What Are The Best Investments I Can Make For My 401k?

Question

I noticed I have a few options,like I can spread out my percentage amoung 10 different investors,they are
THE CASH MANAGEMENT TRUST OF AMERICA(I have 100% on this one because it lowest risk),
AMCAP FUND,
THE INVESTMENT COMPANY OF AMERICA,
THE GROWTH FUND OF AMERICA,
NEW PERSPECTIVE FUND,
THE BOND FUND OF AMERICA ,
AMERICAN BALANCED FUND,
CAPITAL INCOME BUILDER,
U.S. GOVERNMENT SECURITIES FUND,
SMALLCAP WORLD FUND...I know some of these are high and low risk...How do I find out(website),or does anyone know what the best system would be .
I want basically want to know how to:"make -The Best Possible-money on my 401k,without screwing my self?"

Thank you everyone,I am new to 401k & any tips would be great

Answer 1

Contact your 401K place
they have financial advisers to help make the decisions best for your age, retirement age goal, etc

I have my 401k diversified - spread throughout my plan


having 100% in 1 fund is playing it too safe unless you are retiring within 4 years

Answer 2

It's harder to research your funds because your "plan" gives you names instead of symbols...but I was able to look at a couple.
As far as a"system" goes,that's for you to figure out based on your age and other things, but...generally you would put most of your 401 into something " balanced" or " blended" meaning some bonds in with some large ( safer) stocks.... then put some more into " growth" fund (in order to beat inflation some of your money has to grow faster than the bonds and large caps do), and then some money ( a little 10%-20%) should be invested globally...the rest of the world has caught us..they are working, building and growing like crazy....AND that makes you money( IF you're invested)
From what I could make out of the funds you listed, you've got a Balanced Fund, then check to see how the Growth Fund has performed....and your American Capital Income Builder has some global exposure....if you think the small cap World Fund is too risky.( or go 10% with each of the internationals)
You can move things if you're not happy after a year or so...but I think you'll see that some risk is worth it...when you compare percentage gains after a year or eighteen months.

Answer 3

American Funds can only be sold by a financial advisor so your plan has one that you can ask these questions of. Ask your employer for the phone number of the plan's advisor. Heck, you're paying for their services through higher fees, you may as well make them earn their money!

Additionally, the company should have given you an enrollment kit that had a questionnaire that helps you assess your risk tolerance. The higher the tolerance the more tilted towards the equity markets you should be. Equity funds are AMCAP,ICA,GFA, New Persp., Balanced, SmallCap World, and CapInc Builder. How much in a fund is dependent upon your personal tolerance. Just know that you can't have high returns with low risk...simply can't happen. So, if you need to build your balance fairly quickly, it's not going to happen in the CMTA...

Lastly, go to www.americanfunds.com and use their retirement fund calculator to see how much you'll need to save at retirement. Put in the amount that you'll realistically put away using an assumed 6% return...if that doesn't get you where you need to be up that % up to 7 and then 8% etc. This too will help you gauge how aggressive you need to get. If you have to get over 8% then you'll either need to put away more or get more weighted into equities then your risk assessment says you would feel comfortable with.

As I said, you're paying for a financial advisor already...make them earn their keep!

Answer 4

A lot of people will disagree, but I firmly believe the small cap world fund will serve you best in the coming periods. That, or any other international fund. Very frankly, this is the age of globalization, and the market hasn't fully recognized that yet, so the opportunities outside the U.S. are FAR superior to U.S. right now. I'd put about 50% internationally, and split the remainder among some of the growth or value funds in the U.S.

But, whatever you do, get out of that silly Cash Management plan. This is a long-term investment, and stocks always outperform bonds or cash over the long-term. If you're investing for a few years in a regular investment account, you can make a case for investing more "conservatively" but for long-term holdings like a 401-k, there is virtually no excuse for avoiding volatility. You just need to put your money in stocks and stay there regardless of the market ups and downs. There WILL be ups and downs, but you need to stand firm. This is the best advice you'll ever get.
Best of luck to you.

Answer 5

At your age, riskier money are perfect -- you have time on your facet. yet ... take a look into the time-honored of your money. Are they a minimum of Morningstar 3-megastar money (making use of 5-3 hundred and sixty 5 days score)? Are their administration expenditures useful? (a million.5% could be surely the suitable.) additionally, you may not be paying any commissions to purchase them. administration expenditures are corrosive. not a situation for the time of stable years, yet they're going to turn undesirable years into failures with the aid of the years. i've got had sveral 401ks with the aid of the years. i began a sparkling interest final 3 hundred and sixty 5 days, subsequently a sparkling 401k trustee, and the money in the recent plan are poor -- virtually each and every fund has administration expenditures in the two-3% selection, and virtually each and every fund is mediocre. So at this employer, each and every thing is going into an SP500 index fund which isn't attractive yet in addition the only element they are able to't screw up (and occurs to be the only fund with a sub-a million% administration fee). (merely BTW, once I pass away an employer, I easily have alwyas rolled my 401k to a chit brokerage like constancy or Schwab -- greater efficient money, decrease expenditures, and so on. it truly is a mistake to roll 401k money right into a sparkling employer's plan, in spite of the fact that there are situations the place conserving an previous employer's plan is a stable selection.) the final element is to be sure asset allocation. you do not desire money that are overly targeted on one marketplace -- gold money do nicely some years, and horribly different years. you desire large-image money that concentration on enhance or fee. the only exception i might make here is that some sector money look stable for long-term enhance, like electronics or biotech, yet even then i could be careful -- merely ask everybody who's been in well being care money over the final decade.

Answer 6

Lowest risk means less money at the time of your dead.

You should take more risk.