“‘This time it’s different’ are the four most expensive words in the investing language.”
Sir John Templeton
Now is an excellent time to learn from your past Minnesota company 401(k) retirement plan investment management mistakes.
The professionals who watch the U.S. economy and stock markets for a living every day have enormous influence over the direction of your stock and bond market investments. When these professionals begin to sell U.S. stocks, you absolutely need to be paying close attention.
A dramatic change in stock market direction can happen quickly. An individual investor can lose a decade’s worth of stock market investment gains in a few weeks.
At the end of May 2013, the S&P 500 was up over 14% for the year-to-date. Those investment gains for 2013 in your 401(k) are now at risk.
There are no guarantees in the stock market. When stock prices begin to decline from historically high price levels, common sense needs to become your best investment management decision.
The company retirement plan buzzwords of auto-enrollment, diversification, and pie charts all mean nothing when the emotions and the greed that control the U.S. stock markets take over.
Remember when the financial media told individual investors to buy-and-hold all the way down to the bottom of the last great stock market decline from July 2008 to March 2009?
The only 100% guaranteed investment management decision to preserve your hard-earned stock market gains is to sell part of your stock market holdings and place the proceeds into the money market account option on your company 401(k) retirement plan menu.
You are responsible for the long-term investment results of your individual company 401(k) retirement plan account. The people that manage the mutual funds you own in you your company retirement plan account only know how to buy-and-hold.
The U.S. government does not have any responsibility to preserve the value of your individual company 401(k) retirement plan account. You will never get a government bailout in your retirement years.
Right now, take a good look at how much risk you are taking being 100% invested in the U.S. stock markets in your individual company 401(k) retirement plan account.
If you are not comfortable with that risk, sell a part of your individual company retirement plan account holdings and preserve the principal. The most important investment management decision that you may need to make now is to preserve as much of this year’s investment gains as you can.
Ric Lager
Lager & Company, Inc.
