Review Your 401(k)

23Jan09

As everyone knows, we’re right in the middle of one of the toughest economic periods our country has ever faced. In many cases people have seen their investment accounts, 401(k) and non-401(k), cut nearly in half. In some cases it’s even worse than that. This creates so much uncertainty and panic for the average investor, 401(k) participant, and plan sponsor. The most common reaction is to freeze, throw away your statement without opening it and do nothing. That is actually the right thing to do in very few arrangements, where you are absolutely certain that you have a prudent approach, you completely understand the fees associated with your investments, you’re well diversified and have a program designed to rebalance your account when it’s “out of whack”.

As I stated in my previous blog there are way too many products available for the 401(k) industry, and way too many people with their hands in the cookie jar. Please take this unique economic state we’re facing and be proactive. Make sure you have your plan in an open architecture arrangement, with full disclosure and fee transparency. Work with at least one independent service provider to help ensure checks and balances, and to avoid conflicts of interest. Lastly, make sure you have in place a prudent approach for how your investments are selected, monitored and replaced. Ultimately superior performance only comes with a solid “method for your madness” from the get-go. Without that you may find great performance from time-to-time, but it’ll most likely be owed to luck.

This market will turn around and we will see great days of prosperity, and growth again. It’s very important to make sure you’re in the best position possible now, and as we move towards those brighter days.

Yours truly,

Ronald J. Sloy

Learn more about Ron Sloy.

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