Today's investment education should be less Modern Portfolio Theory and more behavioral economics. (Photo: Shutterstock)
Which question do you think the typical retirement plan participant could answer the quickest: “What is the long-term impact of your asset allocation on the growth of your retirement plan?” or “What is the immediate impact to your weekly spending if you contribute $10 more a paycheck into your 401(k)?”
Therein lies the reason we no longer see hours of employee education dedicated to style boxes, growth versus value definitions, and other remnants of Modern Portfolio Theory. The truth of the matter is people just don't need to know that stuff.
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