I am tired of useless information provided to individual 401(k) participants.
There is only so much attention span available. To anyone at any time.
How can a 401(k) investor decide what information is helpful? To improve his or her mutual fund investment management decisions?
Here is my best idea. Don’t pay much attention to generalized, commoditized investment advice. Instead, pay close attention to content specific to your default 401(k) menu of mutual funds.
Quarterly earnings, election polls, market information, and politics. Provided nonstop on all your electronic devices. Intended to capture your short attention spans. Not relevant to the specific steps required for 401(k) investment management decisions.
Seek out this type of investment advice instead. From an independent, third-party, fiduciary level investment advisor. With an established history of providing investment advice to individual 401(k) participants.
A ranking of mutual fund asset classes. The same asset classes populated by the mutual funds on your default company 401(k) mutual fund menu.
A ranking of all your default 401(k) mutual funds. By annual costs and investment performance.
Think “March Madness” here. Like your office pool. Or your fantasy football team each week.
A logical, organized, and disciplined system. To help identify the highest mutual fund seeds on your default 401(k) menu. Or the best mutual fund players for your fantasy 401(k) mutual fund team.
Seedings and rankings will help answer the age-old, “what to buy?” 401(k) investment management question. Don’t ever forget about the other important question.
“When do I sell?”
When the economic, stock market, and interest rate conditions change. Very much like they all have over the last two years.
Establish a place to protect your 401(k) principal. Best done by establishing a “stop loss” level for each 401(k) mutual fund you own. Or for the value of your 401(k) account.
When the “stop loss” level arrives, you are gone. No emotions or “thinking about it.” Sell that worst 401(k) mutual fund. And the proceeds go into the safety of the money market account.
You “live to fight another day” with your 401(k) principal. Go back to the seeding or rankings of your default 401(k) mutual funds. You can always reinvest in a better 401(k) mutual fund than the one you sold.
It’s not that hard. I would not have survived over 39 years in the investment advice business if it were hard. And have a long list of individual 401(k) investment advice clients who follow these simple steps.
I have spent years trying to improve my social media skills. Trying to find the best way to share my 401(k) expertise. Twitter, Facebook, LinkedIn Groups, blogging, etc.
I may have finally figured it out. Nothing beats a well-crafted newsletter delivered to your inbox once a week. With independent, fiduciary-level content specific to your 401(k) investment management decisions.
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