401k Investing for Newbies and Nerds

There are one hundred and thirty million American workers who collectively own $35 trillion in their 401k and related retirement accounts. The owners of these accounts face both challenges and opportunities. The largest opportunity is that their accounts are investment accounts, not savings accounts, and for the past three decades they have grown in the low double-digit range. The main challenge 401k owners face is that there are required to make their own investment decisions by choosing from a limited menu of mutual funds. These 130 million self-directed retirement account owners can be divided into 3 distinct categories. The first are those who could care less about their money and are willing to just let nature take its course. The second group, NEWBIES , are inexperienced in the investment process, but are willing to become engaged in the management of their hard earned dollars. The third group, NERDS ,</em