Rick Bales over at Workplace Prof Blog points us to a joint Vanguard/Wharton study of over a million 401(k) participants that indicates what works and what doesn’t in maximizing long-term investment returns. Not surprising:

  • High-turnover trading hurts long-term returns.
  • Periodic re-balancing helps long-term returns.
  • Holding balanced or lifecycle funds is the best "trading" strategy of all.

But here is another question to ask. Does the adequacy or lack thereof of the actual funds themselves matter? Here is a link to my last summer’s post that points to a study which in non-academic terms says: yes, and a lot.

But the real question is, the answer to which we will have to wait: will the new investment advice provision effective this year make a difference?