“I am more concerned about the return OF my money than the return ON my money.”
Mark Twain is credited with the quote above. Every few years, individual company 401(k) retirement plan participants need to pay very close attention to this all-time great investment advice.
Since early March of 2009, the U.S. stock markets have gone up. Over the same time period, U.S. interest rates have gone down. The last six years have truly been one of the best buy-and-hold company 401(k) retirement plan investment management environments ever.
Most individual company 401(k) retirement plan participants have developed the bad habit of not paying attention to their retirement plan accounts.
The last few weeks have created some interesting volatility. Oil prices, the Swiss National Bank, commodities, corporate earnings, copper, retail sales, etc. Taken all together, this string of bad surprises and negative news may turn into a stock market event.
My forecasts for an eminent stock market crash are worthless. I think you can get some value from my advice on putting together an investment management game plan for the money in your company 401(k) retirement plan account.
The last great stock market decline was from July 2008 to March 2009. Several years of stock market gains were wiped out in a few short months.
I fear a level of inattention again now when I talk with company 401(k) retirement plan participants over the last few months. There has been no stock or bond market event recently to remind investors that a buy-and-hold investment management strategy can quickly turn into a buy-and-hope investment strategy.
If you go to the casino to play blackjack, you might win right away. But the long you play, the faster you will lose the money that you won. And you might lose the money that you started with.
Successful long-term stock market investing requires that you have an investment management game plan when the stock market declines. You need to be able to preserve your stock market gains. Hanging on to every possible dollar of potential stock market gain is a dangerous plan.
Right now you need to have an honest conversation with yourself. Begin by reviewing Mark Twain’s famous quote above.
Ric Lager
Lager & Company, Inc.
