Reluctant Investing
My last blog talked about reasons that may convince those who do not invest in the stock market to consider it. Today’s blog post is about stock market investments already made by those that say they do not like the market.
Participants in 401k or 403b plans are “forced” to make decisions between investing in the stock market or bond funds. Many of these reluctant investors choose the stock market. 
Usually, these investors do not know anything about the market and they make their choices based on suggestions from co-workers or friends in a rushed, uninformed and “get-it-over-with” manner. The consideration they put into their plan choices are insignificant to its importance as a future anchor of financial security.
From my experience I believe these reluctant investors understand risks from bond funds even less than the stock market. If those in bond funds realize that the last few years of big run-ups created built-in time bombs (should market interest rates rise), I feel they will exit them in favor of stock funds… which is their only other choice.
Stock and bond funds are broad categories with each having many sub-categories where decisions also need to be made. Every choice needs investor understanding and proactivity, not reluctant decisions.
Default investment decisions don’t belong with something as important as 401k and 403b accounts. It is the participant’s responsibility to learn about plan alternatives, to seek out employer paid assistance, possibly their own advisors and have the choices and consequences of the decisions clearly explained. Don’t be a reluctant investor!
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