Wall Street for Dummies
Eighty million American workers actively participate in their companies 401(k) plan. Collectively, they have $12 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 devoted 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
Season 1 Episode 19 The Weatherman, Tariffs and your 401(k) Plan
In this stop on my 62-year journey along Wall Street, I discuss the evolving nature of the stock market. Today’s market is not your father’s market. Sixty years ago, less than 3 percent of the American public owned stock. Today that number is north of sixty percent and growing. Sixty years ago, Wall Street brokers were the gate keepers to the equity markets. Today, eighty million American investors make their own investment decisions using discount brokers and index funds. And outperform the pros, to boot!!
The fees charged by the Wall Street mavins are based upon their alleged ability to predict individual stock prices and market movements. After six decades as a stock market observer and participant, I have concluded that Wall Street analysts and TV weather people are distant cousins.
We are about to enter the Q2 earnings report season, and according to Yahoo Finance, investors are waiting with bated breath for the release of those numbers. In this episode, I discuss Wall Street’s ability to predict stock prices and market movements and comment on their usefulness.
The episode concludes with observations on how 401(k) participants can leverage the 401(k) infrastructure to outperform the Wall Street pros.