Truth #6 of 101: The media loves to promote the wisdom and insights of managers with “hot hands” or the “Midas Touch.” They gleefully put them in advertisements and on magazine covers. These gurus are often featured one or two years later in derogatory articles about how their investing prowess has mysteriously disappeared. They die in the pages of the Wall Street Journal or Money magazine. Yet, investors want to keep thinking that picking “this” manager will be different for them. It’s not!

Mr. John Bogle, former Vanguard CEO said, “All the statistical data suggests that investors are wasting their time trying to pick active managers. Money manager Ted Aronson says that to be even 75 percent sure a manager is skillful, you’d have to track his performance for between 16 and 115 years. Let’s assume that an investor owns five actively managed funds over the portion of their investing lifetime—which might be 65 years for a twenty- year-old today. Yet on average, mutual fund managers last about five years. That means that an investor might have 65 managers over their investment lifetime. To truly believe that you’re going to pick 65 managers that will outperform the market defies credulity.”

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You Will Get Slaughtered!

Truth #5: If an investment strategy is on the cover of every magazine, and all of your friends and associates are doing it, it’s reckless to follow suit. Only hot, sexy, and speculative techniques make the cover. Magazines are primarily designed to “sell magazines” not give financial advise. Don’t follow your friends!

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Is your 401(k) Advisor a Salesman or a Fiduciary? Do you know the difference?

If you are a business owner with a retirement plan, do you understand your Fiduciary Liability? Nearly all plan providers deny that they are fiduciaries. Example: “John Hancock has filed a motion to dismiss [the litigation], arguing that it is no a fiduciary…”1

If the service provider is not a fiduciary, then trustees retain all fiduciary responsibility. That means you as the business owner have full responsibility and may be sued. (You cannot hide behind the Corporate umbrella). There are currently over 1,000 lawsuits against 401(k) trustees, alleging fiduciary liability. Would you like to shift this liability to someone else?

For a no obligation and feature comparison of your existing 401(k) or defined benefit plan with our plan, please contact me.

You can also download a FREE copy of my Investors Awareness Guide right here →

1 Charters v. Hancock, Civil Action No. 07-11371-NMG, US District Court, Mass.

TRUTH #4: No one ever prints a magazine cover with NEXT year’s top performing funds.

Not even the fund companies or brokerage companies know what funds or stocks are going to do well this year. If they did, they wouldn’t NEED hundreds of funds and managers. They would have one predictably sound mutual fund. They don’t. They hedge all of their bets. They create products for you. In reality, they have no idea what the so-called experts will produce. Don’t pick funds, don’t pick managers.

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