econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 10 January 2017

The Real 401k Plan Manager 09 January 2017

Written by , Clarity Financial

The Real 401k Plan Manager - A Conservative Strategy For Long-Term Investors


There are 4-steps to allocation changes based on 25% reduction increments. As noted in the chart above a 100% allocation level is equal to 60% stocks. I never advocate being 100% out of the market as it is far too difficult to reverse course when the market changes from a negative to a positive trend. Emotions keep us from taking the correct action.

401k-PlanManager-AllocationShift

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

  1. Tighten up stop-loss levels to current support levels for each position.

  2. Hedge portfolios against major market declines.

  3. Take profits in positions that have been big winners

  4. Sell laggards and losers

  5. Raise cash and rebalance portfolios to target weightings.

Step 2) Compare Your Portfolio Allocation To The Model Allocation.

  1. Determine areas requiring new or increased exposure.

  2. Determine how many shares need to be purchased to fill allocation requirements.

  3. Determine cash requirements to make purchases.

  4. Re-examine portfolio to rebalance and raise sufficient cash for requirements.

  5. Determine entry price levels for each new position.

  6. Determine “stop loss" levels for each position.

  7. Determine “sell/profit taking" levels for each position.

(Note: the primary rule of investing that should NEVER be broken is: “Never invest money without knowing where you are going to sell if you are wrong, and if you are right.")

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-ModelTarget-071616

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.

401k-Selection-List

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Investing


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Destruction of the Existing Workforce
Minsky’s Theory of Asset Prices: Why Minsky Was NOT a Neo-Monetarist
News Blog
Super Bowl Ad Prices Doubled In A Decade
What We Read Today 21 January 2017
People Who Laughed At TRUMP...and Said He Would Never Be President
Disentangling Cyclical From Structural
Rent Growth For Lower-Priced Rental Homes Stayed Strong, But Higher-Priced Rental Homes Slowed In 2016
How Do Imports Affect Manufacturing Jobs?
Active Vs Passive Investing: And The Winner Is ...
Infographic Of The Day: The Incredible Pigeon
Early Headlines: Global Unaffordable Housing, Trump Signs ACA Exec Order, Trump Orders Halt To Regs, HealthCare.gov Enrollments Increase, Greek Tragedy, China Household Debt Surges And More
The Rise Of The Gluten-Free Diet
Who's Smoking In The U.S.
Six Cosmic Catastrophes That Could Wipe Out Life On Earth
What We Read Today 20 January 2017
Investing Blog
Technical Thoughts: Three From The Trading Room
Why Are Investors Moving To ETFs?
Opinion Blog
Economics, Society, And The Environment: What's Wrong With This Picture?
How To Read Theresa May's Brexit Speech
Precious Metals Blog
Four Catalysts Drive Gold And Silver For 2017
Live Markets
20Jan2017 Market Close: U.S. Stocks Were Up But Off Their Highs Of The Session, Crude Prices Continue To Climb, Next Week May Be Volatile
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government





























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved