Over the past few decades, the 401(k) has become the most popular retirement investing tool for both employees and businesses.
But for all of their prevalence in the American workplace, there is still a lot of mystery surrounding the management of 401(k) plans.
It is a fact that most employees who participate in 401(k) plans know little about investing themselves. A majority of them simply choose one or more of the funds offered by their plan manager and seldom looks at them again.
Some will glance at their quarterly or annual statements just out of curiosity, but most are content to leave the management to others.
Who is the person managing our financial future?
Most 401(k) retirement plans offer a selection of mutual funds for us to choose from. The folks managing the various investments in these funds are professional fund managers whose names we sometime recognize.
“These funds often trade
millions of dollars in stocks every day.”
Instead, a team of analysts, advisers and other investment professionals are working alongside the fund manager.
Fidelity Investments, the country’s largest 401(k) service provider, manages more than 12 million accounts with a value of around $1 trillion.
Active management of the mutual funds held in retirement accounts is a monumental task.
Fidelity has more than 400 investment professionals dedicated to its larger funds. They are busy analyzing various industries, looking at financial reports and visiting companies, trying to determine the best places to put your retirement dollars.
The next time you look at your 401(k) statement and see the value has increased (hopefully), you can thank an entire team of professional investors.
You can also feel confident knowing the decisions they make on behalf of your retirement account are thoroughly and thoughtfully analyzed.
Photo source: pathlightinvestors.com