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Is Your Carter's Retirement Portfolio Spreading Itself Too Thin?

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'Thoughtful diversification for Carter's employees means strategically selecting a balanced mix of assets to help manage risk and support long-term objectives, rather than simply chasing breadth,' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

'Effective diversification for Carter's employees hinges on deliberate asset selection and ongoing oversight to balance risk without sacrificing clarity,' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss

  1. The advantages and potential drawbacks of diversification for Carter's employees.

  2. Key asset classes and strategies for maintaining balanced portfolio stability.

  3. Practical steps to identify and eliminate over-diversification and hidden risks.

Overview

Diversification is frequently praised as the foundation of prudent portfolio management—a notion underpinning modern portfolio theory for decades. However, excessive or misdirected diversification can dilute returns, obscure strategic intent, and incur needless expenses, even though distributing investments across several asset classes can help mitigate volatility. Wealth Enhancement financial advisors Tyson Mavar and Patrick Ray highlight that balance and purpose are essential for meaningful diversification. Ray notes that while diversification can help lower volatility and correlation, overdoing it may actually weaken returns and cloud your portfolio’s strategy.

Diversification’s Justification

Fundamentally, diversification aims to mitigate portfolio risk by combining assets with different return profiles. Historically, a balanced allocation—roughly equal parts high-quality fixed income and stocks—has yielded annualized returns near  8% , with volatility around  10% . In contrast, an all-equity portfolio has delivered roughly  15%  annualized returns over the same timeframe, at a similar level of volatility. This illustrates how bonds can cushion stock declines without significantly hindering long-term growth. “You’re never going to love every holding in your portfolio at the same time,” Ray explains, noting that uncorrelated assets often smooth performance—even if some holdings lag, others will likely thrive.

Cash and Treasury Bonds: Two Foundations of Stability

U.S. Treasury bonds are among the most reliable diversifiers against equity downturns, helping to softenthe blow of market sell-offs. “Treasuries have historically done a great job mitigating downturns,” Mavar notes. Once viewed as a drag on returns, cash has regained popularity amid higher short-term interest rates. Cash yields now offer both steadiness and optionality, often rivaling or surpassing lower-quality fixed income.

The Drawbacks of Excessive Diversification

Even the adage “more is better” can backfire when applied to portfolios. Juggling too many positions creates management headaches and dilutes conviction. “Many asset types promise diversification but fail to deliver,” warns Ray. Lower-quality bonds often behave like equities under stress, offering little downside mitigation, while certain real estate investment trusts (REITs) now move in lockstep with broader markets. Cryptocurrencies likewise introduce speculative volatility, swapping one form of risk for another rather than serving as a genuine hedge.

Hidden Expenses and Faux Diversifiers

Retail portfolios are rife with “faux diversifiers”—crowded alternative investments, niche hedge funds, or exotic strategies that boast diversification but deliver little. These holdings often carry higher fees, complex structures, and opaque risk profiles. “Once you move beyond simple, low-cost asset classes like stocks and Treasuries, you usually pay more without earning better risk-adjusted returns,” Ray cautions.

Duplication: The Silent Portfolio Eroder

Unintentional overlap can be the stealthiest form of over-diversification. Investors may hold multiple mutual funds or exchange traded funds (ETFs) tracking the same sectors or benchmarks, all while believing they’re diversified. Mavar observes that many clients unknowingly double up on identical exposures, complicating performance analysis and obscuring true risk. Holding individual blue-chip stocks alongside ETFs containing the same names adds little incremental diversification.

Tax Considerations and Strategic Cleanup

When over-diversification or duplication sneaks in, a methodical portfolio “cleanse” can help restore clarity and efficiency. Rebalancing within tax-deferred vehicles such as 401k plans or IRAs is typically straightforward, but selling positions in taxable accounts may trigger capital gains taxes. Mavar suggests phasing trades or waiting for market pullbacks to mitigate tax impact and optimize after-tax returns.

An Equitable Method for Diversification

True diversification isn’t a free-for-all or cure-all; it’s a deliberate tool to manage risk, stabilize returns, and preserve flexibility. As Ray puts it, “Good diversification is about strategy, not quantity.” Choose just enough variety to manage risk without losing sight of your portfolio’s objectives.

Mark Twain’s Basket

“Watch that basket—put all your eggs in one basket—and make sure you watch that basket.”

Make sure your basket is sturdy, aligned with your long-term goals, and free from needless complexity. Thoughtful asset selection, disciplined construction, and ongoing oversight can help Carter's employees navigate market cycles and follow a clear path toward their retirement objectives.

