Meir Statman : No Matter What Trump Does, Keep Your Hands Off Your 401(K) : Money Magazine
Meir Statman, Glen Klimek Professor of Finance, was quoted in an article by Money Magazine about the smartest way to secure retirement.
An excerpt from the article featuring one of two advantages to saving:
You automatically buy low. Everyone knows that buying low and selling high is the way to make money. But 401(k) investors are the rare breed that actually do it, because money is typically siphoned from every paycheck to fund the retirement account. Your steady contributions keep you buying when markets are scary. And you buy more mutual-fund shares when prices are low, fewer when they are high.
“It’s a real advantage not to have to make a conscious decision to buy when the market is tanking,” says behavioral finance expert Meir Statman at Santa Clara University.
The payoff: Among investors who held 401(k) balances between 2009, when the market hit bottom after the financial crisis, and 2014, the median account balance rose 137%, according to Vanguard.
Find the full article here »
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