This Article was written by me on September 22, 2011 on my Golden Valley Patch Blog.
The big news in the business world this morning is another huge drop in the world stock markets. Most stock market professionals blame the banking crisis in Europe as the main reason that the U.S. stock markets have dropped in value so dramatically in the last few days.
Any time you have bank stocks selling off dramatically, it cannot be a good sign for other stocks to be owned. That is exactly how the last great U.S. stock market decline began in summer 2008.
Right now is another once-every-few-years opportunity to stop and take a good hard look at exactly what you own in your company retirement plan account. If you own a mutual fund that you don’t understand, now is the time to sell it and put the proceeds into the money market fund.
I would also urge you to take money out of the stock market now if you are concerned about the direction of world economic events over the next few weeks.
It makes no long-term sense whatsoever at this time in the both the world and U.S. stock market cycles to try to “buy-and-hold” stock mutual funds in your company retirement plan account.
You don’t have to relive the dramatic stock market losses of three years ago in your 401(k) plan. Get enough of your current company retirement plan balance out of the stock market now and into the safety of the money market account.
The current stock market decline will eventually come to an end. The most profitable way to take advantage of the bottom of this current stock market cycle in your 401(k) account is to have a money market balance to invest when the stock market begins to rise again.
Ric Lager
Lager & Company, Inc
