Over the course of a month, I review between 10 and 15 new 401(k) retirement plan mutual fund menus. Since I started in 1999, that is a lot of reviews. By any international standard.
Every new 401(k) retirement plan menu reminds me of going to the candy store in the small town where I grew up. So many choices! But always a limited amount of time and money to spend.
And my mother was looking over my shoulder.
Your 401(k) retirement plan menu is the same. No matter how much time you spend reading the mutual fund descriptions. You are still not sure.
The required legal disclosures are frustrating. And mutual fund jargon is worse. Neither is disclosed in the same way individual investors talk. Or think. Or make investment management decisions.
Company 401(k) mutual fund menus are choice overload. A psychologist would call is the paradox of choice. There are too many possible mutual fund choices available. And the description of the choices is poorly presented.
Think about technological advancements in your chosen profession over the last few years. The same is true about 401(k) investment management technology. Times one hundred.
Are you still picking your company 401(k) mutual funds the same way you did several years ago? No reason to continue. Multiple reasons to “get with the program.”
Each of your current 401(k) mutual funds is categorized into an asset class. The easy solution is to find an independent, third-party, fiduciary-level ranking of mutual fund asset classes.
All the widely promoted financial media buzz words apply here. You can “diversify, “asset allocate” and “dollar cost average” to your heart’s content. But do any or all of it in the best 401(k) mutual funds available to you.
You might not know anything about mutual fund asset classes. No problem. I don’t know anything about your expertise either.
A 401(k) advisor can help you identify the mutual funds on your 401(k) retirement plan menu that rank the highest. The best mutual funds will provide a superior long-term 401(k) investment performance.
The best performing mutual funds usually have another important investment management characteristic. These mutual funds are low cost to own. Among the lowest annual cost mutual funds available.
Best investment performance. Lowest annual costs. What is not to like about improving your 401(k) mutual fund choices?
Do you play fantasy football?
Do you take part in the office pool every year for the NCAA men’s basketball tournament?
Each activity uses rankings. Independent of any self-interested service provider.
You can improve your 401(k) mutual fund choices. The same way you pick your favorite players. Or teams.
Ric Lager
Lager & Company, Inc.
MEET THE AUTHOR
Ric Lager is a Registered Investment Advisor specializing in 401(k) advice. He helps 401(k) participants improve their mutual fund decisions. The 401(k) self-directed brokerage account is a large part of his practice.
Ric provides independent, third-party fiduciary investment advice. He is not paid to sell 401(k)’s. Ask him about the dollar cost of owning the wrong mutual funds in your 401(k) account.
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