401k Investing for Newbies and Nerds
There are 90 million American workers who have collectively own $14 trillion in their 401k accounts. They face both challenges and opportunities. The largest opportunity is that their accounts are investment accounts, not savings accounts, and for the past three decades, many have grown their balances in the low double digit range. Those with the highest return have constructed portfolios that focus on index funds and avoided target date funds.
The main challenge 401k owners face is that there are required to make their investment decisions by choosing from a limited menu of mutual funds. 42% of 401k participants have found that including index funds in their portfolio has provided them with results that optimize their investment experience.
The 90 million 401k account owners can be divided into 3 categories. The first are those who could care less about their money and are willing to just take what they are given. The second group, NEWBIES, are inexperienced in the investment process, but are willing to become engaged in the management of their hard-earned dollars. The third group, NERDS, are those who have a modicum of investment expertise and are willing to devote the time and energy to expand their investments skills.
My mission is to motivate 401k participants and their employer plan providers to become engaged in their account and then train them how to optimize their results.
I have a 62-years of stock market experience. I have been a stockbroker, finance professor and individual investor. I have no investment products to sell. All I have to offer are the objective observations of one who has been there and done that.
401k Investing for Newbies and Nerds
Season 1, Episode 7 The World is Coming to an End - AGAIN!!
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According to a small gaggle of self-appointed fortune tellers in the financial media, the market is on the verge of a horrific collapse, hurling all non-believers into a fiery pit. The cause of this rapidly approaching market apocalypse is the S&P 500’s concentration in the magnificent Seven; Apple, Amazon, Google, Facebook, Microsoft, Nvidia, and Tesla. Last year, more than half of the S&P 500’s 26 percent gain came from these seven companies. In this exciting episode of my podcast, I will provide a way for 401(k) participants to benefit from Mr. Market’s recent hissy fit.