Even a casual political observer would know that President Trump frequently posts comments to Twitter over the last few months on several topics. One of his favorite topics recently has been the U.S. stock markets and the strong performance of 401(k) accounts.
Last week, the President’s tweets reminded readers that in order to keep both the stock market and their 401(k)’s going higher, a vote for him on November 3rd was necessary.
Per usual on Twitter, the President received several responses from individuals on how their own 401(k)’s retirement accounts have risen dramatically while he was president.
I talk to individual company 401(k) retirement plan participants every business day of the week. It’s true that some 401(k) investors have seen their balances grow in recent months. But the reality is that the majority of individual company 401(k) accounts have not yet recovered from the March stock market lows.
How well your company 401(k) account has done over the last few months has depended largely on what kinds of mutual funds you own. Let me provide you more specifics.
S&P 500 index mutual funds have done well. Large-cap and mid-cap growth mutual funds have done even better lately. Those mutual funds own the large technology stocks, consumer cyclicals, retailers, and home improvement companies.
If you own value stock mutual funds that own banks, utilities, energy, or real estate stocks, your 401(k) is not likely shown any strong investment performance gains lately.
Trump’s latest tweets are a reminder to “know what you own” in your company 401(k) retirement plan account. Remember, you can’t ever count on the name of the mutual fund to get a clear understanding of the kinds of stocks the mutual fund owns.
You need to dig deeper into the types of stocks your company 401(k) retirement plan mutual funds own now. Only a handful of stock market sectors have worked out well so far in 2020.
If you need an analysis of the stock and market sector exposure in your company 401(k) retirement plan mutual funds, just send me an e-mail at lagerandco@comcast.net.
Ric Lager
Lager & Company, Inc.
