NFL training camps opened up last week. NCAA and high school football seasons begin later this month. Football season will be here soon.
The football analogy that I use with my individual company 401(k) retirement plan advice clients could not be more timely now. Even a casual football fan understands the important of knowing what team needs to be on the field.
The U.S. stock market indices are near all-time highs. The same goes for the most recent quarterly statements from your company 401(k) retirement plan account. The set-it-and-forget it investment management strategy has had a good long run.
At some point, the U.S. stock markets will fumble and “turn over” the football. The last several years of stock market momentum will stop. It is these changes of possession when individual investors run into confusion.
You have the ability to play strong defense within your company 401(k) retirement plan account. Full participation in the next great stock market decline is completely optional.
Instead of sitting back and taking another round of historic stock market losses, you can fight back. Your company 401(k) retirement plan principal preservation investment management strategy should begin now.
The buy-and-hold investment management strategy is a promoted marketing plan by the mutual fund companies that manage your company 401(k) retirement plan mutual funds. When you buy, the mutual fund companies hold, and the combination continues to preserve the maximum amount of annual investment management fees you pay for stock market losses.
Your company 401(k) retirement plan mutual funds don’t care much about annual investment performance. They care the most about hanging on to your money at all times.
Your favorite football team can’t ignore the loss of the football. The team changes players when they don’t have the football. If that team kept the offense on the field when the other team had the ball, they would be scored on at will.
The same analogy goes for remaining 100% invested in your company 401(k) retirement plan mutual funds when the U.S. stock markets take possession of the stock market football. You can’t completely ignore the early stages of the next great stock market correction.
Don’t run the risk of losing the last several years of your company-matching 401(k) contributions, your contributions, and historic stock market gains.
You don’t have to run out and sell everything today. Instead, think about putting a principal preservation investment management game plan in place the next time the stock market tries to take your company 401(k) retirement plan money away.
Your favorite football team knows that playing defense is part of the game. The same common sense applies to managing your company 401(k) retirement plan account.
Ric Lager
Lager & Company, Inc.
