Well, after almost 6 months, my old 401k came out of the "blackout" period and was finally deposited into my new one. I don't think the whole process is supposed to take 6 months, and probably it would still be going if enough people hadn't complained. So this week, I logged on to see what funds I should move this money into, and I was surprised at what I found.
The first thing - we still don't have access to "thousands" of funds, just the same old, tired 20 dogs we had before. Ok, well maybe there are SOME decent funds in here, so I go and take a look at the fund histories in an attempt to pick them out. The first thing I notice is a fund called "cash reserves" which from what I understand, is nothing more than a money market fund. Interestingly, the 10-year return on this fund is 2.04%. Not bad, but certainly not great. However, since its just money market investments, you can't really expect much. What shocked me was the sheer number of funds that had a 10 year history, yet came in markedly worse than 2.04%, with several coming in negative.
Which leads me to a rule I'd like to propose - any fund that has a 10 year history and can't beat a cash reserve account has no business in a 401k plan, and should be removed. In all honesty, the fund shouldn't even exist, but if people want to go out of their way to own these dogs, then that's their problem. Remember, you're PAYING a fund manager who in the last 10 years, can't even beat a basket of money market accounts. Why are these things in here? Does anyone out there agree with me?
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