasional adjustments to keep it balanced. The fund manager or yourself for the purposes of this article would be responsible for making sure that the level of risk stays within the target range. Target risk funds and portfolios are usually labeled as "conservative," "moderate conservative," "balanced," "growth," or "aggressive growth" to indicate the level of risk involved. Conservative approaches have less stocks and lower risk, while aggressive growth portfolios have more stocks and higher risk. Target risk funds allow investors to adjust their risk in response to personal life changes.


Determine Your Target Risk

The JetBlue 401(k) plan does not include target risk funds. However, you can still create your own target risk portfolio by using the available investment options in your plan. The first step involved includes determining your risk tolerance.  Empower may have a risk tolerance questionnaire available upon request or on their website or you can call us for help with this step.  In the next section, we will explain how to create a portfolio that matches your target risk using the mutual funds available in the plan. 


Constructing the Portfolio

Armed with your target risk, the next step involves assembling your portfolio. Diversification is key, encompassing a variety of different investments also known as asset classes.  Common asset classes include the following.

  • Large, medium, and small company stocks (both domestic and foreign)

  • Bonds of different durations and qualities (long, intermediate, short term)

  • Sector Investments such as Commodities, Precious Metals and Real Estate Trusts


Risk Hierarchy

Investment ranked by historical risk, from least risky to riskiest:

  1. Money Market/Stable Value/Short-Term Bonds

  2. Intermediate-Term Bonds

  3. Long-Term Bonds

  4. Large Company Stocks (>$10 billion)

  5. Mid-Sized Company Stocks ($2-$10 billion)

  6. Small-Sized Company Stocks (< $2 billion)

  7. International Developed Markets Stocks

  8. International Emerging Markets Stocks

  9. Commodities (Real Estate, Metals, Oil, etc.)

By strategically diversifying across these investments, you can effectively manage and tailor the risk level according to your preferences.


Example Portfolios:


Moderately Conservative

Approximately 40% Stocks and 60% Bonds / Cash Alternatives

A moderate conservative investment objective seeks to provide moderate current income, low capital appreciation and moderate capital preservation.


 

Balanced

Approximately 60% Stocks and 40% Bonds / Cash Alternatives

A balanced investment objective seeks to provide low current income, moderate capital appreciation and low to moderate capital preservation.


 

Growth

Approximately 80% Stocks and 20% Bonds / Cash Alternatives

A growth investment objective seeks to provide little current income, high capital appreciation and low capital preservation.


All examples are for illustrative purposes only and not intended to provide specific advice or recommendations for any individual. Consult your financial advisor to determine which investment(s) may be appropriate for you prior to investing.    


Target Risk Portfolio Asset Class Worksheet

Please find below an investment worksheet to help you match the available funds in your 401(k) to the corresponding asset classes. Remember, not all asset classes may be represented in your 401(k)-fund list but do your best to match them based on the available options.


The best Target Risk for me is:


Fund Name Percentage


Large Company Stock Funds

                                                                                                                                                                      


Mid-Sized Company Stock Funds

                                                                                                                                                                      

                                                                                                                                                                      


Small-Sized Company Stock Funds

                                                                                                                                                                      

                                                                                                                                                                      


International Stock Funds

                                                                                                                                                                      

                                                                                                                                                                      


Bond Funds

                                                                                                                                                                      

                                                                                                                                                                      


Cash Alternatives / Stable Value Funds

                                                                                                                                                                      

                                                                                                                                                                      



About Us

David is President and CEO of Investment & Insurance Planning Services, LLC (IIPS), an independent and fee-based financial services firm that helps clients establish their financial goals and create custom financial plans to help them pursue those goals. We specialize in working with pre-retirees, individuals in a career transition, L3 Harris engineers, and JetBlue pilots. David’s motivation comes from seeing his clients pursue their goals. He says, “It’s very rewarding to help people make successful transitions from one career to another, start a small business, or retire.”


David received his bachelor’s degree from Troy University, and prior to becoming a financial planner in 2000, he had a nine-year career in the United States Coast Guard. He obtained the CERTIFIED FINANCIAL PLANNER™ designation in 2007. He has served as the guest financial expert on Orange Television’s Adult Lifestyle Magazine Show and frequently provides financial and retirement planning workshops. Outside of work, he enjoys spending time with his wife, Michelle, their two kids, Ryan and Alana, their dog, Jack, and visiting with friends. An avid outdoorsman, he enjoys fishing, hiking, exercise, and as a committed person of faith, he enjoys attending church and is passionate about helping people in his community. To learn more about David, connect with him on LinkedIn.


Parts of this article were enhanced with the help of artificial intelligence.


The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.


The professionals at Investment & Insurance Planning Solutions do not provide fiduciary services to JetBlue’s retirement plan. Individual investment advisory services are provided separately from any retirement plan consulting services you may receive as a result of your participation in your employer’s retirement plan and involve a fiduciary standard of care, advisory agreement and/or an additional fee.


Descriptions of plan features and benefits are subject to the plan document, which will govern in case of inconsistencies.


This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.


Stock investing includes risks, including fluctuating prices and loss of principal.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.


Investing in Real Estate Investment Trusts (REITs) involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.


Investing in mutual funds involves risk, including possible loss of principal. Fund value will fluctuate with market conditions and it may not achieve its investment objective.


ETFs trade like stocks, are subject to investment risk, fluctuate in market value, and may trade at prices above or below the ETF's net asset value (NAV). Upon redemption, the value of fund shares may be worth more or less than their original cost. ETFs carry additional risks such as not being diversified, possible trading halts, and index tracking errors.


An investment in a target date fund is not guaranteed at any time, including on or after the target date, the approximate date when an investor in the fund would retire and leave the workforce. Target date funds gradually shift their emphasis from more aggressive investments to more conservative ones based on the target date.


There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.


All investing involves risk including loss of principal. No strategy assures success or protects against loss.

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