Today's investment education should be lessModern Portfolio Theory and more behavioral economics. (Photo:Shutterstock)

Which question do you think the typical retirement planparticipant could answer the quickest: “What is the long-termimpact of your asset allocation on the growth of your retirementplan?” or “What is the immediate impact to your weekly spending if you contribute $10 more apaycheck into your 401(k)?”

Therein lies the reason we no longer see hours of employeeeducation dedicated to style boxes, growth versus valuedefinitions, and other remnants of Modern Portfolio Theory. Thetruth of the matter is people just don't need to know thatstuff.

Christopher Carosa, CTFA, ischief contributing editor for FiduciaryNews.com, a leading providerof essential news and information, blunt commentary and practicalexamples for ERISA/401(k) fiduciaries, individual trustees andprofessional fiduciaries.

Gone are the days when everyone watched CNBC in anticipation ofsneaking off to some hidden cubicle to place a few day trades.Remember those days? Everyone amped to discover the latestsure-thing “home run” stock. In fact, today, according to aDecember 2018 Business Wire release, “CNBC recorded itssecond-lowest rated year in the past 25 years.” Face it, believers,high finance simply doesn't generate the highs it once did.

And that's a good thing. People have much greater dreams than tounderstand and contemplate the intricacies of the capital markets.To the extent anything regarding their company's retirement planimpacts their daily lives, their interest will be greater (andtheir eyes less tired) if the subject turns to topics which theycan actually control in an immediate way.

Yes, they control which investments they select, but the resultsof that “control” aren't instantly felt. They have a similarcontrol over their savings rate, and the impact of that decision issomething they can see right away.

Does this sound counterintuitive? You'd think that quick impactwould frighten them away. It doesn't.

Feeling the results of your decision, rather than scaring youaway, actually leads to greater satisfaction in that decision. It'sa form of a “self-justification” response. Contrast this with yourthoughts when you don't know the outcome of a decision for a longtime. You grow anxious. You begin to question the validity of yourchoice. You draw closer to reversing what may have originally beena sound decision made dispassionately.

As your emotions peak, they tempt you to select a lessappropriate path. No one wants to go down that path; hence, thepopularity of target date funds and other QDIAs. Why make adecision when you don't have to?

Allow me to amend that last statement: Why make an investmentdecision when you don't have to?

This doesn't mean we should forsake investment education foremployees. We don't need to reject reiterations of fancy formulasattempting to explain the machinations of the Capital Asset PricingModel and those ubiquitous asset allocation pie charts. Rather, wemust focus on the traps investors allow themselves to fall preyto.

This requires investment education be less Modern PortfolioTheory and more behavioral economics. It's not about offense andfinding home runs. It's about defense and hitting singles.

It's far easier to stay ahead when you don't have to worry aboutcatching up after falling behind.

Read more:

• 8 money problems financial education could haveavoided
• Here's the top driver of investmentdecisions
• Retirement's future could rest with digital tools,behavioral economics