Last week, one of my individual 401(k) advice clients asked me,
“I’m bracing for bad earnings news from the stocks in my 401(k) mutual funds.
What happens if they disappoint?”
Most individual investors think earnings season is about stock prices.
For 401(k) investors, it’s actually much more.
Earnings season ranks among the most volatile periods for stocks.
Surprises often show up as sharp swings inside your 401(k) mutual funds.
Your 401(k) mutual funds hold dozens of individual stocks.
Bad news surprises can ripple through your 401(k) account.
One powerful tool—rarely explained—is the 401(k) “stop loss”.
A pre-determined dollar amount or percentage of your 401(k) account value.
To protect your recent stock market gains.
To protect your recent personal and company-matching 401(k) contributions.
Your auto insurance doesn’t prevent accidents, but it limits the damage.
A 401(k) stop loss works the same way.
If the market “accident” happens, your 401(k) losses are limited.
Like your auto insurance deductible.
No one enjoys paying their auto insurance premium.
But everyone appreciates the protection when they need it.
A “stop loss” offers that same sense of 401(k) protection.
Interested in a more confidence way to navigate 401(k) earnings season?
Let’ get a connection to see if a 401(k) “stop loss” fits you.
P.S. A 401(k) “stop loss” might be the simplest protective step you take all year.
