A neglected company 401(k) retirement plan account begins to look like your cluttered closet or garage at home. Is your 401(k) a random collection of mutual funds that you can’t remember why you bought in the first place?
That same can be said for the old company 401(k) accounts left at previous employers. These forgotten accounts throw a logical, organized, and disciplined retirement plan investment management strategy out the window.
You can get away holding on to a cluttered collection of mutual funds when stock markets are near all-time highs and interest rates are near all-time lows.
In life, things change. In the investment world, things change very quickly. Holding on to a nonsensical collection of stock and bond market mutual funds is a recipe for giving back several years of investment gains.
Learn from your past company 401(k) retirement plan account investment management mistakes. Your primary investment management objective now should be to not to lose a huge chuck of savings in the next great stock or bond market decline.
Your most recent company 401(k) retirement plan account statement will not get you closer to a safe retirement. Instead, the preservation of that account statement balance will get you closer to a safe retirement.
The next few weeks of stock market direction is anyone’s guess. No one can predict the timing of the next Federal Reserve interest rate increase. The only thing that you can control is how well prepared you are for the next great stock or bond market move.
Know what kind of stock mutual funds you currently own. More importantly, know how your bond mutual funds will react when interest rates rise.
Stocks will fall from their current all-time highs. Interest rates will rise from their current all-time lows. The combination of both of those events can completely change your company 401(k) retirement plan account balance.
Can you live with your current company 401(k) retirement plan account mutual funds when stocks fall and interest rates rise?
The truthful answer to that question will come from a good spring cleaning of your company 401(k) retirement plan mutual funds.
Ric Lager
Lager & Company, Inc.
