4 ms·
> Mostly a case of perfectly intelligent people throwing wads of money into the market on autopilot because that's all the 401k lets you do. Lambs to the slaugh
by Y7ZCQtNo39 9y ago
> Mostly a case of perfectly intelligent people throwing wads of money into the market on autopilot because that's all the 401k lets you do. Lambs to the slaughter!
That's called "buy and hold" investing (putting additional dollars you have into the market, as your paychecks come in).
Historically, it's been a great way to grow wealth. You invest in index funds, and you get basically the market return less some fees.
> expense ratio over 1.5%
This is worse-case scenario. Employers are coming around to see these fees as astronomical. Plus, well-funded 401(k)'s can get institutional rates, due to their portfolio size. We're talking expense ratio's of 0.03, 0.02, almost non-existent.
- jstewartmobile 9y agoRunning everything through the stock market doesn't seem like particularly good risk management to me. Even with a diversified portfolio, in a panic everything goes down. With something tangible, like a building, or a piece of equipment, you can still get some kind of revenue stream from the use of it while you wait for the market to recover. If Wal-Mart guy could have put some of his retirement into lawn equipment or a hot-dog cart, I'm almost certain he could make more in an afternoon with that than what Wal-Mart is paying him for a week's work.