Smart401k Blog

  • Commission vs. Fee Based Advisors

    This biggest difference is that an advisor paid solely on commission is receiving a portion of the proceeds from selling you a product. This means they only make money if they make trades/investments on your behalf (unfortunately this means the more trades they make the more revenue they generate for themselves). A fee based advisor on the other hand, is someone who gets paid on a flat hourly rate or other fixed rate schedule. They don't make money off what they sell you but rather by keeping you as a long term client (by keeping you happy).
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  • Lessons from a failed 401(k) plan

    Let's start with a quick recap. The state of West Virginia switched to a 401(k) because like many employers they were facing continually increasing costs from their defined benefit ("db") plan. When they decided to switch to a 401(k) they instituted a generous employer contribution of 7.5% vs. the most common private sector match of 50% on the dollar up to 6% of an individual's salary. The plan offered stock and bond mutual funds, a money market fund, and an annuity. Seems like a pretty good set-up... right? Well, besides the fixed annuity part, but that's a personal opinion.
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  • Drafting your Investment Team

    It’s almost that time of year again – the time where you begin to trade your Sundays on the lake for some time in front of your TV, eagerly hoping that your favorite football team finally has a successful season. Being a Chiefs fan for as long as I can remember, I’m not expecting good things anytime soon. Luckily though, I am also involved in our work-sponsored fantasy football league, ensuring that my Sundays will almost certainly be unproductive for the next few months.
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  • What are sector funds, and how do they affect my retirement account?

    As their name implies, sector funds are mutual funds that invest in a particular sector of the market. For example, Fidelity Select Health Care invests only in health care companies. The idea behind these funds is to allow investors to bet on specific sectors of the market. Sectors funds can give you access to a manager that only focuses on that particular industry or country which can work to an investor's advantage.
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  • International Funds Aren't All the Same

    As part of a well diversified portfolio, we feel most investors should have some exposure to international funds. There are several different types of international funds to select from. From my experience talking to investors, it appears many are unsure of the differences between the different types of international funds. For example, if I asked my family or friends, whom I would consider similar to the average investor, to tell me what the differences between a world stock fund, foreign fund and emerging market funds are, they would be hard pressed to do so. Yes, they are all international funds, but each has an entirely different investment strategy. Today I hope to help you (and hopefully my friends and family) understand the differences between these types of international funds.
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  • Key to Retirement Investing - Reward Yourself Along the Way

    Many of us, myself included, get caught up in saving for retirement. We set goals, work through the numbers and focus on the furture that we are working towards. After saying all that, something struck me on a recent vacation. I met up with some friends for a hiking/camping trip on Kauai (one of my friends grew up on Oahu) and left my laptop, blackberry and all other connections to work behind me (yeah, I'm one of those "always" connected people).
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  • Market Commentary

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  • Account Protection - How You're Covered

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  • Smart401k October 1st Allocations Update

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  • Why I'm Buying into the Market and My 401(k) Challenge

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  • Economic Crisis; The Players and the Initial Factor

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  • What have we learned since Friday? The market needs an identity.

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  • When the Market Gives you Lemons

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  • Advisor Viewpoint; Performance of High-Yield bonds

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  • Economic Crisis – Mortgage Backed Securities

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  • Stick to Your Gameplan

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  • How Past Elections have Affected the Market

    With the election upon us many of you might be wondering how the stock market might react depending on who's elected. So without further ado, here are some interesting statistics on market conditions prior to and after a presidential election. Currently (and unfortunately) we are going into this election with the DOW down approximately 30% YTD (as of 11/03/08).
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  • Tips For How to Reduce Holiday Spending

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  • Will a 401(k) Ghost Visit You This Year?

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  • What are capital gains distributions?

    So, what are capital gains distributions? Mutual funds buy and sell securities, or investments, throughout the year. When a fund sells a security for more than the purchase price, the fund receives a capital gain. If the fund has owned the security for less than a year, the gain is short-term. If the fund has owned the security for over a year, the gain is classified as long-term. The significance of the holding period affects taxation. Short-term gains are taxed at the same rate as ordinary income. Long-term gains are taxed at a special rate of 15% or 5% for those in the lowest income tax bracket.
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