401k Investments

The average American worker knows virtually nothing about investing and yet is expected to build and artfully manage his/her own retirement plan over the course of a working lifetime. Typically, 401(k) participants get their investment strategies willy-nilly from brokers, relatives, co-workers and plan “education” vendors. The 401(k) “education” business is mostly a dumbed-down version of modern portfolio theory; namely, own a diversified portfolio of stock funds, bond funds, and cash; overweight stocks for higher long-term returns (more if you’re young, less if older) and hold on. As a result, 401(k) accounts are mostly ignored, under-funded, and suffer from perennially poor investment performance.

401(k) investors stand a chance of half-way decent returns if they happen to be in the e...

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