Could Your 401(k) Play in the NFL?

The NFL playoffs continue last weekend. Between hockey games and dance meets, I was able to watch a little bit of the second round playoff games.

During the game on Saturday night, I was suddenly struck by what I think is a great analogy. At least I think it is a great analogy; you can be the judge of that by the end of this blog post.

There is absolutely no way in the world that the average individual male could play in an NFL playoff game. NFL players are the biggest, fastest, strongest, and intense football players in the world. If the average male adult in the U.S. were to try and compete in the NFL, they would not last very long…even if they had the courage to try.

The average Minnesota company retirement plan participant is trying to compete with the best and brightest investment minds in the world when they invest their money in their company retirement plan accounts.

Institutional investors trade millions of shares of stocks every day, in every stock market exchange in the world. These groups employ the smartest financial minds, the largest computer power, and are the biggest blocks of money that “move the market” each and every trading day.

The largest financial institutions that control the buying and selling of stocks on the U.S. stock exchanges are the NFL players of the financial world. These men and women are plenty smart, work very hard, and have unlimited time and money to research and watch the stock market for a living.

The average male can’t compete with an NFL player. What makes the average individual company retirement plan participant think that they can compete with the same level of stock market professional?

In reality, small stock market investors like those who try to manage their individual company retirement plan accounts can’t compete with the large financial institutions. The better long-term investment management strategy is to be aware if these institutions are buyers or sellers of stocks at any given time.

Ric Lager
Lager & Company, Inc.