In 401(k) investing, diversification is everywhere.
Non-stop financial media message.
Nowhere more promoted than 401(k) retirement account investment management.
Does diversification serve your 401(k) well over the long term?
I speak from my 26 years of individual 401(k) investment advice experience.
If I followed the textbook theory of 401(k) mutual fund diversification.
My 401(k) investment advice offering would have died long ago.
Here’s why I know that fact.
I watch the default mutual fund menu for my 401(k) advice clients.
And for those 401(k) participants lucky enough to have an SDBA option.
My analysis includes a ranking of all their 401(k) mutual funds.
Annual expenses, investment performance versus peers and indices.
Selecting 401(k) mutual funds requires a disciplined process.
Limited to the best mutual funds in a specific 401(k) mutual fund menu.
My investment advice client’s 401(k) principal is too valuable.
To take investment management chances.
On over-diversification into bad mutual funds.
All for the textbook theory’s sake of diversification.
The best 401(k) mutual funds to own stand out on their own merits.
Ranking those mutual funds is logical, organized, and disciplined.
“What to buy” in your 401(k) is a black-and-white.
Supported by sophisticated mutual fund analysis.
Diversification is “guessing.”
Hoping to own a little of the next best mutual fund asset class.
Underperforming now–someday likely to get better.
My 401(k) investment advice clients want to know the mutual funds they own.
And why they own them now.
Versus the other mutual funds available in their 401(k).
I am accountable to my individual 401(k) investment advice clients.
I get paid for my 401(k) mutual fund investment performance and results.
No chance that I take the risk of “diversification” in a client 401(k).
Want to know how the best mutual funds in your 401(k)?
P.S. Diversification is not the answer the “what to buy” 401(k) question.
