Not sure which fund to invest in for my 401K. I am 25 and the list is below:?

Question

HighMark Diversified MM Fid HMDXX
Stable Value Fund STABLECLA
Federated Mortgage Fund Ins Sv FGFSX
AIM Income Fund Inv AIIVX
Barclays LifePath Retirement R LPRAX
Barclays LifePath 2010 R LPRBX
Barclays LifePath 2020 R LPRCX
Barclays LifePath 2030 R LPRDX
Barclays LifePath 2040 R LPREX
HighMark Funds Value Momentum HMVMX
Vanguard 500 Index Inv VFINX
Davis New York Venture A NYVTX
Federated Capital Apprec A FEDEX
Vanguard Growth Index Inv VIGRX
Amer Century Ultra Inv TWCUX
Janus Twenty Fund JAVLX
Janus Mercury Fund JAMRX
Dreyfus Mid Cap Value DMCVX
AIM Dynamics Fund Inv FIDYX
HighMark Funds Small Cap Value HMSCX
Fidelity Advisor Small Cap T FSCTX
Fidelity Adv Diversifd Intl T

I have all invested in the HighMark Diversified MM Fid. Any suggestions on what I should change to? I am pretty sure I should not be putting all my eggs into one basket.

Thanks in advance for your help!!

Answer 1

Barclays LifePath 2040 will be good if you're not sure what you're doing. The fund will rebalance over time so that it is invested more aggressively while you're young and changes to a more conservative mix as you get closer to retirement.

If you don't go this option, here are some other ideas:

-The Vanguard 500 Index Inv mimics the S&P500 (so it's a large cap fund, mimics an index, and has low expenses)
-Get some mid caps & small caps by going with the Dreyfus Mid Cap Value and the Fidelity Advisors Small Cap
-Get international exposure by investing maybe 5-10% in the Fidelity Adv Diversified Intl fund
-I wouldn't recommend any fixed income (bonds) at your age since I think they are too conservative. If you really wanted to you could maybe go with 5%, but I don't think it's necessary.
-Make sure you put your money somewhere other than HighMark Diversified MM Fid--this is a money market fund and isn't a good option for a 25 year old

Answer 2

If you go to Vanguard.com you can get to a risk analysis questionaire. If you answer the nine or ten questions and tell what you are currently invested in they will come back with a suggested asset allocation strategy designed for you. They won't be bale to pick the funds you have on the list but they will tell you the types of funds and the percentages to use for each. you would then match your funds to the listed suggestions.
You have some good funds and a properly structured asset allocation will serve you well over the long term. Just keep in mind that you need to manage the mix. Rebalance periodically. If you have access to a web-site with your plan there is probably a rebalance feature included. Good luck, stay away from Berkshire he isn't going to live long eough to get you to retirement.

Answer 3

You are probably going to get almost no advice from your benefits administrator or from the 401(k) provider, because they don't want to give advice that they could be sued for.

If you don't want to do the due diligence yourself, then choose the Barclays Life Path 2040. It is probably more expensive, or a "fund of funds," but what it does is it sets up a predetermined asset allocation for people looking to retire in 2040. My guess is it's probably 80 to 90% invested in equities. As you get closer to retirement (2040), these types of funds become more and more conservative. This way you don't have to sit there and pick your individual mutual funds yourself, it's automatically done for you. It will also keep your allocation balanced.

Answer 4

I advise you to put your money in the Vanguard 500 Index Fund or Vanguard Growth Index Inv VIGRX as history shows that Index will out perform any small/mid/Large Cap fund most of the time. **Please note that I said most of the time** In terms of putting all your eggs into one basket, it really depends on how much money you have in there. If you only have a couple thousands in the 401K, I will say don't worry about diversifying~!! It really doesn't matter in such small amount. Beside, Index fund is already diverfisifed for you. So I will advise you to put your money in the Index fund.

Answer 5

All these funds do the same thing. They invest in advertising. Berkshire Hathaway is where to put your money. But getting in is almost impossible. Most will do the average job. If stocks go up they may go up. They charge fees. I suggest you read Rich Dad Poor Dad and the Prophecy. It has to do with the Market. Frankly there are ways to make your 401K work for you actively by incorporating and putting it into the corporate umbrella. This will allow you to invest in real estate and other holdings that produce huge gains. The Real estate market is getting hot for investors. Not for the common guy because he is not an investor. Remember no matter what you decide to invest in; You make your money when you buy so buy right. If you buy right low enough you can sell below market and make a profit.

Answer 6

50% on Fidelity Adv Diversifd Intl T. This looks like an international fund. Spread the rest in US large, mid and smallcap I Shares.

Answer 7

I prefer a stable fund where my principle will not decrease. I'm just not a risk taker and want to be able to sleep at night with no concerns of my nest egg.

I know a lot of people who lost over 50% of their 401K in the year 2001, when the stock market took a dive.

Answer 8

You are correct; it is not wise to have it all in one fund. However, I think your employer's benefits manager might be a better advisor than us laymen. Just a thought.

Answer 9

Hello,

I completely agree with wanting to invest your money. Afterall, what's the point of making money if you can't make more money with your money (got that?)? Anyway, I've tried all different investments from stocks and bonds to IRA's, 401k's, and real estate. I'm really a big fan of diversification.

However, the only investment I've really been happy with so far is real estate. Over the past 5 years, I've bought 3 different properties (all have tenants, and I'm making more than the mortgage payments on 2 properties).

The 3rd property I got was using Carleton Sheets no money down methodology (he's a GURU in real estate, and yes, his methods do work!). You can actually buy a property for absolutely nothing down (NO MONEY FROM YOUR OWN POCKET). I payed over $500 for his course 3 years ago, and I just saw it online for $9.95!!!! This is a steal at $9.95 (I'm actually going to buy it for my friends for Christmas). It was featured on TV, so I got the website from there.

Before you invest in anything, I highly suggest the Carleton sheets course. http://www.alllsite.info/real-estate.php