I was up way too late the other night watching cable TV. I guess that I am too old to figure out how to watch TV on my computer.
I came across a documentary on professional players. One of the poker players interviewed made a great point about poker strategy. I see the same kind of investment management strategy going on with many of the individual Minnesota company 401(k) retirement plan participants that I meet with.
Professional poker players know that if you run out of chips in the poker tournament, you are out of the tournament. A big part of professional poker strategy is to have as part of your game plan a strategy to not run out of chips.
Professional poker players know when to be “all in” and when to protect their pile of chips. I think that individual company 401(k) participants should think about adopting that same investment management strategy.
With the stock market recently close to all-time high price levels, many individual stock market investors are worried about missing out on the free money. For that reason these individual company 401(k) retirement plan participants have remained all in the stock market.
The completely opposite investment management strategy should come into place now. Individual stock market investors should be more worried about how they can protect their stock market gains this year.
There is an old stock market adage that states that it is much better to lose an opportunity than it is to lose money. That mindset should be part of how you are managing your stock market investments now.
You can’t always be “all in” in poker. The same holds true for stock market investing. Once in a while you should plan to protect what you have.
Ric Lager
Lager & Company, Inc.
