Low-Cost 401(k) Provider

One of the greatest indicators of investor returns in the stock market is the amount of money that each investor spends on account expenses. And this is mostly intuitive. If you pay 2.1% in annual expenses on your 401(k), then your mutual funds and other investments will have to beat a generic stock market index fund that only charges 0.1% by a full two percentage points. And this is difficult for most mutual funds to do. And yet, this is the selection facing most 401(k) investors as they try to decide which investments would be the best for their portfolio. Generally speaking, Vanguard has a reputation for running the most cost-efficient funds in town, often charging 0.1% for their index funds. This gives the investor a tremendous advantage, as his returns will essentially reflect those of the overall market at-large. So the moral of the story in 401(k) investing is this--look for the lowest cost options that your provider gives you, and if you want to pay up for a more expensive fund, make sure you have a reasonable expectation for believing that the fund will exceed the returns of the overall stock market. To check out a great article on this topic, be sure to check out Allan Roth's article at Money Watch, link here: http://moneywatch.bnet.com/investing/blog/irrational-investor/best-small-company-401k-provider/3693/