posted on 10 January 2017
The Real 401k Plan Manager - A Conservative Strategy For Long-Term Investors
Started With A Bang
With the last holiday-shortened trading week behind us, and traders coming back to work in force on Monday, look for some selling next week. (Managers can take in gains and not pay taxes until 2018)
The last three years have seen some pretty decent corrective actions in January. However, when you have three years in a row of anything, the odds rise this year could be different. However, we don’t want to necessarily “bet on that" with our retirement money.
With buy signals on all three indicators registered currently, any corrections are likely to be somewhat limited back to the rising short to intermediate-term moving average. This would suggest a correction back to 2200 would likely be a “buyable" trading level. As noted in the chart above, the current extension above the moving average will likely be corrected in fairly short order and we can use that correction to rebalance allocation models for the beginning of this year.
As noted in the main body of this week’s missive, there are many statistical indications that make the current year ahead a coin flip as to outcomes. After 8-years of a cyclical bull market, excessive risk taking in portfolios is having diminished rates of return particularly given the extraction of liquidity by the Fed.
Use this current extension in the market to continue rebalancing portfolios following the guidelines detailed in previously.
Step 1) Clean Up Your Portfolio
Step 2) Compare Your Portfolio Allocation To The Model Allocation.
Step 3) Have positions ready to execute accordingly given the proper market set up. In this case, we are looking for a correction to reduce the overbought condition of the market to allow for a better opportunity to rebalance equity risk.
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.
>>>>> Scroll down to view and make comments <<<<<<
This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved