401k Investing for Newbies and Nerds
There are one hundred and thirty million American workers who collectively own $35 trillion in their 401k and related retirement accounts. The owners of these accounts face both challenges and opportunities. The largest opportunity is that their accounts are investment accounts, not savings accounts, and for the past three decades they have grown in the low double-digit range.
The main challenge 401k owners face is that there are required to make their own investment decisions by choosing from a limited menu of mutual funds.
These 130 million self-directed retirement account owners can be divided into 3 distinct categories. The first are those who could care less about their money and are willing to just let nature take its course. 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.
The mission of my podcast is to motivate and educate 401k NEWBIES and NERDS on how to optimize their 401k experience. I have a 62-year relationship with the stock market. I have been a stockbroker, finance professor and individual investor. Ten years ago, I appointed myself to the position of 401k guru extraordinaire. 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 25 At the End of Every Straightaway is a Curve
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At the end of it every straightaway, there's a curve. But this exciting and informative episode of my podcast is not about auto racing. It's about how to preserve and grow the assets in your 401(k). In the last two years the S&P 500 has grown over 50%, and the NASDAQ, over 70%. With each passing day the number of times the word bubble appears in the Wall Street Journal increases. Wall Street Dummies understand that now is the time to keep emotions in check. They also understand that the because of the unique structure of 401(k) plans they are able to respond when Mr. Markets straightaway becomes a curve. In the following discussion I will outline these options and help you chose the one that works for you.