Tuesday, May 19, 2009
401(k) Participatnts Stay Ahead By Rebalancing
Rebalancing your 401(k) portfolio is perhaps the easiest way to increase your investment returns, according to a new study by the Pension Resarch Council. While previous studies have shown that a consistent investment strategy outperforms most actively traded accounts, this study focuses on rebalancing. Over one million participants’ accounts were analyzed, and the results are clear.
According to the study, those who used only balanced or lifecycle funds outperformed on a risk adjusted basis.
The complete study can be found at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=942378#PaperDownload
Are your participants aware of this? Often times, there is an initial enrollment meeting, but that’s the end of it. A continuous communication program would give you an opportunity to add value and get the most out of your plan.