At first glance it seems completely reasonable.
You want to own the 401(k) mutual funds.
With the best investment performance.
If one fund has produced stronger investment returns.
The higher-performing option feels like a rational decision.
The problem is that investment performance is historical.
It does not show the level of stock market risk now.
Investment performance tells us what happened.
A measurement of stock market risk tells you what may happen.
The differences in these two concepts iare critical.
When stock markets begin to decline.
Have a 401k) principal protection plan in place.
A logical response to falling stock markets.
Investment returns tell you where a 401(k) mutual fund has been.
A stock market risk analysis can explain how it got there.
And how likely those investment gains will hold up in the future.
It’s not the 401(k) stock market investment gains you have earned.
It’s the one you can keep.
Interested in a review of your current 401(k) mutual fund stock market risk?
Let’s connect on and I can share your details.
P.S. Investment returns are easy. Preserving 401(k) principal takes a deeper skill.
