January 28, 2010
Back when I started contributing to a 401(k), first class postage cost 20 cents. It was the year Apple introduced the Macintosh. Ronald Reagan was re-elected, and the LA Raiders won Super Bowl XVIII. Hair was big back then. The internet did not exist, and you could check the value of your account 4 times a year when your statement arrived. If you wondered how you were doing between statements, some, not many, plans offered telephone access to your accounts.
In those bygone days we didn't make many changes. But by the turn of the 21st century web access became common. Also common is that many people check their accounts frequently - some folks multiple times daily. I know that because I get reports from the plan recordkeepers with whom we do business and one of the metrics is frequency of web access. Some people seem to believe that by checking regularly they can monitor, adjust, and improve their performance. I have one suggestion about that:
Don't look at your account so often, don't make frequent changes to your fund mix, don't drive yourself crazy. Looking at your account every day is like driving while looking out your side window. Don't constantly lift the lid to check the soup. Select your ingredients carefully and let them simmer. If you have a crystal ball then check your accounts all the time. If not - stay away.
Tonight is the Brighton Securities Open House. Tomorrow: Ground Rule #4: Cash is Trash
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).