Posted by There have been a few stories in the news lately about how the 401k plan has failed to live up to its expectations. My 401k account (now an IRA) has been my best preforming investment. During my working years, I recall going to presentations from investment professionals who talked about the various 401K investments options. Every few years there would be modifications to the list of mutual funds that were available. For the most part, all of the options were fairly conservative, with maybe a dozen target dated and bond funds to choose from. You could pick a fund with the date of your retirement. The fund would change the percentage of stocks to more bonds each year. The idea is that your investment will automatically get more conservative the closer you get to retirement.
I recall some people saying they had all of their money in the most aggressive fund. Then I would hear them complain when the stock market went down for several weeks in a row. I avoided the more volatile funds and stuck with large cap and target date funds. When I quit working and rolled my 401k into my IRA, I kept the same strategy. Here is a partial list of my fund holdings and how much they have increased:
- FASGX (FIDELITY ASSET MANAGER 70%) +112.62%
- FELC (FIDELITY ENHANCED LARGE CAP CORE ETF) +126.88%
- FFFEX (FIDELITY FREEDOM 2030) +153.30%
- FPURX (FIDELITY PURITAN) +159.65%
- FSMEX (FIDELITY SELECT MED TECHNOLOGY & DEVICES) +156.06%
These are what I would call my core holdings. Dividends have been reinvested over many years. As of July 2025, my IRA has gained +94.55%. So, why am I not excited about a new record balance? First my balance is only average for my age. And second, every time a new record is set, there is usually a significant drop shortly after. These drops tend to take years to recover from. Also, unlike when I was working, I now use a portion of my investments to pay my living expenses. So, while I’m pleased with the results, I know the market is due for a correction. It will most likely be triggered by what happens next with tariffs and interest rates. Or something completely unexpected, as has been the case several times in the past 30 years.