When rolling over your 401(k) is the wrong move

Your portfolio has outperformed the market

Can anyone really outperform the market in the long run? It’s a controversial topic with no clear answer.

Famed investors like Warren Buffett and Peter Lynch seem to indicate that beating the market in the long run is a real possibility.

When investors do defy the odds, even the experts can’t say for certain whether it was skill or luck that made them so successful, and there are rigorous studies that give the upper hand to luck. 

Still, if the 401(k) portfolio you hold through your former employer has a long-term track record of beating the market, why would you mess with a good thing?

Short-term outperformance, on the other hand, is more likely to be a fluke, a statistical outlier. It doesn’t give you enough information to base your decision to leave your old 401(k) in place on investment performance alone.

Keep in mind that a well-performing portfolio is most likely to continue its stellar performance if it has rock-bottom fees and is passively managed.