Your 401(k) investment strategy was born in 1952.
Still think it’s built for today’s stock markets?
Think about your personal and business life.
The tools you use and think about every day.
How many of those things dated back in 1952?
That was the year Harry Markowitz revolutionized investment strategy.
With his Modern Portfolio Theory (MPT).
Awarded the Nobel Prize for his work.
Diversification is the centerpiece of a “buy and hold” 401(k) strategy.
Designed for individual 401(k) investors.
Who don’t have the time or experience to pick 401(k) mutual funds.
The “set-it-and-forget-it” concept is simple:
Buy a basket of mutual fund types and styles.
Keep adding enough 401(k) contributions for the free company=match.
Hang on for dear life and you will be fine.
Diversification requires ownership of all asset classes of mutual funds.
To spread the stock market risk through a 401(k) account.
It’s a crying shame that diversification does not work in today’s stock markets.
Stock markets and sectors move in the same direction now.
That has been the case for decades.
Today’s stock markets are all about algorithms and computerized trading,
And what direction the Federal Reserve will take interest rates.
Index mutual funds are where the 401(k) investment action is.
Fundamentals and stock valuations don’t mean a damn thing.
Really think your 401(k) is diversified?
The shocking truth about your 401(k) mutual funds.
Owning many 401(k) mutual funds no longer guarantee diversification.
Large Cap technology sector stocks.
Your 401(k) mutual funds are overloaded.
And your 401(k) principal risks are at all-time highs.
Same for the S&P 500.
The top ten stocks now account for more than 70 percent of the index’s return.
Everybody owns the same stocks at the same time in their 401(k) mutual funds.
If everyone owns the same stocks, is anyone really diversified?
Overconcentration is a huge potential of double-digit stock markets losses.
Over a short period of time.
Diversification no longer works.
It’s a good think a stock market risk management strategy still does work.
Interested in a real-life approach to 401(k) mutual fund diversification?
