Due to the unique circumstances surrounding COVID-19, we feel the need to override the April 2020 recommendations for two of our investment models: the TSP Allocation Model and our 401(k) Allocation Model.
Model Investing Articles
Amid the ongoing COVID-19 epidemic, and the tremendous volatility in the financial markets, we wanted to provide you with a market update and some suggestions on how to manage your portfolio through this crisis.
These days, the rage is all about passive investing. That’s because over the last few decades, it’s become crystal clear that active management (aka. stock picking) doesn’t work. Even the most astute stock pickers, with millions of dollars’ worth of research at their fingertips, consistently underperform basic index funds.
Tune in to the stock market on any given day, and you’ll likely find the major averages zooming in one direction or the other. Sometimes the moves are choppy, rising and falling while generally heading nowhere, while other times the market can seemingly run for weeks or months in one direction.
If you’re one of the roughly 75% of investors who are using a target-date fund in your retirement plan, you need to read this. We’ve written about why you should say no to target-date funds before, but new research provides the clearest evidence yet for why these funds must be avoided.