The year of 2016 is only a few trading days old. Already the reality of the world’s stock markets is in stark contrast with the long-term views of most investment professionals.
The investment professional pearls of 2016 investment advice have been rampant. If you have not put your life on hold to read these stock market crystal ball predictions, let me summarize for you.
Use the financial jargon terms listed below, in no particular order, in as few sentences as possible. This strategy can be used for financial media sound bites or quotations on financial media web sites.
Diversify
Buy-and-Hold
Asset Allocation
Dollar Cost Average
Buying Opportunity
A rapidly falling stock market puts a great deal of pressure on most investment professionals. And they are a stubborn bunch. They don’t easily change their stock market views even when faced with a changing set of facts.
The main company 401(k) retirement plan account storyline has never changed. You buy, and remain 100% invested at all times. If a dollar goes into your company 401(k) retirement plan account on Monday, be 100% fully invested on Tuesday.
The mutual fund companies will hold at the same time they tell you to buy. Buying-and-holding generates the maximum amount of annual fees for both company 401(k) retirement plan providers and mutual fund companies.
When the stock market ride gets bumpy, move your mutual fund holdings around in order to justify the annual investment advisory fees. I swear that I met an individual company 401(k) retirement plan participant who rebalanced her company 401(k) retirement plan account every year on her cat’s birthday.
As you get closer to your ideal retirement date, hope for the best outcome. I hope no one in your circle of family and friends retired in the early 2009.
The U.S. and world economic data has slowed down dramatically on a broad scale. Those facts eventually catch up with company earnings. Company earnings have gone backwards over the last few quarters.
Throw China’s stock market, the bombs in North Korea, and the 2016 U.S. election in the current headlines. You have more than enough to speed up the stock market pullback.
The latest round of financial media advice will again cost individual company 401(k) retirement plan participants large amounts of their retirement plan savings.
You have to change your company 401(k) retirement plan investment strategy when the stock market facts change. The next opportunity to do that is right now. You can easily avoid another company 401(k) retirement plan stock market disaster.
How many times in your business career have you changed the way you do things? Your company 401(k) retirement plan account needs the same level of commitment now. The stock markets are begging you to pay attention.
Ric Lager
Lager & Company, Inc.
