Your Survival Guy has warned you about the $29 trillion opportunity coming to a retirement account near you. As I’ve explained to you before, this so-called “opportunity”—where private equity and credit firms sell their goods to retirement savings 401(k)s and IRAs—the cheerleaders are selling this as good news. It is not good news.
“The $29 Trillion Opportunity” headlines Forbes, and an article in The WSJ wonders if Vanguard will usher in low-fee PE and credit investing to the individual investors, democratizing the category for the masses. Maybe lower fees, but I’m not buying it.
Simply stated, this is an easy exit plan for wealthy investors to sell an overpriced “asset” to the masses. And it’s a way to charge higher fees. Vanguard founder Jack Bogle would be rolling in his grave. Before his death, he openly expressed his concern about the success of his Index 500 fund, where over a third of its direction was dependent on a handful of companies. This was not his idea of diversification.
A.L. Stayed tuned. Private equity and credit are getting the green light to sell to a group of investors that may not have a choice of what they own. Plan sponsors offering target-dated funds are going to stuff the funds with this crap. Are you or someone you know a participant in such a retirement plan? Make sure you spread the word. If you want to talk, email me at: ejsmith@yoursurvivalguy.com.
