Most Minnesota company 401(k) retirement plan participants would be shocked by this information. That is the main reason for this blog post today.
The best 2013 investment performance on your company 401(k) retirement plan mutual fund menu was found in less than a handful of mutual funds.
You can find as many financial advice articles on the merits of diversification as there are days in a year. Diversification makes for a great investment management theory. In practice, diversification takes away more annual investment performance than it provides.
Check the 2013 investment performance rankings of your company 401(k) mutual fund menu. You can find that information on your year-end 2013 account statement. You can also find it online on your company 401(k) retirement plan web site.
You will find that less than five mutual funds provided the best investment performance in your company 401(k) retirement plan menu in 2013. You will also find a huge investment performance gap after those top five mutual funds.
When mutual funds rankings change, you have to change your investments along with them. Until that happens, stick with the best mutual funds available to you.
Diversification with the hope that they will someday a mutual fund that you own will be highly ranked on your company 401(k) retirement plan menu is a fool’s game.
If you currently own one of the best 2013 mutual funds, hang on to it. Every mutual fund you own that is not ranked near the top end of 2013 investment performance list should be sold now.
Great annual stock market performance can only come from owning the best mutual funds available to you. The investment management of your company 401(k) retirement plan account is not much more complicated than that.
You always take investment risk owning stock market mutual funds in your company 401(k) retirement plan account. If you own bad mutual funds you add to that risk.
Ric Lager
Lager & Company, Inc.
