7 ms·

>high-cost actively managed funds offered by most 401k plans underperform low-cost index funds The keywords are "offered by most 401k plans". Within the univer

>high-cost actively managed funds offered by most 401k plans underperform low-cost index funds The keywords are "offered by most 401k plans". Within the universe of funds out there, it was utterly shocking to me how bad the funds offered in your typical 401k plan were. I honestly think they just stick random kids 3 years out of college to run them.

msmith 14y ago
I occasionally read about people's 401K options on the Bogleheads forum [1]. You're right, many of them are shockingly bad. Startups and small companies are especially likely to have poor options. The solution is for employees to become better educated and demand better plans. This Frontline program does a pretty good job of getting the message out. [1] http://www.bogleheads.org/forum/viewforum.php?f=1 http://www.bogleheads.org/forum/viewforum.php?f=1
- hkmurakami 14y ago
  I'm starting to see a striking similarity between the financial products industry and the social gaming industry. Both sectors (at least traditionally) have a large fraction of their business derived from unsophisticated, unaware customers, whether it be 401k users or social gaming "whales". "Business" in general seems to be bimodal in making money from (a) providing value to sophisticated players, or (b) gouging the unsophisticated players (long tailing it) with a shitty product.
  - rayiner 14y ago
    > "Business" in general seems to be bimodal in making money from (a) providing value to sophisticated players, or (b) gouging the unsophisticated players (long tailing it) with a shitty product. This is much of the consumer products/services industry these days. See, e.g., Applebee's.
    - tptacek 14y ago
      What does the sophisticated Applebee's customer buy?
      - jplewicke 14y ago
        They order from Applebee's secret menu, which is centered around obscure cuts of locally raised meats that are prepared slowly using sous-vide and finished with pan-searing.
        tptacek 14y ago
        True facts: all Chipotle pork is cooked sous vide, and (last I checked) in Chicago.
        rayiner 14y ago
        The wife and I love Chipotle. I had no idea they cooked the pork and barbacoa in Chicago.
      - rayiner 14y ago
        I'm not sure what is left these days. The casual family dining places have all redone their menus for the worse. Longhorns used to have shaved Parmesan on their salads, but last time I went, it was Parmesan powder from a bottle! Applebee's went downhill majorly since the early 2000's as well after their menu redesign.

msmith 14y ago

I occasionally read about people's 401K options on the Bogleheads forum [1]. You're right, many of them are shockingly bad. Startups and small companies are especially likely to have poor options. The solution is for employees to become better educated and demand better plans. This Frontline program does a pretty good job of getting the message out. [1] http://www.bogleheads.org/forum/viewforum.php?f=1 http://www.bogleheads.org/forum/viewforum.php?f=1

hkmurakami 14y ago
I'm starting to see a striking similarity between the financial products industry and the social gaming industry. Both sectors (at least traditionally) have a large fraction of their business derived from unsophisticated, unaware customers, whether it be 401k users or social gaming "whales". "Business" in general seems to be bimodal in making money from (a) providing value to sophisticated players, or (b) gouging the unsophisticated players (long tailing it) with a shitty product.
- rayiner 14y ago
  > "Business" in general seems to be bimodal in making money from (a) providing value to sophisticated players, or (b) gouging the unsophisticated players (long tailing it) with a shitty product. This is much of the consumer products/services industry these days. See, e.g., Applebee's.
  - tptacek 14y ago
    What does the sophisticated Applebee's customer buy?
    - jplewicke 14y ago
      They order from Applebee's secret menu, which is centered around obscure cuts of locally raised meats that are prepared slowly using sous-vide and finished with pan-searing.
      - tptacek 14y ago
        True facts: all Chipotle pork is cooked sous vide, and (last I checked) in Chicago.
        rayiner 14y ago
        The wife and I love Chipotle. I had no idea they cooked the pork and barbacoa in Chicago.
    - rayiner 14y ago
      I'm not sure what is left these days. The casual family dining places have all redone their menus for the worse. Longhorns used to have shaved Parmesan on their salads, but last time I went, it was Parmesan powder from a bottle! Applebee's went downhill majorly since the early 2000's as well after their menu redesign.