…history tells you that you can’t successfully time the stock market. You should buy-and-hold and remain 100% fully invested at all times. Diversify, rebalance, and dollar-cost average. I know that is true because that is exactly what the mutual fund company told me to tell you.
The second investment advisor says that is crazy. How many times in your working investment lifetime can you afford to ride your company 401(k) retirement plan account up-and-down like an elevator?
U.S. economic and stock market cycles are normal. Common sense tells you to adjust the risk level in your company 401(k) retirement plan account in order to reflect these cycles. When the risk level is high for an economic slowdown and a stock market decline, sell some of your worst-performing mutual funds and preserve your company 401(k) retirement plan principal.
Eventually the economic forecasts will improve and companies will make more money again. The stock market volatility will also go away. At that time, you can use your company 401(k) retirement plan money market balance to buy the best stock market mutual funds on your company 401(k) retirement plan menu at lower prices.
This is no joke. Which company 401(k) retirement plan account investment strategy make more sense right now?
Ric Lager
Lager & Company, Inc.
