Abstract:
The most common investment decision is the choice of a portfolio for a retirement account such as a 401k plan.  Few workers have most of their defined contribution retirement accounts invested in stock funds. Simulations based on real rates of return from Ibbotson Associates (1996) show that for 20 or more years of periodic investing, stock funds matching the Ibbotson small stock category would on the average provide much higher accumulations than other financial assets, but would also be safer than any other possible combination of Ibbotson financial assets.

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