There seems to be an emerging trend in personal financial media. That is to blame the underperformance of company 401(k) retirement plan accounts on company 401(k) retirement plan sponsors and providers.
In recent weeks, I have sat down with more than one Minnesota company 401(k) retirement plan participant who has voiced their frustration.
“It’s the company’s fault. It’s the mutual fund’s fault.”
It is the easy way out to blame your company 401(k) retirement plan sponsor, company 401(k) retirement plan provider, or the mutual fund menu for the lack of investment returns over the last few years.
Those excuses make no sense. Individual investors have a very poor and selective memory.
When real estate prices got in trouble a few years ago, the subsequent collapse in real estate prices was blamed on the mortgage brokers. The banks were blamed for making the mortgage loans in the first place. The real estate agents were blamed for advising their clients to buy homes at all-time high prices.
Maybe I am a little bit old-fashioned, but whatever happened to taking personal responsibility for your investment management decisions?
The investment management responsibility for your individual company 401(k) retirement plan account is your own. In the end you should take the responsibility for them.
If you feel that you don’t have the time, knowledge or expertise to make the necessary investment management decisions in your company 401(k) retirement plan account, then hire an independent investment professional to do it for you.
Blaming a third party when investments go bad is easy. Real estate investor already tried that; and it did not work out well for them.
The next big stock market correction will surely erase the last several years of stock market investment gains. The preservation of those gains is solely your responsibility.
It makes no sense to blame your company or your mutual funds. It did not work for real estate either.
Ric Lager
Lager & Company, Inc.
