NYTimes outlines how to remove Elon Musk-linked stocks from retirement accounts

In short: Some investors who want to avoid Elon Musk-linked companies in retirement accounts are using broad funds for diversification and then removing specific holdings like Tesla where they can.

What's going on

A New York Times opinion piece describes a practical approach for people who want to divest, meaning stop owning, Elon Musk-related companies in their retirement portfolios. The basic idea is to keep using broad index funds or target-date funds, then exclude specific holdings like Tesla when your plan allows it.

An index fund is a fund that simply follows a big list of stocks, like the S&P 500 (think of it like buying a whole “basket” of the market at once). A target-date fund is a retirement fund that automatically shifts to safer investments as you get closer to retirement.

The piece argues that trying to time the market is not the right tool for this goal. That means waiting for a “perfect” moment to sell or buy. Charles Schwab has said that this kind of waiting often costs investors more than it helps, and that getting the timing right is extremely hard.

For people with self-directed retirement options, the suggested move is straightforward. Sell funds or individual stocks that include Tesla or other Musk-linked businesses, then replace them with broad-market funds that fit your goals. The catch is that many popular index funds include Tesla, so you may need to check a fund’s holdings, meaning the exact companies it owns.

What to watch

There is no single best retirement product for avoiding Musk-related companies, because it depends on your account type and the limited menu of funds your plan offers. If more people try to screen out specific companies, retirement plans may face more requests for clearer fund holdings and more choice.

Source: NYTimes