Far be it for me, a longtime Morningstar employee, to argue against investment education.

At the same time, it must be acknowledged that sometimes a bit of education can be a dangerous thing. Consider my stepmother. She is a fairly active investor and certainly knows quite a bit more about stocks, bonds, and the financial market than does the typical 401(k) investor. In addition, she has a financial advisor. Yet she came out of 2008 worse than did those clueless 401(k) owners. By year-end, she (along with the reluctant permission of her advisor) had succumbed to the notion that the normal rules of investment no longer applied, and she, therefore, shifted a chunk of her portfolio from stocks to Treasuries. The typical 401(k) investor, in contrast, did absolutely nothing. No trades.

You know how those moves played out: Year to date, the intermediate government-bond index is down 4%, while the average stock mutual fund is up about 15%.   More