Think back to your last major decision. It was a career move, a relocation, a medical treatment, or something to do with love.
Did you make a quick choice without exploring your options? Or did you conduct research and gather as much information as possible?
Some people are comfortable making important decisions on their own. Others look to medical, legal, and financial professionals. All required by law to have their client’s best interest in mind.
What kind of company 401(k) retirement plan account decision maker are you?
Here are three reasons to get a second opinion on the company 401(k) retirement plan mutual funds you own right now.
1. Put a stock market risk management strategy in place
The U.S. stock market have risen for the last 10-plus years. World-wide interest rates are at record low levels. You could own any company 401(k) mutual fund option over the last decade and “made money.”
The next great stock market drop, or interest rate rise may have already begun. Either condition could affect your recent all-time high 401(k) account balance.
An independent, third-party, fiduciary level investment advisor will improve your readiness. Make sure your current 401(k) mutual funds reflect an appropriate level of stock and bond market risk.
You own company 401(k) mutual funds that have lagged the major U.S. stock market indices over the last few years. You have taken all the necessary stock market risk. But have not received the investment performance you deserve.
You do not have to be a stock and bond market expert to understand how that situation is not in your best interest. A third-party investment management professional can resolve this condition.
2. End doubt once-and-for-all
Your company relies on a 401(k) plan provider (Schwab, Fidelity, Vanguard, etc.) to select 401(k) mutual funds.
Does the phrase, “The fox guarding the hen house” have any meaning to you?
Your company approved the menu of 401(k) mutual funds selected by your plan provider. These providers promote their family of mutual funds over other mutual fund options. Seek out an unbiased opinion of the mutual funds on your default company 401(k) retirement plan menu.
Independent, third-party, unbiased mutual fund rankings are invaluable to 401(k) investors. If you do not have access to one, you have never asked a financial professional.
There is no mutual fund database that “has all the answers.” Investment advisors access a deeper level of mutual fund analysis.
Do you ever play fantasy football? Or fill out a men’s NCAA tournament bracket? If so, then shame on you. Spend as much time picking your 401(k) mutual funds as you do with either activity.
3. Two Heads are Better Than One
Using the “two heads are better than one” approach, more information is always better than less. Another logical, disciplined, and organized set of eyes can be invaluable.
No one can manage your company 401(k) retirement plan account for you. The right investment advice professional can improve your 401(k) investment management decisions.
Even more important now. A stock market risk management plan will preserve the last 11+ years of investment gains. And 401(k) contributions.
Stocks are near all-time highs and interest rates are near all-time lows. What direction do you think the next big move in your company 401(k) retirement plan account will be?
I have provided investment advice to 401(k) participants for the last 21 years. Lower annual mutual fund expenses. Improve investment performance. The combination of those elements is worth an annual investment advisory fee.
Ric Lager
Lager & Company, Inc.
