Times have been tough in the stock markets so far in 2014. Most individual company 401(k) retirement plan participants are too busy to notice how much money has been lost in the last few weeks.
The stock market is falling from all-time high price levels. Now is the time to pay more attention to your company 401(k) retirement plan account.
Start by asking yourself these four questions. Your answers may determine how much of your 2013 stock market gains that you keep. More importantly, your answers may also determine how well your company 401(k) retirement plan performs in 2014.
First, what is your investment time frame? A 25-year-old has a much different time frame for his or her investments than a 65-year-old retiree. Now is the time to make sure that you know the difference.
Second, how much stock market risk are you comfortable taking now? The year of 2013 was one of the best years in stock market history. Make sure that you are comfortable with the thought that 2014 may not go as well. Or even go in the opposite direction.
Third, do you know exactly what you currently own? Be aware of what percentage of stocks and bonds you currently own. You can’t get that information from the name of the mutual fund. You have to read the mutual fund description.
Last, what is your plan if the stock market keeps falling? The wrong answer is another round of a “buy-and-hope”, do nothing game plan. If you don’t remember the last great stock market crash from the summer of 1998 to the spring of 1999, let me remind you now.
Take some time. Answer these questions honestly. Have a plan.
Ric Lager
Lager & Company, Inc.
