This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The New Retirement Rulebook

Kelli B. Send, senior vice president for Francis Investment Counsel -- which offers investment advisory services to plan sponsors as well as education and individualized advice services to plan participants -- says many 401(k) plans do not "offer the kind of portfolio or the kind of investment options that they really should today. " When they do, international exposure is usually too Eurocentric.

"What we typically see is an average in the industry of 10-12 funds and maybe one international," she says. "Well, we know what has happened to the traditional international option. It has gotten hammered in 2011 because it is so focused on Europe."

Send says that 401(k) menus, as they have been pared down for simplicity's sake, need to be rethought and include alternatives, hard assets, commodities, emerging-market equities and emerging-market fixed income.

"You not only have to add them to the plans, you have to educate the employees on how to use them," she says. "The standard asset allocation models out there today still do not include those types of choices."

The average 401(k) investor's exposure to international funds is just 8% of assets, according to a study conducted by Vanguard. According to the Callan DC Index, retirement plans had less than 0.5% of plan assets invested in emerging-market equity funds.

In making sense, and returns, from the current investing environment, participants need options and the wherewithal to use them.

"So much in behavioral finance is about the inertia out there," Send says. "Once people check mixes they tend to stick to them. There is a fine line between long-term investing and neglect. What happens is people pick a mix when they are 30. Now they are 52 and they are finally going, 'Oh I'd better make some changes.' It's crazy that with the demise of pensions people just do not know what to do and the industry really hasn't figured out a way to really help people drive change. Even when you offer the brochures and the newsletters [full of advice], people don't change their mix."

"The problem is twofold," she adds. "The employer really has to offer new-world thinking with their portfolio choices, but then the participant has to be given help to get them implemented."
4 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs