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What to Do with Your 401k

While reading a recent issue of Money, I came across a T. Rowe Price ad that said the following:

Give your old 401(k) the attention it needs.

If you have an old 401(k), it’s not enough to just leave it alone and wait for it to grow. It takes constant management over the years.

Yeah, heaven forbid somebody simply put her money into a handful of diversified, low cost mutual funds and then let it grow. Much better to “constantly manage” it.

I’m curious: What do they mean by “constant management” anyway? And what good do they expect to come from it?

From what I’ve seen, the more a person “manages” his money, the more he moves it around. This is not a good thing, given that most of us end up basing our decisions–at least in part–on past performance. Constant management seems like a path to performance chasing, lower returns, and higher stress. Sounds great.

And I was actually starting to respect T. Rowe. Price! 😉

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