It is crazy to me those individual investors who are surprised by their 401(k) account losses so far this year.
They paid no attention in their “buy-and-hold” world. They delayed any logical and disciplined investment management decision. When their 401(k) account balances reached all-time highs in late 2021.
Now they are surprised? That same investment management strategy has resulted in historic 401(k) account losses. Go figure. Who would have guessed?
Diagnose your 401(k) investment management problem. Then look for the best prescription for the problem. The best 401(k) principal preservation strategy is no simpler than that.
What is your 401(k) investment management strategy? I am guessing it is not to ride the stock markets up-and-down every few years. Or to lose giant amount of 401(k) principal closer to your desired retirement age.
Focus on the individual mutual funds you own in your 401(k). What are the annual costs of those mutual funds? How do they rank in investment performance? How well have those mutual funds held their value during the recent stock market decline?
Have the confidence you can improve your 401(k) investment management decisions. You would be surprised at the level of mutual fund analysis tools available today. Even more surprised how easy they are to apply to your individual 401(k) mutual fund menu.
The last step is the easy part. That is the selection of the best individual 401(k) mutual funds to own. You might have the luxury of a self-directed brokerage account option on your 401(k) menu. That option makes choosing 401(k) investments much less stressful.
Finding specific 401(k) mutual funds to own is not complicated. These mutual funds stand out in both up and down stock market cycles. And in a rising interest rate environment.
Talking heads and financial market “news” will not improve your 401(k) mutual fund choices. Your company 401(k) mutual fund menu is a closed universe. You need to access technology and resources that analyze that specific universe.
And no one wrote a “how to” book about your company 401(k) mutual fund menu.
Your current 401(k) mutual fund choices reflect your past investment management decisions. I am guessing you did not plan to lose some much 401(k0 principal over the last few months.
So, commit to making better 401(k) mutual fund choices. The tools are available. The time commitment is not too great. No matter the level of your stock and bond sophistication.
Ask your current investment advisor for a second opinion on your default 401(k) mutual fund menu. Or some investment ideas for your self-directed brokerage account.
If he or she does not respond, do not worry. Reach out to me on LinkedIn. Then send me a copy of your default 401(k) mutual fund menu.
In ten minutes, you will be able to answer questions about “what to buy” in your 401(K). Better than the last person you asked in Human Resources. Or your co-workers who are guessing just like you are.
Ric Lager
Lager & Company, Inc.
