You need to rethink the current stock market risk level in your 401(k).
It’s a simple shift.
Not hard if you use the right mutual fund analytical tools.
Because the main direction of the U.S. stock markets may shift.
If the new tariffs hurt company earnings going forward.
Switch from your 401(k) “making money.”
To protect your 401(k) from “losing money.”
For the last several years. Since 2009.
Large Cap Growth stocks have dominated 401(k) mutual funds.
The major U.S. technology companies (The Magnificent Seven).
Fueled the sales and earnings growth of the S&P 500 index.
To near-record price levels.
No matter the name of the mutual fund.
Even target date mutual funds are dominated my Large Cap Growth stocks.
What if the tariffs slow down or stop the growth of S&P 500 earnings?
The Large Cap Growth stocks that dominate that index.
And the largest companies you own now in your 401(k) mutual funds?
The Magnificent Seven currently make up about 28% of the S&P 500 index.
Historically a high percentage.
A scary percentage in a single mutual fund asset class.
Let me be even more dire in my warning.
The “buy-and-hold” S&P 500 index mutual funds is waning.
The same goes for the “buy-and-hope” Large Cap Growth mutual funds.
Each have been the best 401(k) investment for years.
Individual 401(k) investors lulled to sleep.
Because they could.
Want to know how much your 401(k) mutual funds are leveraged?
To the S&P 500 index and/or the Magnificent Seven stocks?
P.S. The last few years of your 401(k) stock market gains matter.
Don’t be surprised by how much they matter.
It starts with a second opinion on your 401(k) mutual funds.
The ones you own. And the ones you should own.
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