During the last great stock market decline of 2008-2009 many Minnesota company retirement plan participants remained 100% invested in stocks in their company retirement plan accounts.
In the face of increasingly dire economic and stock market news, these “buy-and-hold” company retirement plan participants rode the last great stock market decline all the way to the bottom.
To add to the financial pain, many of those same individual company retirement plan participants sold their stock market mutual funds long after the great stock market collapse had ended.
These “buy-and-hold” stock market mutual fund investors are exactly the kind of investor behavior that the mutual fund companies count on. These investors pay the bulk of the millions of dollars of annual mutual fund fees and expenses.
I know of many individual company retirement plan participants who had to postpone their desired retirement date, cut back on vacations, and lower the amount of financial assistance they provided to their college-age children. All due to the stock market collapse of several years ago.
In addition, the last great stock market collapse has added years to the working careers of many Minnesota couples near retirement.
In late July of 2012, we may be close to the top of another great stock market decline. No one can say for sure about the next big direction in stock market prices, but things are beginning to “feel” the same as four summers ago in 2008.
Now is another opportunity in your investment lifetime to learn from your past investment management mistakes. Review your company retirement plan account holdings now. Don’t take on more investment risk than you are comfortable with.
Ric Lager
Lager & Company, Inc.
