Many of my individual company 401(k) investment advice clients have been overwhelmed with work and personal duties over the last few months. The COVID-19 chaos has only added to the “work from home” stress and anxiety each day.
The need to prioritize work time and family relationships has resulted in missed opportunities and neglected personal financial matters. Even with all-time stock market highs, many personal investment management opportunities were missed in 2020.
There are several very important investment management decisions lurking in your upcoming 2020 year-end company 401(k) statements.
The good news is that your company 401(k) account values were up for the year 2020. The not-so-good news is that you most likely missed out on even larger company 401(k) account stock and bond market investment gains last year.
If you would like to resolve those missed opportunities beginning in 2021, I have an investment management priority decision for you to consider.
I certainly don’t mean to add another neglected personal or professional item to your New Year’s Resolutions list. In fact, this idea is intended to relieve the stress involved in your ongoing company 401(k) investment management responsibility.
My idea is to add an independent, third-party, fiduciary-level investment advisor to your financial management team.
The specialization in the business world today cannot be ignored. High level proficiency does not transfer between professionals these days. No one can be expected to be an expert in all areas of their business life. A good lawyer, a capable tax advisor, and an insurance professional should all be important members of your “money team.” I would argue that an experienced investment advisor should be part of that same team assembled by every individual investor.
Outside of your home, what is the largest financial asset you own that requires your ongoing attention? For most individual investors, the answer to that question is their company 401(k) account.
I have been blessed with very smart clients. One of the most important things that I have learned from working with their advisors is that when I don’t know something, I acknowledge it without hesitation.
When you are investing other people’s money, you can’t hope to eventually “figure this out.” You have to be sure that you have the right answer the first time.
If you are not especially gifted with investment management knowledge, take heart. You don’t have to know everything. There are professional investment advisors who do know. There are independent investment advice professionals who can answer your investment questions about “what to buy.”
You don’t have to take the time away from your family or career to figure out an investment management problem. The answer is already there. The complete explanation of every mutual fund on your company 401(k) menu can be clearly explained.
Have a conversation with an investment management expert. Develop a relationship with a knowledgeable, experienced, and trustworthy investment advice professional.
More important is an investment management game plan of “when to sell.” In this age of specialization, there is no reason on earth to continue to ride the stock market roller coaster up, and back down, every few years.
Ric Lager
Lager & Company, Inc.
