All-time stock markets highs and once-in-a-lifetime interest rate lows have made individual company 401(k) retirement plan participant look like investment experts.
Good investment times never last forever. The last several years of your company 401(k) retirement plan stock and bond market investment gains will be at stake at some point. The months of May through November have a long history of taking money away from individual stock market investors.
Along with your paper 401(k) investment gains, the last several years of your individual company 401(k) retirement plan contributions and your employer-matching contributions are at risk.
At some point, the stock market will fall in a big way. Interest rates will rise faster and higher than expected. The combination of a falling stock market can be devastating to a company 401(k) retirement plan account.
A principal preservation strategy is the most important company 401(k) retirement plan investment management issue that you face today.
The majority of my individual company 401(k) advice clients would describe themselves as “cautious” investors. Their emotional makeup regarding company 401(k) retirement plan investments is “safety first.”
Company 401(k) retirement plan mutual funds are promoted as passive investments. The financial media preaches that individual company 401(k) retirement plan investors to buy-and-hold at all times. Every day is a good day to be 100% invested in stocks and bonds.
You have risen to the top of your profession due to your hard work, experience, and skill. You “know what you know.” More importantly, you also acknowledge that you “know what you don’t know.”
Investment management skills are not something you are born with. Like any workplace skills, they are developed throughout a working adult lifetime.
Most individual investors don’t know the stock and bond market risk management tools necessary to make consistent investment management decisions in a six-figure company 401(k) retirement plan account.
Even if they had the experience and knowledge to manage their own money, most of my clients would rather spend their limited amount of free time and energy on something else.
In this current environment of stock market, interest rate, and political uncertainty, now is a good time to seek investment advice on your company 401(k) retirement plan account. There are independent investment advisors who act with a fiduciary level of care for their company 401(k) investment advice clients.
Ric Lager
Lager & Company, Inc.
