Are You an Investor or a Collector?

Our friend Carl Richards of BehaviorGap.com and the NYTimes.com Bucks blog has done a great job of illustrating how the ‘over diversification’ of portfolios can simply be ‘buying more’ instead of ‘buying different.’

Over- or under-diversifying your investments remains one of the classic behavioral mistakes.

Over-diversification happens when we become collectors of investments instead of simply being investors. Think of the people who buy the mutual funds they read about in Smart Money magazine. Next year they buy the Top 10 Funds recommended by Money magazine. A year later they buy two or three new international funds because that’s what’s on the home page of Forbes.

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2011 IRS Contributions Limits for Your 401k/403b

Last week, the IRS released the contribution limits for 401k/403b investors, and the amounts remain unchanged for 2011. Here are the numbers:

Elective Deferral (traditional limits) – $16,500
Catch-up Contribution for Investors 50 yrs and Older – $5,500
The reality is, your contributions to your 401k/403b is the #1 reason for your success as an investor. Here are some strategies for increasing your contributions:

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Final Regulation on 401(k) Advice Bill Due Early 2011

Even though it has been in the works for over four years now, it looks like we might finally receive clarification on the PPA ‘Fiduciary Adviser’ 401(k) advice regulations early next year. Understandably, with the many issues that have garnered more press such as the healthcare debate, 401(k) fee disclosure and target date funds, the regulations have been delayed.

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Market Forecasts, a.k.a. Market Guesses

Soothsayer. Prognosticator. The illusory crystal ball. The market forecasts that are lauded by the media…whose goal is to sell advertising…are simply speculation. We have told investors since day one that no one truly knows what the market is going to do by the end of the week, month or year. If you meet someone that claims they do…run…in the oppositive direction. Fast.

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