After a review of their March 31, 2020 quarterly retirement plan account statements, more individual investors are considering the investment advice option.
Every week I talk with individual company 401(k) retirement plan participants. However, due to the coronavirus, these conversations have been on the phone and via video conference.
It’s easier than ever to connect with both prospects and clients due to the additional time freed up with the stay-at-home orders. The person who invented the work phone “rollover” to a cell phone should be nominated for a Nobel Peace Prize.
Individual company 401(k) retirement plan participants have more time on their hands now to consider investment management strategy options. The “buy-and-hold” company 401(k) investment management strategy has again proved to be a very expensive lesson.
Now that you have time, ask yourself the following investment management question?
“Have you and your spouse or partner taken the time to review each of your company 401(k) retirement plan accounts for strengths and weaknesses?”
Every company 401(k) retirement plan has good and bad elements. But you have to know what to look for in order to be able to make the best possible investment management decisions for your household.
The most important comparisons are the annual fees and expense ratios for all your company 401(k) mutual fund options. Next, find the investment performance rankings for those same default menu of mutual fund options in each company 401(k) plan.
Ideally, you want to own the combination of the lowest cost mutual funds with the best annual investment performance. There are no more than three or four mutual funds on any company 401(k) retirement plan menu that would qualify.
One company 401(k) retirement plan menu in your household may have a great index mutual fund option. The other plan menu may have a great small or mid cap growth mutual fund option.
I have some individual company 401(k) investment advice clients who unfortunately have none of the above. One or both of their household company 401(k) retirement plan menus are expensive, limited, and under-performing.
The good news is that at least one household member has the SDBA (self-directed brokerage account) option available in their company 401(k) retirement plan account.
The self-directed brokerage account is a full brokerage account within your company 401(k) retirement plan account. In this account, you can buy most any mutual fund or ETF (exchanged traded fund) available.
You are not limited to the high-cost and poor-performing mutual fund options found on the majority of default company 401(k) retirement plan menus. Instead, you can own the better and faster stock and bond market investments available.
If one or more of your household company 401(k) retirement plan participants have the SDBA 401(k) account option, your household investment management problems are solved.
Take some of your extra personal time available now to find out if you have the SDBA self-directed brokerage account option in your company 401(k) account.
Find the answer. And compare your company 401(k) options. You will then be able to make more logical and informed company 401(k) retirement plan investment management decisions for your household.
Ric Lager
Lager & Company, Inc.
