Market Timing

Don’t Just Do Something, Sit There!

In many areas of life, intense activity and constant monitoring of results represent the path to success. However in investments and retirement planning, that approach gets turned on its head.  Academic research shows that the busier we are with our 401(k) investment mix and the more we tinker, the less likely we are to get good results.

That doesn’t mean that we should do nothing whatsoever. But it does mean that the world’s culture of busyness and chasing returns promoted by much of the financial services industry and media can work against our interests. The consequences are that most investors earn poor long-term returns and don’t accumulate enough for retirement.

We can’t control movements in the market. We can’t control news. We have no say over the headlines that threaten to distract us.  But each of us CAN control how much we contribute to our 401(k), whether we make Traditional (pre-tax) or Roth (post-tax) contributions, and how much risk we take in our investments.

The 401(k) plan sponsor can positively impact his or her employees’ retirement planning experience by helping them learn about and control the variables that matter.

For example, offering professionally-managed portfolios in your 401(k) plan can help immensely.  This is borne out annually in an analysis of investor behavior by research group Dalbar. In the 20 years, leading up to 2012, Dalbar found the average U.S. mutual fund investor underperformed the S&P 500 by nearly 4 percentage points a year.1  This documented difference between market returns and what investors receive is often due to individual behavior:  being insufficiently diversified, chasing returns, making bad timing decisions, and by investing in high-cost, actively managed funds in an ill-advised attempt to beat the market.

To combat this, it is estimated that 55% of all 401(k) participants will be entirely invested in a professionally-managed investment option by 2017.2  Triune believes there is real value in having competent, credentialed, and caring financial planners that will come alongside your team to help them make informed decisions.

For more information, please contact me:, 913-825-6100.

  1. Quantitative Analysis of Investor Behavior, Dalbar, 2013.
  2. How America Saves 2013, The Vanguard Group, Inc., 2013.