The S&P 500 is on the verge of back-to-back annual 20%-plus gains.
Many individual 401(k) investors I talk to are concerned.
They know. Stock market gains can disappear quickly.
In the study which they first described prospect theory, Daniel Kahneman and Amos Tversky found losses have more emotional impact than an equivalent amount of gain.
401(k) investment advice needs to consider the irrational decisions made by many individual investors.
A rules-based 401(k) investment management process is the answer.
A rules-based 401(k) “stop loss.”
No gray area.
If the stock market takes a 401(k) mutual fund down in price.
Or the overall stock market drops in value.
A percentage or dollar amount. Whatever works best for your personality.
A logical decision to preserve recent 401(k0 stock market gains.
Along with personal and company-matching 401(k) contributions.
Before they might disappear.
Interested in a 401(k) “stop loss” strategy now?
If so, comment below.
Interested in a 401(k) “stop loss” strategy now?
If so, comment below. Or let’s connect on LinkedIn.
P.S. A “stop loss” strategy may sound scary at first. Once you use it in your 401(k), you will always use it in your 401(k).
Interested in a second opinion on your 401(k) mutual funds now?
If so, comment below. Or let’s connect on LinkedIn.
P.S. Or sign up to receive a well-crafted 401(k) advice newsletter. Delivered to your LinkedIn news feed once a week.
