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A 401(k) Fiduciary Dilemma: The Risk of Using Volatility to Define Risk
Fiduciary News Link to more items from this source
May 28, 2014
"[T]he leading thinkers in the financial industry have long used the elegance of statistics -- specifically, standard deviation as a measure of volatility -- to frame the definition of risk. It worked so cleanly on the blackboards of academia that it just had to be used in the boardrooms of America. There was only one problem. The theory was wrong.... And that's a problem for 401k plan sponsors who rely on the investment industry to design menu options and advise participants. More importantly, if the old paradigm is dead, what new paradigm has replaced it?"

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