Today's investment education should be less Modern Portfolio Theory and more behavioral economics. (Photo: Shutterstock)
Which question do you think the typical retirement plan participant could answer the quickest: “What is the long-term impact of your asset allocation on the growth of your retirement plan?” or “What is the immediate impact to your weekly spending if you contribute $10 more a paycheck into your 401(k)?”
Therein lies the reason we no longer see hours of employee education dedicated to style boxes, growth versus value definitions, and other remnants of Modern Portfolio Theory. The truth of the matter is people just don't need to know that stuff.
Christopher Carosa, CTFA, is chief contributing editor for FiduciaryNews.com, a leading provider of essential news and information, blunt commentary and practical examples for ERISA/401(k) fiduciaries, individual trustees and professional fiduciaries.
Gone are the days when everyone watched CNBC in anticipation of sneaking off to some hidden cubicle to place a few day trades. Remember those days? Everyone amped to discover the latest sure-thing “home run” stock. In fact, today, according to a December 2018 Business Wire release, “CNBC recorded its second-lowest rated year in the past 25 years.” Face it, believers, high finance simply doesn't generate the highs it once did.
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
