The recent stock market decline is a good time to remind all Minnesota stock market investors of a common stock market investor ailment.
Investors feel more emotional pain from an investment loss than they feel joy from an investment gain. This mental state affects their investment management decisions in a bad way.
Most company 401(k) retirement plan mutual funds are up in value for 2014. But there is always a single mutual fund that is down slightly, or “not up as much.”
Regret is a huge emotional problem in managing your stock market investments. Most investors regret ever having bought a bad investment in the first place. This regret then blocks them from making the right decision to sell their bad investment at the best possible time.
I help coach my clients to protect as much of their money as they can at a stock market high. The top of a stock market cycle is the best time to sell the worst mutual fund that you own.
Investment losses are not easy to take. Company 401(k) retirement plan investors can make up small investment losses by taking the same money and investing in a better mutual fund when the overall stock market environment improves.
Most losing investments never recover enough to “get back to even.” The best investment management strategy is to take a manageable loss and move on. This is especially true after a large stock market advance.
Watch closely the current stock market mutual funds that you own. Take advantage of your small losses. Protect your company 401(k) retirement plan principal now.
Ric Lager
Lager & Company, Inc.
