Background
Link to CNBC article: click here.
It is NOT a coincidence that I have been examining the targeted retirement funds of the largest, most well-known companies. The issues involved here are INHERENT in the nature of these funds.
a. The managers (Vanguard, BlackRock, et al) are the MOST HIGHLY COMPETENT, these are not village idiots throwing darts. Their command of linear algebra, covariances and correlations (which I have attempted to explain to paid subscribers) is unchallenged. That is entirely different than the resulting performance, after the fact (which is the output, and highly influenced by the randomness of financial market outcomes).
b. That said, the ripple effect on consumers isn’t well-understood. In fact, I am pretty certain that many stock jockeys don’t understand the last 4-5 minutes of the video, until revealed (I’m a drama queen, it’s society’s fault). They will understand that distributions occur, but they largely neglect the ripple effects, and these ripple effects can be over $10,000. I have little almost no sympathy for this because in many cases, this could’ve been avoided. An attorney friend of mine, a client, has literally called it malpractice.
It is for this reason that I am speaking at the ACE Academy in Nashville (CFP people get CE credit for my appearance). CPAs, unfortunately, have to report the result to their clients.
Here’s my explanation, and a couple of jibber-jabbers because the book will appear in paperback format soon, and the pre-orders at the libraries is very widespread (Amazon won’t tell us).
Coupon Code = JAE for 10% off.