Recent stock market headlines got your attention.
You log into your 401(k) for a “quick check.”
So you start comparing your default 401(k) mutual funds.
Suddenly you’re ten tabs deep.
And you still haven’t found the answer.
That’s what over-thinking your 401(k) looks like.
Too many mutual fund options.
Not enough time or information to protect your 401(k).
Even worse, you postpone all your 401(k) mutual fund decisions.
Individual 401(k) investors pour all their limited time and energy.
Into mutual fund selection.
When they should be managing their stock market risk.
That’s backward.
Picking individual 401(k) mutual funds is like shopping.
Stock market risk management is the structure that holds your 401(k).
Your long-term 401(k) outcome will care far more about the second.
You can’t eliminate stock market risk.
But you can decide to limit potential 401(k) stock market losses.
What level of 401(k) principal risk you’re willing to take?
A 401(k) “stop loss.”
A pre-written set of rules for your 401(k) mutual funds.
Pick a dollar amount or percentage of your current 401(k) balance.
If a stock market drop takes your account value down to that level.
That’s your signal to “do something” to protect your 401(k) principal.
No more emotional or “gut” 401(k) decisions.
Going forward, a decision you made when you were thinking clearly.
Put in place a 401(k) principal preservation plan.
A plan that fits your comfortable level of stock market risk.
If your 401(k) drops by ____ percent, how will you react?
Let’s connect to find your comfortable dollar amount or percentage.
P.S. The best 401(k) investment strategy is one you will follow when markets fall.
