Here’s a common 401(k) investment management mistake I often see:
“Buy the Dip.”
When combined with “Buy-and-Hold.”
Destruction of 401(k) principal is guaranteed at some point in time.
The loss of years of personal 401(k) contributions.
Along with years of company-matching 401(k) contributions.
It costs individual 401(k) investors thousands of dollars.
In lost 401(k) principal and investment returns.
This simple framework can help:
Individuals can preserve their 401(k) principal.
Limit losses during periods of high stock market volatility.
And what about recession fears?
If the economy really does slips into a recession.
Your 401(k) would suffer more catastrophic principal losses.
While “buy and hold” works most of the time in your 401(k).
It fails miserably during a bear market.
Adjust your 401(k) investment management strategy.
To current economic and stock market conditions.
It’s not time to try to grow your 401(k).
It’s time to avoid devastating losses in your 401(k).
It’s not possible to “time the market” over the long term.
Especially difficult to do with limited 401(k) mutual fund options.
But you don’t have to sit back and let the stock market destroy your 401(k).
It’s very possible to make logical, rational, and disciplined decisions.
About the current state of the U.S. stocks markets.
And the near-term direction of the U.S. economy.
Ready to align your 401(k) mutual funds to stock market reality?
Comment below with your 401(k) concerns.
P.S. There are common sense solutions to preserving your 401(k) principal.
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