Diversification is good general investment advice.
But applied blindly to your 401(k) it becomes a problem.
Inside most default 401(k) mutual fund menus.
Owning more mutual funds doesn’t reduce stock market risk.
It often spreads your 401(k) money.
Across the same stock market sectors.
In the same individual stocks.
You’re diversified on paper.
But you are not diversified at all with your 401(k) money.
Think about 401(k) mutual fund diversification this way.
A focused hand full of 401(k) mutual funds.
Chosen by their head-to-head ranking.
The best mutual funds available in your 401(k).
Diversity your 401(k) mutual funds selectively.
Within the highest ranked mutual funds available.
You don’t need to own a variety of 401(k) mutual funds.
You need to only own the best ones available to you.
Want to revisit how your 401(k) mutual funds work together?
Let’s connect and I can share your specific details.
P.S. 401(k) diversification only works best with the best mutual funds.
