With the introduction of the concept of anchoring, Tversky and Kahneman opened the door to a new way of thinking about and addressing the financial decision-making process. For more than four decades, subsequent research has expanded upon their idea. Yet, plan sponsors and participants continue to remain uninformed of the dangers of anchoring.
Tag "Anchoring"
![Will Record Breaking Market be the Anchor that Sinks 401k Savers?](https://fiduciarynews.com/wp-content/uploads/2017/12/record-shop-1-1558935-660x395-505x306_c.jpg)
With a GOT-based strategy, expectations are predicated on needs, not the happenstance of the market. GOT-based portfolios may not have the record-breaking excitement of market indices, but it’s slow-and-steady-wins-the-race philosophy may lead to a more comfortable retirement.
Employees base their decisions – both good and bad – on even the smallest cues, and that only increases 401k plan sponsor fiduciary liability.
Here are three easy practices a 401k plan fiduciary can implement to avoid one of the common investing mistakes identified by researchers in the field of behavioral finance.