Studies Show the Less You Do With Your 401(k), the More You Earn
Sometimes, it helps to hear this type of thing from an independent source. As we have said before, we don’t fix our own cars, why should we be expected to be professional investment managers?
Don’t take this too personally, but the less you are involved with investment decisions for your 401(k) the better off you may be.
A new study of more than 400,000 401(k) participants in seven corporate plans found that the median return earned by individuals who sought out help in managing their 401(k) was 1.86 percentage points more than participants who made their own allocation/investment decisions.
Read Entire Article at MoneyWatch.com
This has always been an interesting phenomenon with investing with any type of account.
Fear of loss and greed for more gain create knee-jerk reactions by investors to trade AFTER significant market movements. Thereby setting the portfolio perfectly out of position for any subsequent swings in the opposite direction.
One of the PRIMARY functions of an advisor is to become become a barrier between an investor and their portfolio, so fear and greed do not interfere with uneven portfolio growth.