The very last thing that individual investors like to admit is a complete ignorance of their company 401(k) retirement plan account.
Struggling to pick winners from a long list of company 401(k) retirement plan mutual fund options is embarrassing. Most individual investors have come to accept being overwhelmed at managing their company 401(k) retirement plan account.
Company 401(k) retirement plan insecurity makes individual investors nervous, anxious, and shamed. And that is before the next great stock market crash.
No one can control the direction of the stock markets. So why even pay attention to your 401(k)?
Here are the two most important simple steps to improve your company 401(k) retirement plan investment management decisions right now.
First, find out how the mutual funds you own now compare to the other options available on your company 401(k) retirement plan menu. This information is available on your most recent company 401(k) retirement plan statement or online.
There is a very good chance that you have own some poor performing mutual funds. These mutual funds have lagged in investment performance for the last several years. Not to worry; the recent stock market advance has covered up your mutual fund selection mistakes.
But that does not protect the current value of your company 401(k) retirement plan account going forward.
With the stock market near all-time highs, sell the worst mutual funds you own. Protect the last several years of company 401(k) retirement plan investment gains in the money market now.
You have just lowered your stock market risk. You are now much better prepared for the next stock market decline.
Second, strive to improve your mutual fund investment selections going forward. There are many software tools available that rank the short and long-term investment performance of each default menu of company 401(k) retirement plan mutual funds.
A very important company 401(k) investment management strategy is to have a money market balance in your account in order to take advantage of the next SALE in stock market prices.
I am not predicting a stock market decline soon. But a meaningful stock market decline is long overdue. Stock markets around the world are falling recently.
These two steps will make you feel much better about managing your company 401(k) retirement plan account in the future.
Let other people be ashamed of their company 401(k) retirement plan account principal preservation and investment performance in the future. You now have a plan.
Ric Lager
Lager & Company, Inc.
