Retirement Planner: A wake-up call on 401(k) fees

As if it wasn't enough to have politicians like Elizabeth Warren fighting for the "little guy" with new consumer protection legislation, the U.S. Supreme Court has just handed 401(k) participants the heavy artillery they have long deserved for improving investment performance.  
Trying to factor in all these moving parts can give us headaches. The thought we want to hold as amateur investors is that we can insulate ourselves from these shifting sands with a combination of the right investments and the right mindset.  
 
The bottom line for bond fund investors is to focus on the amount of money deposited each month into a checking account from the fund, while ignoring any fluctuations in capital value. Those periodic downdrafts are only losses on paper unless you're an investor who freaks out and bails out at that inopportune moment.  
 
Just when we think we have driven a stake through the heart of efforts to repeal the "Death Tax," the House of Representatives, with too much time on its hands, has managed yet another attempt to appease a group of the nation's wealthiest families.  
 
I wasn't surprised to read a New York Times editorial citing Thomas Hoenig's assertion that the level of capital at the nation's eight largest banks was not the 12.9 percent of assets claimed by the Federal Reserve, but rather, it was a paltry 4.97 percent.  
 
Now is probably a good time to explain stock buyback plans since they have recently outpaced dividends as the greater "rewards program" for stock investors. Last year's total payouts in dividends and buybacks was more than $1 trillion -- the highest amount in history.  
 
The health care sector of the mutual fund industry has been on fire for the past five years and anyone buying one of the several health care funds as of the end of 2009 would have tripled their money by the end of last year. The 10-year average annual return has been about 15 percent. So now what?  
 
What struck me was the fact that today's 16 million who benefit from the Affordable Care Act program may be an entirely different group from the 16 million covered five to 10 years from now.  
 
Last week's Wall Street Journal reported that U.S. banks were now scrambling to shift their bond holdings into a category labeled as being "held to maturity." Meanwhile, there's an object lesson here for "little people" like you and me that recalls Cuba Gooding's chant in the movie "Jerry Maguire" -- "Show me the money!"  
 
Putting your faith in financial adviser.  
 
 
 
 
 
 
( Jeffrey R. Staab )
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