Should I just keep it in the money market account and gain little to no interest or should I try medium or high risk. Basically I'm just looking for some direction. Anyone that has experience with this type of thing. Help!
2007-01-12 13:41:21 · 5 answers · asked by Anonymous in Business & Finance ➔ Investing
I'm 25 Years old. That'd probibly help ya.
2007-01-12 13:54:38 · update #1
Let your age be your guide... the more time you have, the riskier you can be to give time for the inevitable ups and downs of the market. Don't put it all in any one area... diversify!!!
2007-01-12 13:48:29 · answer #1 · answered by Anonymous · 2⤊ 0⤋
Personally I wouldn't want to take any significant high risks with my 401K.
You should be getting about a 5% return on your money in the money market account. If not, you are invested in the wrong MM account.
You didn't say if your 401K was a company 401K with limited choices or with a brokerage firm with thousands of choices. Any answer would depend on what your options happened to be.
If you have a choice as to where you put your 401K, for safe investing with good returns consider the Fidelity Freedom Funds. These are no load mutual funds that are a balance of stocks, bonds and treasuries. You choose a fund based on generally what year you want to retire. The funds like Fidelity Freedom 2030 or 2040 Funds are more aggressive and contain different mixes of stocks, etc plus take more risks than say the Fidelity Freedom 2010 or 2015 Fund which are designed to have much less risk. You then have your choice of numerous professionally managed no load mutual funds where you can choose your own level of risk, although generally speaking these particular Fidelity Freedom funds are pretty conservative risk wise compared to some of the high risk mutual funds out there. I don't have any involvement with Fidelity other than being a satisfied customer.
http://www.fidelity.com
2007-01-12 22:07:40 · answer #2 · answered by Anonymous · 0⤊ 0⤋
At 25 you have time to experiment and learn with your investments. Depending on who manages your plan, you will have different options....they should explain the relative safety, and the average returns, and exactly what the various funds are invested in.
Generally there will be some kind of balanced fund( invested in various stocks and also bonds) If you put 60% of your money into that, you'll be relatively safe.
Most plans also offer something " international" or "global"... that's where you want to be for the next 5-7 years... put at least 20% there.
Go with two others 10% each......mid-cap, small-cap , growth...
(you're going to own them for soooo long it doesn't make much difference!) Seriously... you will just learn from your quarterly reports what's working for you and what's not....it's only paperwork or a phone call...move it around!!
If you want to try and research the funds available you can go to yahoo/finance or msn/moneycentral and click into "funds"...but I have found that a lot of these 401 plans don't give you "symbols" for the funds they offer and when the "names" are just a little off the "symbol lookup" feature becomes useless.
Good luck....get into it...you work for that money, let it work for you!!...By the way.. contribute AT LEAST as much as your employer will " match" ( usually 3% or 4 %)...and twice that if you can. Try it, you'll get used to it. BEST OF LUCK
2007-01-13 02:51:24 · answer #3 · answered by jebediabartlett 6 · 0⤊ 0⤋
Go with at least medium risk. A mix of med, high is better. You'll get a better return. Even if your 60, you still have a 20 year investment horizon so don't get conservative. You'll only break even on most money markets after accounting for inflation.
2007-01-12 21:57:11 · answer #4 · answered by Sun and Sand 3 · 0⤊ 0⤋
how old are you. If you are over fifty do some bonds, if you are young invest in small caps, growth more aggressive funds. Yahoo fiance has some good info, also check out fool.com
2007-01-12 21:50:13 · answer #5 · answered by Anonymous · 0⤊ 0⤋