Wall Street for Dummies
Ninety million American workers actively participate in their companies 401(k) plan. Collectively, they have $14 trillion dollars invested in these plans. Regulations require them to make their own investment decisions by selecting from a list of mutual funds prepared by an investment professional who is compensated by the mutual funds they choose to include on the list. Last year, American workers paid $275 billion dollars in fees to have Wall Street manage their mutual funds. Over the course of the next decade is figure will exceed $3 trillion dollars.
There are those 401(k) participants who choose funds with minimal fees and superior performance. Others choose funds with high fees and subpar performance. The mission of Wall Street for Dummies is to educate 401(k) plan participants on the impact of fees on mutual funds’ performance and provide them with commentary on how to use the cost efficient and best performing funds.
I have a 62-year relationship with the stock market. I have been a stockbroker, finance professor and individual investor. For the past ten years I have conducted my professional efforts as a free-lance stock market pundit. I have no investment products to sell. All I to offer are the objective observations of one who has been there and done that.
Wall Street for Dummies
Season1 Episode 27 The Wizard of Oz and Your 401(k)
The Wizard of Oz is about a Kansas farm girl who is traveling along a yellow brick road to get to the City of Oz, home to a person with special powers whom she believes can solve all her problems. Along the way she finds some odd characters who are seeking a heart, a mind and courage. When they arrive in the presence of supposedly omnipotent Wizard of Oz, they pull back the curtain to discover that he is just an ordinary man from Omaha, Nebraska, using mechanical trickery to conceal his real self.
There is a parallel between the Wizard of Oz and your 401(k). For decades Wall Street professionals have used vocabulary to create an illusion of investment superiority. But the curtain that hid Wall Street’s truth has been pulled back and their deception has been revealed. Millions of ordinary investors have discovered that through the use of the unique features of a 401(k) and index funds, they already have the skills they need to outperform the pros. In this insightful episode of my podcast, I will explore many of the vocabulary terms Wall Street types use to distinguish themselves from ordinary strap hangers like you and I.