Where should I invest 401K funds in '06?  Co. Stock, international, global growth, small cap, large cap funds?
155252
me...invest it in me!
600478
The answer to this depends on what you will need the money for, and when you'll need it. If it's anything over 10 years (ie retirement, kids' college education, saving for that vacation home, etc), equities-based investments are the way to go. Long term, they've average an 11% return, compared to 6.8% for real estate, 5% for bonds, and 2.5% for cash investments. Of course, stocks are a lot more volatile than most other kinds of investments (excepting commodities, of course), so short-term, a mostly-stock portfolio is a no-go.\n\nIndividual stocks are usually way too risky to even bother with, to be even more forthcoming. In 2000, you could have invested in the #1 energy company in the U.S., or the #2 phone company. What could have been more stable than a couple of leading utilities? Ask the shareholders of Enron and Worldcom, respectively. No, a far smarter, and safer, way to get that needed equity exposure is through high-quality mutual funds. I'm not talking the junky tech-bombs that exploded on the scene the late 90's. I'm talking about quality funds that own quality stocks, and have a quality track record to back it up.\n\nNo matter what route you go with, the most important thing is to DIVERSIFY. Diversify, diversify, diversify. I can't say it enough. A good rule of thumb for most people is that your age should be the percentage you are in fixed income investments, like bonds, CDs, and cash. Thus, the older you get, the more conservative you'll become. Of course, your individual risk tolerance will vary.\n\nAssuming you are 25, a sample portfolio like the following will be sufficient:\n\n20% Large-cap stocks\n20% Mid/small cap stocks\n20% International stocks\n5% Real Estate Investments\n5% Commodities\n5% Precious Metals\n10% Government bonds\n10% Corporate Bonds\n5% International bonds\n\nAs daunting as that may or may not look, it can be achieved very easily through just a few mutual funds. Consult a financial advisor, or do the research yourself if you have the time, tools, and talent. Oh, and the discipline. That's probably the #1 reason people go to financial advisors: they realize they don't have the discipline to stick with a plan on their own.\n\nA portfolio like the one above should average 8-10% annually, or better. They key is that all the different asset calsses behave differently when the same economic event happens, like, say, interest rates risiin, or a war starting in Bulgaria. Stocks behave differently than bonds, which behave differently than commodities, which behave differently tha real estate, etc.\n\nThis sort of portfolio should average 8-12% per year, so just split the difference and say 10%. Will it do 10% EVERY year? Of course not. I'd be surprised if it ever did EXACTLY 10%. That's an annual average. Using the "Rule of 72", where you divide the number 72 by your return % to see how often your money will double, we see that if this portfolio is earning 10%, it will double every 7.2 years. Compare that to a money market earning 2%, which will double every 36 years!\n\nSo, in 7 years you should have about $140,000\nin 14 years you should have about $280,000\nin 21 years you should have about $560,000\nin 28 years you should have about $1,120,000\nin 35 years you should have about $2,240,000\nin 42 years you should have about $4,480,000\nin 49 years you should have about $8,960,000\nin 56 years you should have about $17,920,000\nand on and on and on....\n\nOf course, if you keep adding money in, say $100 a month, you'll become a millionaire MUCH sooner. The key is discipline, and sticking in when markets are up OR down. Don't try to time the market--you'll NEVER get it right.\n\nHope this helps!\n--J.
350599
Suzanne,\n\nLets take it from the basics. As you have already been told by many. The 401k varies per company policy. But most companies match 4% of the money you invest. So at minimum you want to invest the same percentage of your salary the company matches. Reason being the company will be matching 100% of your investment. \nNow the 401k will consist of different funds such as stock, mutual, commodoties, fixed income, etc ... You upon enrollment will have to decide how you want to allocate your 4%(persay) of your salary amongst each fund. So lets say you invest 4% = 200$(of your salary), you would have to allocate 100% of the 200$ plus the company match into the funds. For example 10% fundA, 10% fundb, 80% fundc. \nPrior to investing in any fund do some research, each 401k plan will have history relating to each funds performance since it was created. Look for the best performers and choose wisely. Wisely meaning how aggressive or passive you want to invest. Each method involving Risk, Risk meaning your can earn alot and lose alot in short or long periods of time invested.\nYour 401k plan will have historical investments plans already in place for you to follow if it fits your lifestyle.\nLifestyle, now this is the most important detail for you to think about. As you know from what we talked about you can invest the minimum or the maximum. Maximum being I think 15% or 13,000$ per year of salary. (Inquire, I am just taking a guess here)But anyways, depending on how much your salary is a year your investment can change your lifestyle tremendously. But by matching the minimum your making 100% of your investment with company match. Anything more than that and your saving without company match, but making more  on your investment than if you would put that money into a savings bank account for the long term. \nWith that in mind I would suggest you and your family if any sit down with a financial planner to give you other options on how to save your excess money (if you have more to invest over the company match) amongst other options such as IRAs, CDs, etc... This taking into account after you have agreed upon what kind of lifestyle you want to live.   \nThe final outlook is this ... Your company is giving you free money for savings in the future. FREE MONEY. Nothing beats that unless you win the lottery.\nGood luck...
