For us at Compass Investors, a bull market is a time to make hay while the sun shines, but as we teach subscribers to our HORIZON™ newsletter, we can (and do) make gains in nearly any market, as long as we align our investments with its current direction by regularly monitoring market conditions. Our five-week reporting cycle helps to ensure that if our subscribers’ investments fall out of such alignment, that’s not the case for very long.

The danger is complacency. For over a year, Target Date Funds, or any strategy that “sets and forgets” has brought most investors success without all the energy of adjustment or even attention—with so little effort, in fact, that it’s easy to forget that a young worker whose “traditional” glide path would place her mostly in stocks as she began her career in the year 2000 would find herself at back at square one in 2015!

Even one or two adjustments during that period might have made things very different—but exactly which, and when? Timing the market is not the answer. As our data shows, all a HORIZON subscriber needed to do was make regular adjustments—every five weeks—to stay more or less aligned with the market. The algorithm isn’t perfect, and subscribers did take periodic losses, but the resulting X percent return—in the same period an investment in stocks yielded a total of zero—demonstrates the effect of an active rather than passive stance.

So is the market ready for a major correction? For us, that’s not the question to ask. The right question is this: do you have a method you trust, and one that you act on, on a regular basis? If you do, you’re ready for whatever comes down the line.

If an active 401(k) investing approach such as HORIZON™ is not yet available at your company, please contact us to learn how to incorporate such an alternative into your overall retirement saving strategy.