Do you want to preserve your 401(k) account value now?
It might be a good idea to keep the last couple of years of 401(k) stock market gains.
Along with your personal and company-matching 401(k) contributions.
If interested, then you need to do this:
Identify the worst 401(k) mutual fund or funds you own now.
How?
By ranking them. Think of Fantasy Football players here.
Ranked by annual investment performance, fees, and top stock holdings.
For example:
In most 401(k)’s the best fund in 2024 was the S&P 500 index fund.
Or any Large Cap Growth fund overweighted in large technology stocks.
The Magnificent Seven stocks.
“Buy-and-hold” works most of the time in your 401(k).
Large exposure to technology stocks is great in a rising stock market.
News Flash: We don’t have a rising stock market now.
Principal preservation is the best 401(k) investment management strategy.
Here’s a contrarian idea.
That flies in the face of what investment management industry teaches.
You know, “buy-and-hold.”
100% invested in your 401(k) at all times.
Conventional 401(k) wisdom. Since the invention of the 401(k) in 1978.
Buy-and-hold helped your 401(k) grow the last two calendar years.
The same 401(k) investment management strategy is about to kick your butt.
Your 401(k) principal preservation problem is not solved.
By “doing nothing,” your 401(k) principal is at risk now.
If the stock market averages drop 10%, how much 401(k) risk do you have now?
Interested in a 401(k) “stop loss” strategy now?
If so, comment below. Or let’s connect on LinkedIn.
P.S. A 401(k) “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).
Sign up to receive a well-crafted 401(k) advice newsletter.
Delivered to your LinkedIn news feed once a week.
