“The essence of investment management is the management of risk, not the management of returns.”
Benjamin Graham “The Dean of Wall Street”
The job of your company 401(k) retirement plan mutual fund manager is two-fold.
First, the mutual fund is supposed to deliver annual investment returns that are close to the stock or bond market index benchmark. You may be surprised to find out that countless studies over the years have concluded that active mutual funds routinely deliver below-average annual investment returns compared to the same indices.
Second, the mutual fund is supposed to have a game plan in place to preserve the capital that you have invested in the mutual fund in the event of a serious stock market correction.
How good of a job did your company 401(k) mutual fund manager do for you in evading the historic stock market decline of 2008-2009?
I thought so. Do you remember the jokes about how a 401(k) turned into a 201(k)?
It does not help growing your company 401(k) retirement plan balance to an all-time high in June 2015 if you have that same gut feeling that you are going to give back those investment gains in the next great stock market decline.
A great deal of investment management is just common sense. If you can’t rely on your company 401(k) mutual fund manager to consistently deliver competitive investment returns, what is the alternative?
I would ask the same question about the preservation of your precious company 401(k) retirement plan principal. What is another alternative?
There is technology available today to help in the selection, monitoring, and investment management decisions of the mutual fund options in your company 401(k) retirement plan account.
Successful long-term company 401(k) retirement plan account management requires that you change your appetite for stock and bond market risk as conditions change.
The protection of the principal in your company 401(k) retirement plan account is one of the biggest challenges that you currently face.
The problem is that you can’t call a meeting with the people who work at your company who can help you make better investment management decisions in your company 401(k) retirement plan.
The best investment management advice that you can receive on your company 401(k) retirement plan menu of options is from independent investment advisors outside of your company.
An independent investment advisor can thoroughly analyze your default menu of company 401(k) retirement plan menu options. The investment advice can be tailored for your specific long-term retirement plan investment objectives.
Get into the habit to enlisting independent investment advice services in order to make better company 401(k) retirement plan investment management decisions.
Ric Lager
Lager & Company, Inc.
