Sitting on my desk is a mailing from the people who run my employer's 401k, touting an exciting new investment tool that will automatically maximize my investment and tweak it from "adventurous" to "cautious" as my retirement age approaches. At least that's what I think it says; I can barely make head nor tail of it, couched as it is in nice-sounding, empty phrases and high-financesque terminology that probably looks impressive to someone who doesn't read the dictionary for fun. It's low on numbers, contains no math, no graphs, and very little in the way of objectively factual content. Since my 401k is set to be as low-risk as possible -- I know too many people who took a deep plunge when the market was roaring and saw their savings swept away in one slump or another -- I don't know why they bothered to send it to me.
The whole notion of a 401k as usually implemented comes from people who are happy to play the investment market -- especially with someone else's money -- and cannot understand why anyone else wouldn't share their fascination. That I might be hoping to get back out what I put in, without inflation and taxes taking too big a bite, is beyond their comprehension.
I'm convinced that J. Random Guy playing the financial markets -- even mediated by fancy retirement accounts -- is not a good thing. That's a game for those who can afford to lose; most of us shouldn't be sitting at the high-stakes table, staring in fascination as the wheel spins and the dealer turns up a card with a few year's income hanging in the balance. If you wouldn't risk it in Las Vegas, don't risk it on Wall Street -- and don't kid yourself that one is any less random than the other.
5 weeks ago