Last weekend, I was invited to a client’s house for a family get-together. The oldest daughter of my client was there. Along with her husband and 5-year old daughter. In the daughter’s travel bag, I noticed a well-worn copy of Aesop’s Fables.
The book reminded me of the current historic stock and bond market risk levels in my client’s individual company 401(k) retirement plan accounts.
Earlier this month in a Nasdaq interview, none other than Yale Professor Robert Shiller warned about U.S. stocks being as overvalued now as they were prior to the stock market decline in 2000.
Here is the article titled, “A Nobel Prize Winner’s Dire Market Warning—And What To Do About It.”
Your company 401(k) retirement plan account is near all-time record highs. For most individual investors, their current retirement plan account balance represents “The Goose That Laid the Golden Eggs” regarding their retirement assets.
Your current company 401(k) retirement plan nest egg represents your career-long savings and company-matching funds. In addition, that dollar amount includes all the historic stock and bond market investment gains since March 2009.
Every major asset you own is insured. You own life insurance, home insurance, and car insurance. Have you ever thought about company 401(k) retirement plan insurance?
You can’t pay an annual premium and insure the recovery of future stock and bond market losses in your 401(k). But you can put in place a stock and bond market risk management game plan before the next stock market crash or dramatic rise in interest rates.
Right now, take the time to figure out what percentage or dollar amount of company 401(k) retirement plan principal loss that you are willing to accept going forward. The next step is to commit to “doing something” if your company 401(k) retirement plan account balance drops below that dollar value.
These statements don’t make me a market timer. And I am not predicting a stock market crash or interest rate rise. I am talking about the preservation of your company 401(k) retirement plan money.
No other entity involved with your retirement money—company 401(k) retirement plan sponsor, provider, or mutual fund manager—will ever be as concerned about your money as you can be. Now is the time to put a dollar amount or percentage loss on your concern.
Ric Lager
Lager & Company, Inc.
