In the last few days, the timing has improved for you to take the necessary investment management steps to recover your recent company 401(k) retirement plan account losses.
These steps are not hard to understand. All you need to do is to apply at little logic and common sense. The current mutual funds you own in your 401(k) fall into two main groups now.
First, you own mutual funds that you should have never bought in the first place. Sure, they went up in value when the overall stock market went up. But their investment performance has always lagged other mutual funds on your company 401(k) retirement plan menu you could have owned instead.
Worse, these lagging mutual funds have most likely declined at a much more rapid rate that the overall stock markets over the last few weeks.
Sell those bad mutual funds now and put the proceeds into the safety of the money market account option in your company 401(k) account. You need to have a money market balance available now I order to buy better mutual funds during the current stock market “sale.”
The second group of mutual funds you own are decent mutual funds. They outperformed the popular stock market averages on the way up. And they have held their value better than those same stock market averages over the last few weeks.
These mutual funds you can continue to own now. You can buy more of this second group of mutual funds as soon as the current stock market decline runs its course.
In order to improve the quality of the mutual funds you own in your company 401(k) account; you have to build up a money market account position first. That is the best way to rescue your company 401(k) retirement plan account in the future.
Ric Lager
Lager & Company, Inc.
