You should hold as much of your 401(k) as you can in stocks. Because stocks always provide better investment returns over the long run. Always better than other investments alternatives.
Bonds, international stocks, or the money market. Stocks beat them all over the long term.
“Buy-and-hold.” The greatest mutual fund marketing department tag line ever. Passed down from one investment generation to the next.
You can’t be a financial adviser with a long list of letters after your name if you don’t believe it. And tell your clients to believe.
Pie charts. Mountain charts. Beta, Alpha, and the kitchen sink. All remind you to hang on to your 401(k) stock market mutual funds and hope for the best when you are ready to retire.
Stocks always win. How many times you have heard that from an investment advisor? Or read that same marketing message in the financial media?
Do they take your letter credentials away if you tell a client to sell stocks?
Great question. For another blog post. It would be a great online argument to start.
The cult of mutual fund managers. At the same financial service 401(k) providers. A clear danger to individual l401(k) investors.
The stock market always goes up. Over the long term. 100% invested at all times.
But at what risk?
When was the last time you read about stock market risk? From someone who manages other people’s money.
This is a very timely question. The safety of the last several years of your 401(k) stock and bond investment gains is at stake. Along with your personal and company-matching 401(k) contributions over that time.
U.S. stock markets are trading at high valuations. Interest rates have remained high. Lower inflation should have happened by now.
I can’t predict the stock market future. But I have been in the investment advice business for over 40 years. And one thing I can tell you.
The last few years of your personal and company-matching 401(k) contributions are at risk now. Along with your 401(k) stock and bond market investment gains.
Measure the degree and timing of that risk at your discretion.
Ric Lager
Lager & Company, Inc.
There is no need to continue to keep your 401(k) principal at risk. It starts with a second opinion. You deserve it.
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