Retirement savers making costly 401(k) errors

[tman]

http://www.msnbc.msn.com/id/24569142/

[InsultComicDog]

Maybe they're errors, or maybe they just are comfortable with more risk. There's always some "expert" who thinks they know what everyone else should invest in.

 

The average investor probably does about as well as the average so-called expert.

[kevatucr]

Maybe they're errors, or maybe they just are comfortable with more risk. There's always some "expert" who thinks they know what everyone else should invest in.

 

The average investor probably does about as well as the average so-called expert.

 

The average investor only has a return of 2.6% because they try to do things like time the market (see link). So I'm not the least bit surprised that they make poor decisions with their 401K either.

 

http://articles.moneycentral.msn.com/Inves...ithJust100.aspx

[Circus]

So this article suggest that buy and hold is the only way to go followed by suggesting to buy an ETF, which are not exactly designed to be bought and held!

 

Then, right after talking about subpar returns the article proposes basically buying an index fund with a 4% load ($4 transaction on a $100 investment)...

 

Uh...no thanks.

 

I also love the "market timing bad, m'kay" attitude in these articles. They always seem to imply that anyone who doesn't simply buy and hold is a "market timer" and therefore somehow an salamander.

 

Whatever...

[kevatucr]

So this article suggest that buy and hold is the only way to go followed by suggesting to buy an ETF, which are not exactly designed to be bought and held!

 

Then, right after talking about subpar returns the article proposes basically buying an index fund with a 4% load ($4 transaction on a $100 investment)...

 

Uh...no thanks.

 

I also love the "market timing bad, m'kay" attitude in these articles. They always seem to imply that anyone who doesn't simply buy and hold is a "market timer" and therefore somehow an salamander.

 

Whatever...

 

Actually their advice is for starting out for people who can only afford $100 a month. Later down the road it suggests they move to mutual funds. Let's say you had $10,000 to invest. Then the "load" with sharebuilder would be .04%. The main point of the article is that it is diversification among commodities, various cap stocks, international, bonds, and real estate that beats the stock market alone over time. And yes, the empirical research does suggest that the typical market timer is "somehow an salamander" and actual market timers averaged a 2.6% (before taxes) return over time (1984-2002) when the market averaged 12.2%.