Your current company 401(k) retirement plan account is certainly near all-time highs. There are several key factors involved in these record high levels.
Previous personal annual contributions and company-matching contributions have been added to a rising stock market and falling interest rate environment. Your new company 401(k) retirement deposits could not have been invested at a better time over the last seven-plus years.
The majority of individual stock and bond market investors have been afforded the luxury of not paying attention to their company 401(k) retirement plan account. Why bother? Stocks are up, interest rates down, and there is new money going in every month.
There is nothing in life that easy. Stock and bond market investing certainly are the same. Don’t make the mistake to think that stock and bond market trends will remain favorable forever.
The Federal Reserve may raise interest rates soon. Many stock market experts believe that the next great stock market downturn is likely to take place soon after.
When interest rates rise, and stock prices fall, your company 401(k) retirement plan account balance is sure to suffer. The risk that comes with stock and bond market investing is going to have to be dealt with at some point.
Don’t take confidence in any of the fancy investment advice industry buzzwords. They will never protect your stock and bond market gains. Diversification, rebalancing, and tactical asset allocation will not preserve the principal in your company 401(k) retirement plan account.
Instead, take action now to sell your worst-performing mutual fund holding in your company 401(k) retirement plan account. Place the proceeds into the money market account on your company 401(k) retirement plan menu.
Protection of your company 401(k) retirement plan principal at a stock or bond market inflection point is one of the best investment management decisions that you can ever make.
Have a company 401(k) retirement plan principal preservation plan in place. You can do it on your own, or with the help of an independent third-party investment advisor. The most important thing right now is to just do it.
Ric Lager
Lager & Company, Inc.
