The legendary Sir John Templeton famously warned.
The four most expensive words in investing are:
“This time it’s different.”
I hear a version of that thought from individual 401(k) investors.
More often recently than in the last few years.
When the stock markets drop.
The first reaction is usually the same:
“This time it’s different… but it will come back.”
Let’s be clear about an important 401(k) investment management lesson:
You can’t time the stock markets.
But “doing nothing” is still a decision.
And sometimes, it results in an expensive 401(k) lesson.
When the geopolitical, economic, inflationary, and stock market headlines.
All signal a change in risk levels.
Full participation to the stock market downside in your 401(k) is optional.
That’s why you need a principal?preservation strategy in your 401(k).
Every major stock market decline in history has a rebound.
But surviving the drop is even more important.
How much of a drop in your 401(k) value are you prepared to tolerate?
Let’s connect on LinkedIn to share the details for you 401(k) “stop loss.”
P.S. Do you understand your 401(k) risk now in the current stock market drop?
