“There are two ways to be fooled. One is to believe what isn’t true; the other is to refuse to believe what is true.”
Soren Kierkegaard
Philosopher, 1813-1855
Consider how much you currently pay attention to the investment management decisions you are required to make in your company 401(k) retirement plan account.
Do you know the annual investment performance numbers on the company 401(k) retirement plan mutual funds you currently own?
Do you know how your mutual funds have performed versus the Standard & Poor’s 500-stock index benchmark recently?
Do you know the annual rate of mutual fund expenses you pay to own these mutual funds?
Does your company 401(k) retirement plan menu provide access to a SDBA (self-directed brokerage account) option?
If your answers to any of these questions is very close to zero, you are not alone. In my 19+ years of providing investment advice to individual company 401(k) retirement plan participants, I have not met one person that could answer more than one of these questions.
Individual company 401(k) retirement plan participants are routinely charged high annual fees and receive sub-par annual investment performance.
We live in an age of widely available investment management technology and professional advice. It is no longer necessary to remain uninformed, isolated, and clueless about the specific answers to each of the questions listed above.
You can turn on your dishwasher via your cell phone from anywhere. You can take a picture of the inside of your refrigerator and send it to your cell phone while you are in the grocery store. And those are only two of the latest technology advances that I can think of now.
You don’t have to continue to buy-and-hold the lagging, underperforming, and expensive mutual funds in your company 401(k) retirement plan account. You are better than that. All that is required is a little bit of extra effort.
There are independent, third-party investment advisors who use investment management technology that can dramatically lower your costs and improve your company 401(k) retirement plan investment management decisions.
A quick review lasting between 15-20 minutes of your time would have helped you avoid the largest part of the December 2018 stock market decline. Your company 401(k) retirement plan balance has recovered quickly so far.
What if you were in a more defensive investment management position prior to December? Better yet, how would your current company 401(k) retirement plan balance have improved since 2019 began if you owned the best mutual funds available?
Ric Lager
Lager & Company, Inc.
