401k list of funds. How do you choose?
By admin ~ September 11th, 2009. Filed under: General.
401k list of funds. How do you choose?
This is my first time enrolling in a 401k plan and I have this list of funds in front of me to choose from. I have no idea what I am doing. What is the best way of determining which of these funds I should invest in? Websites? Talk to a professional? Thanks for the help in advance.
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September 11th, 2009 at 4:14 pm
Here is my asset allocation. Not saying this would be right for you. But think along these lines.
30% large caps
10% mid caps
05% small caps
20% international
25% bonds
10% cash
Now that you've set your asset allocation, then look at the funds available to you to fit the allocation. There are various online asset allocatiors out there. I like the one at cnnmoney.
September 11th, 2009 at 4:14 pm
Depending on your age you will want to invest for long term. The longer you have the more risk you may be willing to take for bigger returns.
Now is actually a great time to be investing with the market so low. As long as you are in a stable fund you money will grow rapidly.
Who administer's the fund? They should also have a website that should help educate you.
September 11th, 2009 at 4:14 pm
a. Domestic stocks.
b. Foreign stocks.
c. Bonds (fixed income).
If your plan offers a suitable target retirement date fund or balanced fund, that is a good choice. There's lots of info about this on the internet.
September 11th, 2009 at 4:14 pm