I am wondering about 401k options, what are the differences in equity accounts and fixed income accounts?

Question

I have few options to choose from but need to get a distinction of these different types of accounts before making decisions. Any help will be appreciated.

Answer 1

The fixed income accounts are really poor investments for the long term...barely making better returns than a bank account.( Unless you're almost AT retirement age!!)
Equities are the stocks of the different companies here and around the world....you will do much better investing in those accounts..( there will be slow times, and bad times but in the long run, even a conservative fund will get you 8 or 9% on your money....
Most 401 plans are invested in various " mutual funds" , if you go to http://finance.yahoo.com/funds you can get the ratings and performance of most funds your plan has ( sometimes some outfits give their funds cutesie names and you can't really check on them)
....but given a name, you can usually get a " symbol" with the "symbol look-up" link... then put that symbol in the quote box...your options for investigating a fund are on the left...
It's all strange at first...but you can get used to it in a hurry...
http://monetcentral.msn.com/investor/research/fundwelcome.asp?=Funds=1
Another site to check on funds...
Good luck
P.S. If you look back at older questions you'll find that people sometimes throw up a whole list of funds and get various info on them here...another option if you still can't decide
...other things to add: your age? does the plan match?any other IRA's ?

Answer 2

Fixed income: bond fund. Bond funds rarely do well, but they never loose money (although inflation can make them lose worth). Once you are in a boom near retirement, it's best to move into these so when the crash happens, you have preserved your wealth.

Equity in this case means the investment can go up or down. They generally go better than bonds when going up, but they can also go down.

Answer 3

basically equity accounts are stocks (us and international) and fixed income accounts are bonds, tbills, and money markets. You can lose money on both...nothing is completely safe (even cash loses when you consider inflation). But, the general idea between equity and fixed income is that when equities are down, bonds are up...and vice versa. however, bonds don't go as far down or as far up as equities so aren't as volatile.

Answer 4

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