Everyone has an area of their life that includes a set of blatantly obvious facts that are not oblivious to them. These are called blind spots. You either choose to “don’t care” or “don’t have time” to be bothered.
The periodic investment management decisions required to participate in a company 401(k) retirement plan account clearly fall in to both categories.
This blog post is a warning. Failing to pay any level of attention to the economic, interest rate, or stock market cycle can cost you a great deal of money.
Owing the wrong mutual funds in a declining stock market can set you behind several years of stocks market gains, personal contributions, and company-matching contributions.
I seek out individual company 401(k) retirement plan participants who are willing to listen to the recent advances in investment management technology. Specifically, how to better manage a default menu of mutual funds you did not select on your own.
This technology, combined with an independent, third-party, fiduciary-level investment advisor, has the potential to both preserve and grow your company 401(k) account with less stock and bond market risk.
In most cases, company 401(k) retirement plan participants don’t want to admit they picked a handful of wrong mutual funds. When presented with the raw data of past investment performance, they don’t want to admit their mistakes.
Most of my individual 401(k) investment advice clients are at the top of their profession. They are in the prime of their working career. They are not completely ignorant of investment management techniques.
There are mutual funds on your default company 401(k) menu you should not own. Their annual fees are excessive. Their investment performance lags the stock market averages in a rising stock market. These same mutual funds fall at a faster rate than the stock market averages in a declining stock market.
Excessive, lagging, and falling is not going to get your company 401(k) nest egg ready for your desired balance and retirement date.
The stock market volatility has increased. And interest rates seem to be steadily rising. Have you read anything lately about rising inflation?
Don’t turn away from constructive analysis from experienced professionals who provide independent analysis of your blind spots. Listen to feedback. Consider the source of the information. Have confidence in the fact that this information is provided in your best interest.
Ric Lager
Lager & Company, Inc.
