The Way to Maximize Your 401k Mutual Fund Returns

The Way to Maximize Your 401k Mutual Fund Returns

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When it comes to 401k’s there is an overabundance of sad stories. This is one that at least has a happy end –and it’s getting happier all the time.

Last year (in 2002) a friend of mine–let us call him Jack–telephoned and asked if I could help him with his 401k. But when it came to his 401k mutual fund decisions, he had repeatedly made the exact same mistake most people were creating. Because of this, he saw his account drop in value substantially.

In the time we had been in the middle of the 2000 bear market, which showed no indication of letting up. From the time he finally bailed out, it cost him dearly. But he continued to make the identical mistake.

He checked with the 401k representative and subsequently switched to Many Different mutual funds Which Range from World Stock to Domestic Hybrids, Large and Small Value in Addition to Growth. But nothing worked and his portfolio value headed further south.

From the time we met to discuss his 401k Jack was pretty disgusted by the canned advice he had received and the continued losses he was sustaining.

Jack knew that I had pretty much eluded the bear market of 2000 by having sold all of my clients’ positions on 10/13/2000. We were safely in our money market accounts weathering out the storm (see my article “How we eluded the bear in 2000.”

Thinking about this, Jack could only shake his head because at no stage in the market slide had he ever been given what I believe was the ideal advice. In other words, nobody suggested that, because we had been in a bear market, he may want to step aside and remain in the safety of his money market accounts. So he stayed invested, hoping against the evidence all around him to find something that wasn’t crashing. This was his mistake, and one shared by many.

The advice he consistently and continually received was that the market was near a bottom, stocks”have to” move up from these levels, and, my personal money losing favorite,”the market can not go any lower.” That is what people wanted to listen to and think. But my tracking system said otherwise, and I followed its indicators.

Jack wanted to know how I could help. Looking at his mutual fund choices I realized they were actually pretty decent, and he had a variety of some 13 funds. What is the issue and how can we solve it? In a sense, the answer has been straightforward. But people were having to get pretty beat up before they’d see it.

My first step was, with Jack’s permission, to log on to his 401k web {} . Since my trend tracking model was still in a Sell mode, I liquidated all his positions and moved the proceeds into money market. This accomplished one thing right away. When you stop moving backward, in relation to everyone else you’re moving forward!

Second, as my trend index moved into a Buy mode on April 29, 2003, I researched his funds again. Based on strong momentum figures, I invested in two of his mutual fund choices. The end result was very gratifying: the funds I chose moved up around 10% in the two weeks after my purchase. (Other funds I’d tracked and selected for other kinds of investment programs moved up as much as 26% in that period.)

Jack’s been happy ever since. While the 10% appreciation isn’t as good as I had been able to do with assets outside his 401k, it still confirms that the key to successful investing is methodology and discipline. Our disciplined approach relies on objective information. It disregards Wall Street hype designed to perpetuate commission-rich purchase now while it’s low, or buy and hold strategies.

In case you’ve been in a situation similar to Jack’s, or you need to avoid being in 1 Find Article, find an investment advisor who bases his decisions on a measured and objective approach. That will provide you the edge no matter whether the market is going up or down and will provide you the best protection from sad stories with your 401k.

|When it comes to 401k’s there is an overabundance of sad stories. This is one that at least has a happy end –and it’s getting happier all the time.

Last year (in 2002) a friend of mine–let us call him Jack–telephoned and asked if I could help him with his 401k. But when it came to his 401k mutual fund decisions, he had repeatedly made the exact same mistake most people were creating. Because of this, he saw his account drop in value substantially.

In the time we had been in the middle of the 2000 bear market, which showed no indication of letting up. From the time he finally bailed out, it cost him dearly. But he continued to make the identical mistake.

He checked with the 401k representative and subsequently switched to Many Different mutual funds Which Range from World Stock to Domestic Hybrids, Large and Small Value in Addition to Growth. But nothing worked and his portfolio value headed further south.

From the time we met to discuss his 401k Jack was pretty disgusted by the canned advice he had received and the continued losses he was sustaining.

Jack knew that I had pretty much eluded the bear market of 2000 by having sold all of my clients’ positions on 10/13/2000. We were safely in our money market accounts weathering out the storm (see my article “How we eluded the bear in 2000.”

Thinking about this, Jack could only shake his head because at no stage in the market slide had he ever been given what I believe was the ideal advice. In other words, nobody suggested that, because we had been in a bear market, he may want to step aside and remain in the safety of his money market accounts. So he stayed invested, hoping against the evidence all around him to find something that wasn’t crashing. This was his mistake, and one shared by many.

