As a part of our support for academic research concerning participant investment behavior (including our support of research by Professor Shlomo Benartzi of UCLA), we regularly post important academic and industry studies on our website.

We have recently posted a study entitled “Winners and Losers: 401(k) Trading and Portfolio Performances” by Takeshi Yamaguchi and Olivia S. Mitchell of the Wharton School and Gary R. Mottola and Stephen P. Utkus of Vanguard Center for Retirement Research.

The paper examines the impact of trading on investment performance in defined contribution (DC) plans. It evaluates in detail the impact of workers’ trading decisions on the performance of their DC portfolios using unique new data set of about one million active 401(k) participants in some 1,500 DC plans. The research concludes several findings that should interest fiduciaries responsible for designing DC pensions and regulators of the retirement saving environment.


Disclaimer Required by IRS Rules of Practice:
Any discussion of tax matters contained herein is not intended or written to be used, and cannot be used, for the purpose of avoiding any penalties that may be imposed under Federal tax laws.


Source: Adviser Report