If you pulled a Rip Van Winkle and spent the past year in a deep sleep (or, at least, the Catskills), you may missed several major stories that tell you a lot about our industry, both its immediate past and its immediate future.
Here's the rundown of just three of the most-read stories in FiduciaryNews.com in 2012. They're not the top three, but they are representative. (I'll provide you links to the complete lists throughout this article.)
"New Study Reveals Three 401(k) Strategies More Important than Asset Allocation" (August 14, 2012) We found out about this study almost before it was officially released and we pounced on the story. That it fell outside the Top 10 most-read stories was probably due to its mid-summer publication date. Other media outlets choose to run the story after Labor Day, when readership numbers increase. Still, the result of this research led to a surprising conclusion: You can make up for sub-optimal investments in your 401(k) plan merely by working an extra four months. Read about the other "honorable mention" stories in "Most Widely Read FiduciaryNews.com Stories in 2012 – Honorable Mention.
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"A 401(k) Must Read: Mutual Fund Expense Ratio Myth Busted," (October 9, 2012) This article totally rattled the readers – at least a certain segment of them – by exposed the oft-quoted fallacy higher expense ratio mutual funds underperform. While this is true for index funds, the graphs presented in the article suggested the opposite is actually true for actively managed funds. The article provides graphs that show this. This article ranked No. 9 on the Top 10 most-read articles for the year. To see the other articles on the lower half of that list, go to "Most Popular FiduciaryNews.com Stories in 2012 – #10 to #6."
"Will Fiscal Cliff Deal Harm 401(k) Investors?" (November 27, 2012) Hmm, I just happened to notice all the stories I'm featuring occurred in the second half of the year. In fact, only three of the Top 10 stories came from the second half – all the other appeared in the first six months of 2012. To have a story in late November like this one get ranked so high tells you this is big news. At the time of my writing this, Washington is still working hard to finalize some interim package to avoid the fiscal cliff. We don't know what the end result will look like, but don't be surprised if, when it's all said and done, all the talk of extracting confiscatory rents (i.e., taxes) from retirement plans was just that – all talk. This story ranked quite high at No. 4 for the year. To see the rest of the Top 5 most read stories, go to "2012's Top 5 FiduciaryNews.com Stories."
I hope you enjoyed this brief journey back in time. What we learned in 2012 was: 1) Picking the optimal investment portfolio is not only less important than other things when it comes to achieving retirement success, but the criteria we often use is flawed; 2) Everyone – from plan sponsors to plan participants – seeks simple heuristics or an easy-to-understand template when it comes to making retirement plan decisions; and 3) The nine most frightening words in the English language are "I'm from the government and I'm here to help."
May you all enjoy a prosperous and very fiduciary New Year.
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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).
