Ronald Boller went very far in the world of investments. Then he retired.
But now there's a homecoming of sorts: Mr. Boller finds himself out of retirement, back at his old trade, and within sight of where a great idea began nearly two decades ago.
In 20 years at Owens-Illinois, Inc., Mr. Boller, an O-I vice president, started a subsidiary, Harbor Capital Advisors, and built it into a $17 billion organization - including Harbor Funds, a family of 11 mutual funds that ranked as the nation's 11th largest in the direct-sales category when O-I sold it in June.
One recent day, Mr. Boller pointed from his new offices on the 10th floor of Edison Plaza across St. Clair Street to the seventh floor of big old skyscraper at Madison and St. Clair that for years housed his operation. The structure, O-I's headquarters for many years, is now known as the National City Bank Building.
To make his homecoming complete, Mr. Boller has hired one of his early O-I employees to work with him in his new role, as a principal in Findley Davies Investment Consultants.
Mr. Boller retired from O-I at the end of 1999 but worked as a consultant through 2000, while O-I sought a buyer for its Harbor Funds, which were often highly ranked by such publications as Money and Consumer Reports magazines and the Wall Street Journal. The eventual buyer, Dutch-based Robeco Groep N.V., paid $490 million for the funds and in recent months has added two more funds.
“My plan was to live in Phoenix in the winter, stay here in the summer,” said Mr. Boller. “But within two months, I was nearly dying of boredom. I had been going so fast, doing so much for so long, I wasn't emotionally prepared to retire.”
So he put together a business plan for what became the fee-only investment-consulting arm of Findley Davies, Inc., a Toledo benefits consulting firm. In the meantime, he discovered that Betty Csehi, who had worked for him for years at O-I, had gone back to school to get her MBA at Bowling Green State University. “I asked her to read the business plan, and I was thrilled for the chance to get her back,” he remarked. “She's my `factory manager.' She runs the computers.”
During his year or so of total retirement, Mr. Boller discovered that “in Arizona the air is clear, and you can do some clear thinking. I wrote down what worked for me over the last 20 years.”
For starters, Mr. Boller came to the conclusion that most 401(k) plan investors don't diversify enough. And he figured out that many employers are not prepared to analyze the thousands of mutual funds to find the ones that might be best for their workers.
He came up with this approach: “Benchmark” publicly traded mutual funds, not against a popular index like the Standard &Poor's 500 or the Russell 2000, but against a series of portfolios that have stood the test of time. Assemble the selected fund into a computer-sorted mix based on risk, cost, and risk-adjusted return. (“They are all, to some extent, forecastable.”) And then, perhaps, the hard part: Get plan participants to spread their risk among more choices.
The number of investment choices for 401(k) holders has doubled to 10 to 12 in the last five years, Mr. Boller pointed out. “But participants, on average, are holding just three to four of them.”
He believes most 401(k) account holders should hold at least some of each investment available to them - except for money-market or “stable-value” funds, which are really intended as savings vehicles.
However, how to blend them, and in what proportions, “comes down to algebra,” he said. “Diversification is your best friend. Getting the mix right is the key.”
He also believes that plan sponsors and participants have to work at it.
A couple of Mr. Boller's other thoughts, brought back to Toledo from his “clear-air” thinking time in Arizona: “When you reach 55, or 60, or 80, keep in mind who the money is really for. You should never drop below 50 percent in stocks [as a portion of total portfolio] unless you need the money right away ... Nobody enjoys taking risks. We're all [to some extent] risk-averse. You take risk because you need to earn money.”
Homer Brickey is The Blade's senior business writer. E-mail him at firstname.lastname@example.org.