It’s here. That time of the U.S. stock market cycle when more and more internet stock market analyst and advisors are writing and talking about selling all your stocks now.
Selling stocks in anticipation of the next great stock market decline never works. You should only sell your stocks when you own one that is no longer a stock market leader.
A good example is your company 401(k) retirement plan account. Most individual company 401(k) retirement plan participants own between four and eight default menu mutual fund options.
I have been analyzing company 401(k) retirement plan menus for over 15 years. I have not once seen a default mutual fund 401(k) menu with more than three or four really good mutual fund options.
Right now, you likely own some company 401(k) retirement plan menu mutual funds that have dropped in price much more than the popular U.S. stock market benchmarks. These poor performing mutual fund options are also likely to be the leaders on the downside when the U.S. stock markets weaken.
You are not a bad investor. The U.S. stock markets can’t go up forever. The best company 401(k) retirement plan account investment management strategy now is to sell the worst mutual funds that you currently own in your company 401(k) retirement plan account.
Keep the sale proceeds in the safety of the money market. When the stock market storm passes, reinvest in the best performing mutual funds available on your company 401(k) retirement plan menu. You may have to buy more shares of one of the mutual funds that you currently own.
It is a long time until you retire. Selling the worst mutual funds you own when the U.S. stock markets take a breather is a large part of preserving and growing your company 401(k) retirement plan account.
Ric Lager
Lager & Company, Inc.
