You are incredibly experience, competent, and successful in your career. You contribute each year to your company 401(k) retirement plan account. Your company-matching contributions help grow your retirement plan account value every year.
The last nine years of stock market gains and all-time low interest rates have grown the value of your company 401(k) retirement plan account to near all-time highs.
That is the good news. Now is the perfect time for a company 401(k) retirement plan investment management strategy review. For most individual investors, this review will include a very harsh reality check.
Let’s be honest. You have mostly guessed at which mutual fund options to own on your company 401(k) retirement plan menu. You have no earthly idea of the current stock and bond market risks you are taking with your retirement nest egg.
Deep down you know that the last few years of your stock and bond market investment gains can’t go on forever. At some point the stock and bond market music will stop. You just hope to find a chair before everyone else.
If you have paid any attention at all lately, you will notice that stock prices have been falling and interest rates have been rising. The combination of those two forces are the perfect storm. You are currently at a much higher risk level for losing a large part of the last several years of your company 401(k) retirement plan account investment gains along with your personal and company-matching contributions.
You have delegated your investment management responsibility in your company 401(k) retirement plan account to the professional mutual fund managers that you have hired. The stock mutual fund managers have been helped by one of the greatest stock market advances in U.S. history. The bond mutual fund managers have been helped by all-time interest rate lows.
Here is the upcoming danger. The current stock and bond market risk level conditions are changing. Do your completely trust your mutual fund managers to protect your company 401(k) retirement plan account?
All mutual funds managers have no stock and bond market risk management strategy whatsoever. Mutual fund managers will always keep you 100% invested at all times, regardless of the direction of stock prices or interest rates.
I am not calling for you to try to time the stock and bond markets by selling everything you own now. Instead, take the time to review the risk levels in your company 401(k) retirement plan account now. Before the next big stock or bond market event.
And have a plan in place for how you react to the continued drop in stock prices and rise in interest rates. You have to manage your company 401(k) retirement plan mutual fund managers.
I bet that fact is not disclosed on your company 401(k) retirement plan web site.
Ric Lager
Lager & Company, Inc.
