What is the safest way to invest a 401k with the highest return over the next 10 years ?

Question

My 401K is currently in mutual funds and has dropped in value over the last 60 days. Having had negative experiences in the stock market in the past, I am thinking of moving to a more secure investment source. What would that source be?

Answer 1

Depends on if you are still employed and are still contributing. If yes, If you are dropping in value re-allocate your funds.

If you are retired, or not employed there anymore, you can rollover your account to a qualified plan that is safer.

I do it for folks every day for free. We offer 6.5% and there is no risk. If you wish, I would be happy to get you in contact with someone in your state to get you this info.

Answer 2

First, unless they were invested in cash only, most everybody's 401k dropped in value over the last 60 days.

Over the long haul, history tells us the market gains an average of about ~10% per year. This does mean that there are ups and downs. It is not a straight line up.

There is no guaranteed "safest way" with "the highese return". If you want a safe return with no downside, then you have to invest in cash (money market) only, assuming you have that option. Unfortunately, this has the lowest return.

Bottom line - a 401K is a great way to save for retirement. It does have limited choices based on your company's fund options. There is no 100% right answer, but if your company has a large cap index fund, or a fund that mimics the S&P500, that is a conservative option with reasonable return.

Answer 3

"Safest" and "Highest Return" are usually mutually exclusive. Usually the more risk you take, the more reward you can achieve, but also the greater the chance for losses.

The question to ask yourself is how much risk are you comfortable with. Then allocate your funds accordingly between stocks, bonds, cash equivalents, etc. See sites like Fidelity.com or Vanguard.com for more indepth discussions on allocating and risk.

Then make your decision and stop watching the 401(k), except maybe once a year to adjust the allocations again.

Also, Fidelity offers Freedom Funds, and Vanguard offers Target funds. Both are retirement funds that diversify your investment across small caps, mid-caps, large caps, international stocks, gov't bonds, corp bonds, REITS, etc. for you. As you get closer to your retirement date, they adjust that diversification for you within the fund, moving you into lower risk investments. This truly is as simple as it gets.

Answer 4

The number one rule for investing is have the right "asset allocation". The #2 rule is understand what you have.

If you understood what (& why) you're in certain investments you wouldn't be scared by a "drop in value".

An asset allocation (correctly done) will have different types of investments to help protect you (different classes of stocks [for example] ) from the cycles of a market.

Over the long term Stocks, bonds & REIT's are the best way to accumulate wealth and beat inflation.

DON'T HURT YOU FUTURE. Learn about ASSET ALLOCATION & stay steady in your course.

BTW: Kevin M's answer is great!
ALSO: Dodge & Cox Balanced is closed to new investors(great fund).

Good luck.

Answer 5

You should move the money twice a year, just like the big fund managers do.

Have you heard this, phrase. "May, go away". This means pull out of aggressive funds and have all of them in a guaranteed investment, from May to end of October.
In November move all of the money into a full on aggressive account, this will be safe and make the maximum on the returns.

Most people are to stupid to do this, they never listen. They take the approach, I don't want to know how to. Which can be suicide to their retirement account.

Keep in mind, I made 34% returns on mine, when someone else says not to do this.

Answer 6

a conservative balanced fund such as Dodge and Cox balanced with a 20% kicker in a reit fund