Financial Opinion and Insights

Contributing To A 401(k)? Count Your Blessings!

Jim Lorenzen, CFP®, AIF®

Jim Lorenzen, CFP®, AIF®

Particpants in company 401(k) plans may be in the best market they could hope for! 

Yes, you read that right.  It was just about one year ago when I showed the math on why investors who don’t quit can win, even if the market goes down and only gets back to even!  You can read that post here.

Unfortunately, they don’t teach investment literacy in school; so, most plan participants know only what they see on the financial entertainment shows or in one of the consumer publications.   But, make no mistake about it, this is the time participants shouldn’t quit, especially if your employer is contributing for you with some kind of match!

Tune out the noise!  Just keep on contributing!  And, don’t try to pick winning stocks.   A good mix of low-cost indexes will likely do just fine.  Remember, studies show most investors can’t even tie an index, much less beat it – and that includes the so-called professionals!

Questions?  Talk to your plan advisor or to your personal advisor.  Of course, if all else fails, you know where to find me.


NOTE:  Jim Lorenzen was interviewed by The Wall Street Journal’s Glenn Ruffenach for an article appearing in SmartMoney magazine.  You’ll find it on page 46 in the September 2011 issue now on newstands.

Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER™ and an Accredited Investment Fiduciary®  in his 20th year of private practice as Founding Principal of The Independent Financial Group, a fee-only registered investment advisor with clients located in New York, Florida, and California.   IFG provides investment and fiduciary consulting to retirement plan sponsors and selected individual investors.  IFG does not sell products, earn commissions, or accept any third-party compensation or incentives of any description.  Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader.  The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.