{"id":7555,"date":"2014-03-31T08:47:51","date_gmt":"2014-03-31T15:47:51","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=7555"},"modified":"2016-12-21T07:28:07","modified_gmt":"2016-12-21T15:28:07","slug":"case-ignoring-retirement-plan","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/case-ignoring-retirement-plan\/","title":{"rendered":"The Case For Ignoring Your Retirement Plan"},"content":{"rendered":"

Ignorance is bliss, as the adage goes. But should you simply ignore your\u00a0retirement\u00a0plan investments?<\/p>\n

Probably, yes. There’s a lot to be said for being just informed enough about your\u00a0retirement\u00a0plan to make a wise choice early and then letting it go on autopilot for months, if not years, to come. The trick is to make those first decisions well and then to\u00a0try hard not to second-guess your own choices<\/a>.<\/p>\n

Why not? Well, because it’s human nature to second guess and to be nervous about outcomes. Unfortunately, the investment world gives us all kinds of misleading cues and prompts to take action when, in fact, inaction is the best course.<\/p>\n

\"retirement<\/a><\/p>\n

For instance, a lot of investors nearing\u00a0retirement\u00a0age were overexposed to higher-risk equities as the market started to fall in 2008 and into 2009. Of course, as the market topped in 2007 \u00a0they didn’t sense any risk at all.<\/p>\n

Then, as stocks fell, that feeling of exposure was suddenly much more real. The decline in face value made that feeling worse and led many to a self-fulfilling prophecy of a kind: They began to sell, even though they had no reason to to do so.<\/p>\n

Predisposed to panic<\/strong><\/p>\n

The selling pushed prices down even harder and, pretty soon, we had a full-on crash under way. It was avoidable, but also unavoidable for\u00a0those who were predisposed to panic<\/a>.<\/p>\n

If those same investors had been correctly positioned in the market for their age and taste for risk, the outcome would have been far different. Their personal declines would have been less compared to the market and thus the impetus to act not as pressing.<\/p>\n

Having no reason to take action, no action would have taken place. Simple, right?<\/p>\n

So, how can you get to this kind of\u00a0retirement\u00a0nirvana? One way is to own a mix of investments geared to your age and\u00a0your retirement horizon<\/a>, that is, the number of years remaining before you need your\u00a0retirement\u00a0savings to pay living expenses.<\/p>\n

If that number is anywhere beyond 10 years, you likely need more stocks than bonds. If less, most probably the reverse. Owning stocks is not the problem \u2014 in fact, you need their growth to overcome inflation over long periods \u2014 but owning equities means you have to face up to the mental challenge of volatility.<\/p>\n

Watch your fees<\/strong><\/p>\n

Can you get a balanced portfolio that runs on autopilot? Sure, there are plenty of target-date funds out there. However, the fees can be steep, and\u00a0fees are a big reason retirement plans fall short<\/a>.<\/p>\n

An alternative is to build a balanced portfolio of inexpensive exchange-traded funds (ETFs) and rebalance them yourself. If you have the discipline to follow through and a few hours a year to do those trades, you can have\u00a0the power of low-cost investment and disciplined rebalancing<\/a>\u00a0on your side.<\/p>\n","protected":false},"excerpt":{"rendered":"

Ignorance is bliss, as the adage goes. But should you simply ignore your\u00a0retirement\u00a0plan investments? Probably, yes. There’s a lot to be said for being just informed enough about your\u00a0retirement\u00a0plan to … Read more →<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":7557,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_rev_ctl_limit":""},"categories":[3],"tags":[62,42,43,37],"yoast_head":"\nThe Case For Ignoring Your Retirement Plan | MarketRiders<\/title>\n<meta name=\"description\" content=\"Ignorance is bliss, as the adage goes. But should you simply ignore your retirement plan investments? Yes, you should. 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