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Sources:

1. Investopedia. “ Nearing Retirement? Here’s How to Get Your Investment Mix Just Right ,” by Rachel Hanley, 1 Apr. 2025.

2. Morningstar. “ Our Best Investment Portfolio Examples for Savers and Retirees ,” by Margaret Giles, Christine Benz, 14May 2025.

4. CFA Institute. “ Diversification During Hard Times .”  Financial Analysts Journal , vol. 79, no. 2, 2 Feb. 2023, pp. 1–2. 

5. Kiplinger. “ 10 Best Target-Date Fund Families ,” by Coryanne Hicks, July 2025.

6. Damodaran, Aswath.  Historical Returns on Stocks, Bonds and Bills: 1928–Current . NYU Stern School of Business, https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html. Accessed 4 Aug. 2025.

What type of retirement savings plan does Carter's offer to its employees?

Carter's offers a 401(k) retirement savings plan to its employees.

Is participation in the 401(k) plan at Carter's mandatory?

Participation in Carter's 401(k) plan is voluntary for employees.

What is the eligibility requirement for Carter's 401(k) plan?

Employees at Carter's are eligible to participate in the 401(k) plan after completing a specified period of employment, typically outlined in the employee handbook.

Does Carter's match employee contributions to the 401(k) plan?

Yes, Carter's offers a matching contribution to employee contributions made to the 401(k) plan, subject to certain limits.

How can employees at Carter's enroll in the 401(k) plan?

Employees can enroll in the Carter's 401(k) plan by completing the enrollment process through the company's benefits portal.

What types of investment options are available in Carter's 401(k) plan?

Carter's 401(k) plan offers a variety of investment options, including mutual funds, stocks, and bonds, allowing employees to choose based on their risk tolerance.

Can employees change their contribution percentage to the 401(k) plan at Carter's?

Yes, employees at Carter's can change their contribution percentage to the 401(k) plan at any time, subject to plan rules.

What is the vesting schedule for employer contributions in Carter's 401(k) plan?

The vesting schedule for employer contributions in Carter's 401(k) plan is detailed in the plan documents and typically requires employees to work for a certain number of years before fully owning the employer match.

When can employees at Carter's withdraw funds from their 401(k) accounts?

Employees can withdraw funds from their Carter's 401(k) accounts upon reaching retirement age, or under certain circumstances such as financial hardship, as defined by the plan.

Does Carter's provide educational resources for employees regarding their 401(k) plan?

Yes, Carter's provides educational resources and workshops to help employees understand their 401(k) plan options and investment strategies.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.
401(k) Plan Adjustments: Carter's has updated its 401(k) plan to increase the company match from 4% to 5% of employee contributions. This adjustment aims to enhance employee retention and attract new talent amidst a competitive labor market. With ongoing economic uncertainties, this change helps employees save more for retirement and provides a stronger financial cushion.
Layoffs and Restructuring: In early 2023, Carter's announced a reduction in workforce as part of its restructuring plan aimed at streamlining operations and reducing costs. The company indicated that the layoffs were necessary to improve operational efficiency and align with shifting market demands.
Stock Options: Stock options typically give employees the right to purchase company shares at a set price after a certain period. Carter's stock options are generally offered to senior executives and key employees as part of their compensation package. RSUs: Restricted Stock Units are company shares given to employees as part of their compensation, but with restrictions that typically lapse over time. RSUs at Carter's are usually provided to a broader group of employees including managers and senior-level staff. Specific Information by Year
Recent Employee Healthcare News: Summarize any recent news affecting employee healthcare at Carter's. Research Sources Official Website: Look for health benefits information in the company's careers section or employee resources area. News Websites: Search for recent articles or press releases related to Carter's employee health benefits. Industry Reports: Check industry-specific reports or news platforms for relevant updates. HR and Benefits Sites: Explore HR or benefits management websites for detailed insights. Financial and Business News: Look into financial news platforms for any relevant updates on employee benefits. Steps to Perform the Search Official Website: Visit Carter’s official website and navigate to the careers or employee benefits section. Google Search: Perform a Google search with keywords such as "Carter's health benefits 2022 2023 2024" and review the top results. Industry-Specific Sources: Check HR and benefits management websites such as SHRM.org or BenefitsPro.com. Business News Sites: Explore business news sites like Bloomberg or Reuters for relevant updates.
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For more information you can reach the plan administrator for Carter's at 3438 Peachtree Rd. NE Atlanta, GA 30326; or by calling them at +1 404-745-2700.

https://www.microsoft.com/benefits https://www.thelayoff.com/ https://www.businessinsider.com/ https://www.reuters.com/ https://www.bloomberg.com/

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