posted on 24 January 2017
The Real 401k Plan Manager - A Conservative Strategy For Long-Term Investors
Inauguration Behind Us
Well, fortunately, the inauguration of Donald Trump went off without any significant complications. With that all now behind us, as stated above, the markets will return their focus to earnings, economic data and policy actions coming from the White House. Trump has stated that his “executive order pen" will be working hard over the next couple of weeks so volatility in the markets remains a risk.
As I stated two weeks ago:
That still remains the plan for the moment, however, I would NOT be surprised for the markets to have a “relief rally" next week and make a push for “Dow 20,000."
As noted in the main body of this week’s missive, the current extremes on many fronts suggest investment risk remains elevated which is why I have not increased the allocation model to 100% as of yet. This is also why I have suggested over the last couple of weeks to use this current advance, and extension, as an opportunity to clean up portfolios. (Use guidelines noted previously.)
If we can get a correction that resolves the overbought, extended and excessively bullish backdrop to the markets currently, I WILL increase the allocation model to 100%. For now, we will wait and let the markets tell us what it wants to do next.
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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