I wrote this article on September 15, 2011 on my Golden Valley Patch Blog.
Over the last few years, I have sat through dozens of introductory meetings with current retirement plan participants who live and work all over the Twin Cities. I am very familiar with many of the company retirement plan offerings of many of the largest employers in the Minneapolis-St. Paul metro area.
By far, the most common complaint I hear from 401(k), 403(b) or 457(b) company retirement plan participants is that they have no good source for independent analysis and investment strategy regarding the investment options available to them in their company retirement plan menu.
In my experience, many company retirement plan participants own several inappropriate and misunderstood investment options. By inappropriate I mean that the mutual funds owned are much too risky in the current stock market environment. By misunderstood I mean that the mixture of stocks and bonds in the mutual funds owned makes no investment common sense in the current economic environment.
Most mutual funds that company retirement plan participants currently own do not have one thing to do with the preservation of retirement plan account principal in a declining stock market environment.
Participating 100 percent in another stock market decline now is avoidable. The stock market is clearly going down now and stock market investing is a “high-risk” proposition at this time.
I would urge every company retirement plan participant to make sure that they know WHAT they own, and understand exactly WHY they own each individual investment option in their company retirement plan account now.
If you can’t honestly answer these two “WHAT?” and “WHY?” investment management questions now, I would suggest that your company retirement plan money market is the safest place to be invested now.
Ric Lager
Lager & Company, Inc.
