This Time is Not Different in Your 401(k)


“This time it’s different’ are the four most expensive words in the investing language.”
Sir John Templeton

Every individual investor has an opportunity to learn from past company 401(k) retirement plan investment management mistakes. The ongoing correction in the U.S. stock markets offers another learning opportunity.

U.S. stocks have fallen quickly. The Dow Jones Industrials are already down over 10% from the May 19th highs.

We may be in the early stages of a significant stock market decline like the one from summer 2008 to spring 2009. There is no earthly reason to lose the last several years worth of stock market investment gains in the next few weeks.

Auto-enrollment, diversification, rebalancing, and pie charts will not preserve your company 401(k) retirement plan account. Financial jargon means nothing when fear takes over the U.S. stock markets.

There is only one 100% guaranteed investment management decision to preserve your hard-earned company 401(k) stock market gains.

Sell the worst company 401(k) retirement plan mutual fund that you currently own. Put the sale proceeds into the safety of the money market account option on your company 401(k) retirement plan menu.

When the current stock market volatility is over, you can buy the best company 401(k) retirement plan mutual fund option available to you. That mutual fund is likely to recover your recent stock market losses more quickly than the one you just sold.

401(k) retirement plan mutual fund managers only know how to buy-and-hold. They don’t get paid to manage stock market risk. You are ultimately responsible for the preservation of the stock market gains in your company 401(k).

Ric Lager
Lager & Company, Inc.

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