Tag Archives: self-directed investing

Review of Pound Foolish by Helaine Olen

I have been hearing a lot about Pound Foolish: Exposing the Dark Side of the Personal Finance Industry, by Helaine Olen.  Without having read the book, it sounded like a muckraking survey of the ways that the financial services industry fleeces individuals. Commentators in the financial services industry have been broadly critical of the book.  Larry Swedroe, a well-known advisor and journalist concludes that “problems are well exposed, but investors are left in the dark about how to deal with those issues. This book has many positive aspects, but in the end, it comes up short of helpful.”  Morningstar’s John Rekenthaler comes to a similar conclusion in his review, suggesting that the book is entertaining and worth reading, but is somewhat biased in terms of telling Olen’s audience what they want to hear.  The reviews and controversy inspired me to read the book myself, and it is a fairly quick and enjoyable read for those interested in the issue.  Continue reading

Getting Help in Choosing and Managing a Portfolio

There is currently $5 Trillion invested in Individual Retirement Accounts (IRAs), $4.7 Trillion invested in self-directed retirement plans provided by employers (401(k), 457, and 403(b) plans), and $2.3 Trillion invested in traditional pension plans offered by private companies.  These numbers are stunning for a number of reasons.  First, self-directed retirement plans (IRAs, 401(k)’s, etc.) dramatically dwarf the amounts invested in traditional pensions.  This is part of a long-term trend, as employers move away from traditional pensions, but the magnitude of the shift is striking.  With the assets in IRA’s surpassing the $5 Trillion mark earlier this year, the amount of money in individual accounts is moving ahead of employer-sponsored plans.  What’s more, it is anticipated that IRA’s will continue to grow relative to employer-sponsored plans as people retire and roll their savings from their ex-employer’s plan into an IRA.  This matters because investors in IRA’s have even less help in creating and maintaining their portfolios than investors in employer-sponsored plans.  Continue reading