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Just for clarity....index funds ARE mutual funds. They're just mutual funds that replicate the holdings of a specified index like the S&P 500, so their costs are lower than actively managed funds.
Yes, there are mutual funds that track various indices. There are managers out there that have consistently beat the indices over a complete market cycle, although they almost always have higher expense ratios.
1. The more choices there are, the less people are likely to participate in the plan in the first place. I don't know if they have automatic enrollment or not, but that would solve the problem.
2. Most people don't know what they are doing, so it's better to have fewer choices so they don't make dumb decisions.
3. You're probably not as smart or good an investor as you think you are. So I think not allowing people to buy risky inverse ETFs is a good thing.
4. The most successful investment strategies are usually boring. The most successful investors usually use fairly boring strategies. Inverse ETFs do not fit into the "boring" category. Not even close.
Disagree. It is not a bad thing to give people more investmemt choices. Employers should do a better job educating employees about investing.
Yes, there are mutual funds that track various indices. There are managers out there that have consistently beat the indices over a complete market cycle, although they almost always have higher expense ratios.
Cool. Which ones are they going to be for the next few years?
I'm glad you've had good luck with actively managed funds rather than index funds or ETFs, but you don't get to say you don't want to debate it after you say things like "The problem with index funds is becoming evident in this bear market." Clearly you don't like them (ETFs), which is your prerogative-but not everyone shares that belief, and it's not at all evident there's a problem with them.
Cool. Which ones are they going to be for the next few years?
I'm glad you've had good luck with actively managed funds rather than index funds or ETFs, but you don't get to say you don't want to debate it after you say things like "The problem with index funds is becoming evident in this bear market." Clearly you don't like them (ETFs), which is your prerogative-but not everyone shares that belief, and it's not at all evident there's a problem with them.
Correction, I used the wrong term: clearly you don’t like them (index funds). It’s still not at all evident there’s a problem with them.
Mine has a brokerage option, so I really have unlimited choices.
Not saying you company does this but they could always have a restriction list even on the brokerage account for 3x levered funds as that’s a pretty common restriction for retirement accounts connected to employer plans
Not saying you company does this but they could always have a restriction list even on the brokerage account for 3x levered funds as that’s a pretty common restriction for retirement accounts connected to employer plans
I don't have that restriction, but I would never be buying that stuff anyway LOL.
Disagree. It is not a bad thing to give people more investmemt choices. Employers should do a better job educating employees about investing.
I wish I could agree with you. I want to agree with you. But as someone with personal experience with this, once people reach adulthood, they are set in their ways. Education will work for a fairly small percentage. The majority will just have their eyes glaze over. I have seen it first hand. So. Many. Times.
Perhaps the solution is to have index funds for the majority and allow a low cost brokerage option for the rest. My plan has a brokerage option, but it is high cost and inconvenient to use.
Retirement plans are geared toward keeping people from investing badly. Most people overestimate their ability to invest well.
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