William Sharpe, Co Founder, Advisor discussed on The Truth About Money with Ric Edelman

Automatic TRANSCRIPT

At the top the study was done by professors at Seton Hall University Saint Louis University Kansas State University in addition to the if this behavioral science center and they discovered that when they gave employees education and they said this list is randomly sorted of choice at the top of the list is not meant to suggest it's the best choice even when employees were given financial education to warn them that the list is randomly sorted it didn't matter people continued to put more money in the top funds in the last then in the rest of the last so here's what you need to do resort the last manually use word cut and paste from the brochure and randomize the list so that you aren't exhibiting an alphabetical bias and how do I want you to re sort the list by expense ratio war by historic volatility such as the sharp ratios Sharpe ratio invented by William Sharpe whose co founder here at Elden financial engines Nobel Prize winning economist who developed volatility measure known as the Sharpe ratio because history tells us that lower cost funds tend to generate higher returns than higher cost funds and that funds with lower volatility tend to outperform funds with higher volatility course past performance is no guarantee of future results we all understand that but if you're gonna sort of list instead of doing it alphabetically and you don't know how to properly select your investments and you're not going to ask a professional financial advisor for help if you work for an employer has hired financial engines we're here to help.

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