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IMHO this is a fine article from Morningstar. I have capsulized it here for quick reading, but recommend that you all read (and print) that longer version that is linked at the end.
Supercharging your retirement plan is less about picking the right mutual funds and more about knowing what makes a plan work for you over time. There is no one action you can take to fine-tune your portfolio. It's like doing a crossword puzzle. You'll need a variety of answers going in different directions to finish it.
Here are five actions that I think far too many investors ignore when constructing and monitoring their portfolios.
Invest More in a Roth IRA or Roth 401(k).
These vehicles allow you to withdraw money tax-free.
Take Your Employer-Offered Advice, Please.
I can't tell you how many studies I've read that show investors think they know what they're doing when they pick funds for their retirement plans, only to get into trouble later when the market tanks.
Limit Company Stock Holdings.
You think you know your company. After all, you worked there and should know what's going on. But in any number of cases (Enron, Worldcom, Lehman Brothers, et al), employees were the last to find out how badly damaged their employers' balance sheets were--and the most to suffer.
Don't Pay Up for Active Management.
As followers of Vanguard founder John Bogle know, most active managers fail to beat the market over time.
Max Out Your Contribution.
Only about 43% of those contributing to a traditional or rollover IRA put in the maximum amount.
http://news.morningstar.com/articlenet/article.aspx?id=355488&t1=1287249250
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Why would anyone think they understood better than a fund manager where best to put their money? I would leave it in the hands of the professionals.
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One reason could be that a fund manager's job (fiduciary obligation) is to run the mutual fund, not advise folks where to put their investments. No one has more of a stake in your investments that you do.
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No one has more of a stake in your investments that you do.
Never a truer word was spoken.
That was a very good article. Putting all your eggs in one basket is a very bad idea, even if they do pay your wages every month.
Show me your garden and I shall tell you what you are. - Alfred Austin