My desk calendar stated that it was the first day of Spring on March 20th. In Minnesota, Spring means spring cleaning. And spring cleaning means yard sales.
This Spring there is much more cleaning to be done than just closets and garages. There is very likely some clutter that needs attention in your company 401(k) retirement plan account.
You currently own some company 401(k) retirement plan mutual funds that have not kept pace with U.S. stock market benchmark investment returns over the current upward stock market cycle.
If those mutual funds can’t keep up with the stock market averages in a good stock market, when will they ever be able to outperform the other mutual fund options on your company 401(k) retirement plan menu?
The answer is never. All company 401(k) retirement plan menus have a handful of bad mutual funds. The trick is to know which ones they are and to never own them.
If you currently own a “lagging” company 401(k) retirement plan mutual fund, you have a serious investment management problem. You took 100% of the stock market risk and received only a small fraction of the best investment returns available to you.
The time for emotional company 401(k) retirement plan mutual fund attachment has come and gone. The rising U.S. stock market has made your company 401(k) retirement plan account grow nicely in value over the last few years. It is now up to you to preserve those investment gains.
Sell the worst mutual fund options that you currently own in your company 401(k) retirement plan account. Right now, you need to be concerned about preserving those gains.
Don’t make the common company 401(k) retirement plan investment management mistake of owning bad mutual funds for too long. It is a good idea now to build up a money market balance when the stock market begins to stall or go down.
You need to have money in your company 401(k) retirement plan money market account when stocks are “on sale.” Selling lagging mutual funds in a Spring yard sale is a great time to begin that process.
A Spring yard sale will provide you with that opportunity to buy better company 401(k) mutual funds at lower prices. This is an easy way to improve your long-term company 401(k) retirement plan investment returns.
Ric Lager
Lager & Company, Inc.
