Van Doorn’s advice is solid for the average novice investor—especially one shy about starting out. First and foremost, young investors should know not to leave matching money on the table—even if it means delaying that new car purchase or eating at home for the time-being. But if the reason for Van Doorn’s (and Buffett’s) recommendation of index funds concerns their simplicity and low-cost, we think even new investors can do better.

While it’s true that over the long term a balance of index funds may well reflect the market’s historic rise, our more active approach never asks investors (young or old) to wait out long bear markets in hope of averaging out over time. It makes simple common sense to move out of stocks when the market is clearly on a descent, and conversely loading up on stocks when, as has happened over the past year, the market is on an obvious tear. The compounded gains of even small moves of this type do more than save on fees—especially since the cost of moving your money within the funds offered by your 401(k) plan is zilch. The low cost of Compass Investors’ HORIZON newsletter (only $300 a year for new investors) and the now historically tested algorithm behind it makes the basic moves easy—and lucrative in the long run.

If an active 401(k) investing approach such as HORIZON™ is not yet available at your company, please contact us to learn how to incorporate such an alternative into your overall retirement saving strategy.