My 401K????

Question

Here is the deal, I am 37 and never started investing until a few months ago with the new job I started here in Vegas with MGM, they match 50% and I am only contributing 4% of my $25,000 salary. I first signed up with a (Conservative Allocation Fund MACJX) but after talking with a few people I changed it to the (Aggressive Allocation Fund MAALX)...I guess it is a large growth pre-mixed selection of mutual funds, just not sure if I made the wise choice? Any help would be appreciated!!

Answer 1

If you are feeling uncomfortable with this decision, then maybe you should switch to a moderate or low risk investment. You'll still earn money, it just won't be as much. It's your money and your future. You need to do what's best for you.

If I had to chose then I would say:
Based on your age and the fact that you just started investing in a 401(k), it would be best to go with an aggressive investment. This will make your money grow faster; however the flip side to this is, you can also lose money faster. Aggressive investments tend to involve risky stocks...if these stocks do well, then you'll make lots of money. If these stocks don't do well, then you'll lose money.

In the end, you need to chose an investment that you are comfortable with. Don't listen to anyone else...Listen to your gut.

Answer 2

Learn "Asset Allocation" and apply a mixture that's best for you.

It should include;
Large Cap Stocks
Mid Cap and Small Cap Stocks
International Stocks
Reits
Bonds

What ever you do..... don't take advice from "friends". Chances are... they only know a little more than you.
An "aggressive" mutual fund is a good choice, but I'd keep it to no more than 15% of my investable assets. They tend to perform a little better than Growth Funds over the long haul. It just may not be worth the risk to have 100% of your money in it.

Answer 3

If you are just starting out it is not a good idea too start with something really aggressive, you should rather try something in the middle of the road like fixed income or dividend fund which invests in blue chip stocks.
Old adage is do not put all the eggs in one basket so you might want to try to diversiy pu some in aggressive and put some in conservative to middle to hedge the risk.
PS. If they are matching put the maximum.
Hope this helps

Answer 4

At your age, put 80% of your investments into the Agressive fund and 20% into the Conservative fund. Keep it like that until you're about 15 years from retirement.

Answer 5

At 37, being more aggressive makes sense. As you get 10 years or so from retirement, go more conservative.