I admit I’ve made a critical investing mistake when it comes to my retirement accounts, one that I bet most people make too. I haven’t paid close enough attention, only now with the relaunch of this blog have I sat down and actually analyzed and compared the returns. Unfortunately I’m not too impressed with the results so far.

Only my own 401k has tracked the S&P 500 with an unimpressive break-even result. My IRA and both my wife’s retirement accounts have cumulatively underperformed the S&P. This is really unfortunate because we’ve been in a pretty steady bull market. I incorrectly assumed that having a significant allocation (10 – 15%) in Tech would boost our retirement account’s overall performance.

Unfortunately in this bull market that boost was blunted by having unusually large cash positions. This especially lowered my wife’s returns – she had close to 20% in cash while I had about 15%. We both should have been fully invested. When I rolled our 401k and IRA accounts over to Fidelity I assumed we were at a market peak and Trump or some other catalysts would spark a market meltdown. I incorrectly assumed there would be opportunities to invest at lower prices relatively soon. That was a novice investor mistake – you can’t time the market! You can’t anticipate when the next bear market or downturn is going to happen.

I’ve shared in recent posts how I dumped the bond portion (AGG) of my retirement portfolio as well as an underperforming small cap fund (FCPEX). Although small allotments, I know these two were also a drag on my returns. After all this analysis I have to admit my first inclination was to use the cash to buy, buy and buy, especially on a down day like today. However, I don’t want to fall into a psychological investing trap, immediately react to bad news and invest off of emotion.

I need a plan, a well thought out and tested strategy. Should I buy more Tech? Large Caps? Small Caps? Mid Caps? Individual Stocks? Actively managed funds or passively managed funds? Value or Growth? Momentum ETF or Sector ETF? I could go on and on, but the point is without a plan I would just be throwing darts at the board crossing my fingers that I choose a winner. I do know for sure I want to stay aggressive in my investing approach, I just have to decide on the method to do so.

In closing, do you know how your 401k and/or IRA is performing relative to the market? Spend some time with your financial adviser or an hour with Excel (or pencil and paper) and your statements and figure it all out. No matter the size of your account you need to be sure you are maximizing your returns and it is really easy to measure and compare the performance. It’s your money, make sure your it’s out there working for you!