posted on 24 August 2016
The Real 401k Plan Manager - A Conservative Strategy For Long-Term Investors
NOTE: I have redesigned the 401k plan manager to accurately reflect the changes in the allocation model over time. I have overlaid the actual model changes on top of the indicators to reflect the timing of the changes relative to the signals.
Waiting On Godot
It seems as of late that we have continued to wait on an event that seems as if it will never come. Such is the trial of money management and a disciplined approach to investing over the pull of emotional biases.
Sometimes, it seems, we get the "feeling" that we should do "something." Yet, as I try and detail here in this missive often, sometimes the best way to do "something" is to actually do "nothing." Such is the case now.
With bullish biases running near extremes, the risk of "doing something" greatly outweighs the potential reward of "doing nothing."
As discussed at length in the above missive, we certainly want to prepare ourselves to increase equity exposure in portfolios, however, we must patiently wait for the right conditions to apply those increases. Furthermore, while waiting for the relaxation of prices to make more prudent entries, it also enables investors to bypass potential "head fakes" of market actions.
Continue to do "something" by managing the inherent risk in your portfolio by:
If you need help after reading the alert; don't hesitate to contact me.
Current 401-k Allocation Model
The 401k plan allocation plan below follows the K.I.S.S. principal. By keeping the allocation extremely simplified it allows for better control of the allocation and a closer tracking to the benchmark objective over time. (If you want to make it more complicated you can, however, statistics show that simply adding more funds does not increase performance to any great degree.)
401k Choice Matching List
The list below shows sample 401k plan funds for each major category. In reality, the majority of funds all track their indices fairly closely. Therefore, if you don't see your exact fund listed, look for a fund that is similar in nature.
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