The advice he consistently and continually received was that the market was near a bottom, stocks”have to” move up from these levels, and, my personal money losing favorite,”the market can not go any lower.” That is what people wanted to listen to and think. But my tracking system said otherwise, and I followed its indicators.

Jack wanted to know how I could help. Looking at his mutual fund choices I realized they were actually pretty decent, and he had a variety of some 13 funds. What is the issue and how can we solve it? In a sense, the answer has been straightforward. But people were having to get pretty beat up before they’d see it.

My first step was, with Jack’s permission, to log on to his 401k web {} . Since my trend tracking model was still in a Sell mode, I liquidated all his positions and moved the proceeds into money market. This accomplished one thing right away. When you stop moving backward, in relation to everyone else you’re moving forward!

Second, as my trend index moved into a Buy mode on April 29, 2003, I researched his funds again. Based on strong momentum figures, I invested in two of his mutual fund choices. The end result was very gratifying: the funds I chose moved up around 10% in the two weeks after my purchase. (Other funds I’d tracked and selected for other kinds of investment programs moved up as much as 26% in that period.)

Jack’s been happy ever since. While the 10% appreciation isn’t as good as I had been able to do with assets outside his 401k, it still confirms that the key to successful investing is methodology and discipline. Our disciplined approach relies on objective information. It disregards Wall Street hype designed to perpetuate commission-rich purchase now while it’s low, or buy and hold strategies.

In case you’ve been in a situation similar to Jack’s, or you need to avoid being in 1 Find Article, find an investment advisor who bases his decisions on a measured and objective approach. That will provide you the edge no matter whether the market is going up or down and will provide you the best protection from sad stories with your 401k.

|When it comes to 401k’s there is an overabundance of sad stories. This is one that at least has a happy end –and it’s getting happier all the time.

Last year (in 2002) a friend of mine–let us call him Jack–telephoned and asked if I could help him with his 401k. But when it came to his 401k mutual fund decisions, he had repeatedly made the exact same mistake most people were creating. Because of this, he saw his account drop in value substantially.

In the time we had been in the middle of the 2000 bear market, which showed no indication of letting up. From the time he finally bailed out, it cost him dearly. But he continued to make the identical mistake.

He checked with the 401k representative and subsequently switched to Many Different mutual funds Which Range from World Stock to Domestic Hybrids, Large and Small Value in Addition to Growth. But nothing worked and his portfolio value headed further south.

From the time we met to discuss his 401k Jack was pretty disgusted by the canned advice he had received and the continued losses he was sustaining.

Jack knew that I had pretty much eluded the bear market of 2000 by having sold all of my clients’ positions on 10/13/2000. We were safely in our money market accounts weathering out the storm (see my article “How we eluded the bear in 2000.”

Thinking about this, Jack could only shake his head because at no stage in the market slide had he ever been given what I believe was the ideal advice. In other words, nobody suggested that, because we had been in a bear market, he may want to step aside and remain in the safety of his money market accounts. So he stayed invested, hoping against the evidence all around him to find something that wasn’t crashing. This was his mistake, and one shared by many.

The advice he consistently and continually received was that the market was near a bottom, stocks”have to” move up from these levels, and, my personal money losing favorite,”the market can not go any lower.” That is what people wanted to listen to and think. But my tracking system said otherwise, and I followed its indicators.

Jack wanted to know how I could help. Looking at his mutual fund choices I realized they were actually pretty decent, and he had a variety of some 13 funds. What is the issue and how can we solve it? In a sense, the answer has been straightforward. But people were having to get pretty beat up before they’d see it.

My first step was, with Jack’s permission, to log on to his 401k web {} . Since my trend tracking model was still in a Sell mode, I liquidated all his positions and moved the proceeds into money market. This accomplished one thing right away. When you stop moving backward, in relation to everyone else you’re moving forward!

Second, as my trend index moved into a Buy mode on April 29, 2003, I researched his funds again. Based on strong momentum figures, I invested in two of his mutual fund choices. The end result was very gratifying: the funds I chose moved up around 10% in the two weeks after my purchase. (Other funds I’d tracked and selected for other kinds of investment programs moved up as much as 26% in that period.)

Jack’s been happy ever since. While the 10% appreciation isn’t as good as I had been able to do with assets outside his 401k, it still confirms that the key to successful investing is methodology and discipline. Our disciplined approach relies on objective information. It disregards Wall Street hype designed to perpetuate commission-rich purchase now while it’s low, or buy and hold strategies.

In case you’ve been in a situation similar to Jack’s, or you need to avoid being in 1 Find Article, find an investment advisor who bases his decisions on a measured and objective approach. That will provide you the edge no matter whether the market is going up or down and will provide you the best protection from sad stories with your 401k.

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