BRIDGEPORT, W.Va (WDTV)- Question: My 401K plan now offers sector funds, and I noticed they are doing really well.
Answer (John Halterman, Beacon Wealth Management): "Josh, absolutely! And our own individual advisor portfolio review sector funds because what happens in sector funds is an a good market, it gives you a chance to have additional exposure to limited asset classes. Potentially this could give you a higher opportunity for better returns."
Question: But are there any negatives associated with that?
Answer (John Halterman, Beacon Wealth Management): "Absolutely, you really have to watch out because with higher returns also comes high-risk. Unfortunately, with sectors the volatility is much much faster.
What you can experience is the good side it can absolutely turn on you super quick. The one thing in our advisory portfolio is is we have a tendency at times to go out of the market and that’s how we mitigate risk.
I tell people to make sure, if you don’t have that ability to get in and out of the market, you have to figure out how you’re going to mitigate risk when you’re using things that have extra exposure to the markets on the downside."