Every financial services company commercial, brochure, and web site tells you that it is always a great day to be 100% invested in the stock market.
Buy-and-Hold pie chart based computer-generated models based on the Modern Portfolio Theory of investment management have not delivered consistent long-term investment returns in the past. Future investment returns are not likely to change.
The U.S. stock markets have gone up in value for over seven years. The most important investment management question now is the preservation of those investment gains.
The era of “When to Buy” is now officially over. So is the nagging question of “What to Buy.” We are now in the era of “When to Sell.”
There is a very highly probability that we are in the early stages of a good old-fashioned stock market decline. I am not predicting; and I don’t need to be right in my call on the timing. At some point, stock market history is going to repeat itself.
The investment manager of your company 401(k) retirement plan mutual funds does not manager your stock market risk. Their only interest is that you continue to remain 100% invested in your company 401(k) retirement plan account.
All those graphs, charts, and questions about your risk tolerance go out the window when the stock market fall. The only think that is important now is plan to preserve your company 401(k) retirement plan account principal.
Individual stock market investors always remember stock market losses much longer, and to a greater degree, than they remember stock market gains.
The majority individual company 401(k) retirement plan participants operate under the false sense of investment management hope that their mutual fund managers have an actionable game plan to preserve their last few years of stock market investment gains.
The truth is, your company 401(k) retirement plan mutual fund managers don’t have a plan. They are counting on the fact that you don’t have the time to pay attention.
Ric Lager
Lager & Company, Inc.
