The investment advice business is like any other service business. A dry cleaner, a lawn care company, and the person who cuts your hair are all in the service business.
An individual company 401(k) retirement plan participant seeks out an investment advisor to solve an investment management problem that they cannot solve on their own.
Your company 401(k) retirement plan menu of mutual fund options is a confusing mess. Mutual funds have strange names and confusing descriptions. The best combination of company 401(k) retirement plan mutual funds to own is a moving target.
The biggest investment management problem I solve for my individual company 401(k) investment advice clients is to help them fully understand exactly how much risk they are taking with their retirement money.
The first rule of investing for retirement is to keep the money that you already have. You need to take personal responsibility for the preservation of the money in your company 401(k) retirement plan account.
Too many individual company 401(k) retirement plan participants are focused on remaining fully invested in the U.S. stock market at all times. The U.S. stock markets will eventually go down. Sometimes the drop is sudden and dramatic.
Have you ever seen those online questionnaires about how much risk you are willing to take with your retirement plan money? Most individual company 401(k) retirement plan participants don’t have time to answer questions that they don’t understand. The answers to those risk management questions will not help preserve the last several years of stock market gains.
Seek out an experienced investment advisor who has your best investment management in mind. The advisor’s fees should be based on how well your individual company 401(k) performs in up and down stock markets.
Ric Lager
Lager & Company, Inc.
