VOICES FROM THE INDUSTRY: Investors would be wise to avoid these four traps

Advice on investing is a lot like advice on caring for a newborn-there’s no shortage of it around and everyone believes they have just the right answer. Eventually, parents learn that they must sort through all the help offered by TV shows, books, magazines, Web sites, and even friends and relatives, to find the tips that work best for their baby. The same thing can be said for investors. Being successful requires tuning out all the noise and knowing what…

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VOICES FROM THE INDUSTRY: Investors often end up being their own worst enemies

In recent years, an increasing number of researchers, particularly in the field of psychology, have come to believe that investors undermine their investment and financial goals through such emotionally biased-even irrational-behaviors as overconfidence, a herd mentality, bias toward recent market results, and an excessive aversion to risk. Eliminating such biases is difficult, but investors can mitigate their impact by following several time-tested investing and financial planning principles. Think long term Invest for the long term. Investing in riskier assets, such…

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VOICES FROM THE INDUSTRY: Does your 401(k) work as well as most pension plans?

This is definitely not the headline most workers wanted to see on the business section of the newspaper: “Traditional e m p l oy e r- f u n d e d pension plans outperformed worker-funded 401(k) plans during bear market.” The findings, based on a study conducted by the employee-ben efit consulting firm of Watson Wyatt Worldwide, bolstered critics’ arguments that 401(k) and similar retirement plans are not up to the task, when compared with defined-benefit pension plans, of…

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