Tag Archives: 401k Proceeds

Different Sources of Money Should Enter Capital Markets Differently….TGIF

With the latest moves and risks of capital markets today, we wanted to outline our approach to investing in a possible frothy market.  We cannot wait on the sidelines forever, but there are reasonable strategies to minimize risk and still participate.

What is the strategy for investing new money now?

The answer is it depends on where the funds came from.  Walk with me here for a second and our logic will become clear.

  • If the funds are from the sale of a home, since this is a lower volatility asset, it pays to be cautious and maybe only invest a portion.
  • If the funds came from a well deserved bonus…source safe=conservative entry.
  • If the funds came from a “Beast” 401k rollover allocation, investing fully here in a more diversified and correctly allocated portfolio is ok, and a “net” “net” a lower risk proposition.
  • If the funds came from a major concentrated position in corporate stock…wipe your brow, take a deep sigh of relief and be cautious moving forward, making certain your allocation is correct.

You get the picture…the safer/lower volatility source, the more important to be prudent on re-entry!

What is not the correct investment right now?

We have all had the feeling…”The train is leaving the station…I am not aboard!” train leaving Do not bite, as chasing can be hazardous to our financial health.

There is always another train!

Rebalance, Rebalance, Rebalance

Long time correctly allocated investors (Clients) …as you know we are ringing that cash register when the fast growing/aggressive portions start to dominate the more conservative slower growing portions.  Always another train!

Have a great day and TGIF!

John Kvale

PS  The tax hangover is still with us, but our feet are getting closer to being under us…it is much better than the alternative!!

8222 Douglas Ave # 590
Dallas, TX 75225