This past week I decided to convert my 401(k) into a rollover IRA and I’d like to share with you why. As I wrote in a previous article, I took profits in my 401(k) after the S&P 500 reached the 1,551-1,555 range. That’s a 9% gain for the year and inline with my 2013 forecast which now seems conservative with every pundit on the street calling for 1,600+. Where were their calls at the end of last year I don’t know. I guess it’s easy to get bullish after the market has made a strong move!
Given I no longer have earned income, I can no longer contribute to my 401(k). The market is fully valued in my opinion which means I see a greater risk of a pullback during the summer than continued gains. Even though my 401(k) has 40 or so mutual fund choices provided across various sectors, countries, and asset classes it isn’t enough for what I want to do.