470406
As much as you don't like the bank...some might belong there. Take a look at various mutual funds...think about what sort of areas YOU think are growing in the US and in the world right now. Think China and other countries in Asia will be growing quickly over the next 5 to 10 years? Maybe put 1000 or 1500 in an Asian fund. Think telecom will be important? Put some in a telecom fund. Health care? Same thing. But I would also recommend putting a little in the bank...it'll give you a little cushion and might help pay down any credit cards or car loans you might have outstanding....
622216
This is absolutely not your best option!!! TRUST ME, I KNOW!!! Mutual funds are always the way to go but if you are looking to make your money grow fast....invest in CHEESE. The 2nd richest man next to Bill Gates is a cheese man. last year their stocks split almost 2 a month. I did and by the end of last year I was very very wealthy!!!! I'm 26 and finacially have the resources to retire and live comfortably until I'm 85 and never work another day in my life. AINT LIFE GRAND!!!!!
288141
Buy a good S&P index fund. Vanguard has a good one with lows fees.  Should get you 8-10% a year over the long run.
316544
Don't use any answer in this forum to go by.  \n\nThey don't know you & they don't know your goals. You didn't identify what your time horizon is (ie: buy a car next year or retire in 35 years).  You haven't identifed your risk tolorence. What's your investment experiance level?\n\nWithout these "basics" no one can suggest anything that's really good for you!\n\nGood luck
473492
Since you are a beginner and have about $5000, the simplest way is with a mutual fund. \n\nStart at Yahoo, fund screener. \n\nKey in your parameters: $5,000, moringstar rating of 5, turnover less than 100%, expenses less than 1.0% and see what pops up. You will find funds with impressive historical results. Unfortunately, the past is not a great predictor of the future. But this is a good place to start\nOr visit Vanguard.com and key in your investment criteria and they will tell you wich funds they have meet your criteria. \n\nThe link below will show you the results for international stock funds.
344464
The Target Retirement Funds are a "one size fits all" approach, and not everyone has the same risk tolerance.  If you are sure you can stomach the volatility of 100% stocks then invest in 100% stocks for retirement.  I would suggest about 20% or so foreign stocks, for a slight decrease in your volatility.  If you have some money outside an IRA invest some of that portion in foreign stocks for the Foreign dividend tax credit.  Note that the Target Retirement funds invest ~20% in foreign stocks, but they can't offer the foreign tax credit because of the way they are structured.\n\nIf you are investing solely for retirement, 100% stocks may be a good idea.  Remember to fund other goals, like a rainy day fund for when you lose your job.  (It happens to the best.) Layoffs are most likely when the economy and stock market are down.   You also need to save for a down payment on a house.  Do you want to delay buying a house because the market is down 50%?\n\nThere is no magic age at which you have to start converting to bonds.  Off the top of my head, I would suggest 20-30 years before retirement.\n\nBefore investing in 100% stocks take their quiz to see if you have the stomach:
195053
You should put in at least as much as you need to in order to receive your company's match.  If you put in less than, then you're walking away from "free" money.  Anything over that amount is a personal investment decision.  My old company had a terrible 401(k) program with few, and mostly bad, investment options.  I put in enough to get my company match, and then put more money into an IRA.  My current company has a great matching program, and terrific investment options, so I'm maxing out my contribution.  \n\nThe short answer is put away as much as you can.  The longer it sits in an investment that's growing, the more money you'll have at the end.
164845
I own and recommend the following mutual funds without hesitation to anyone, for any situation and length of time. These are the first funds in which I invested, and I've owned them all for 3.5 to 4 years. I have ranked them from highest to lowest 3 year return.\n\nBUFSX\nCAAPX\nMVALX\nDODBX\nOAKBX\n\nI advise you to do your own research and comparisons at Morningstar.com.
621405
There's nothing WRONG with an ETF for retirement investing, but you need to evaluate what it is that you're trying to achieve.  Different ETF's have different purposes, and you may need advice in selecting the right one.  Also, you might find that other funds, particularly no-load funds, might be a better option for a 401-k type of retirement account.  And, if you're investing your IRA money, you can just as well invest in individual stocks.  All of this requires either professional advice or more research on your part.  There's no way that anyone can give you an absolute yes or no answer with the limited information that's been provided.
517192
Buy a diversified series of mutual funds. Individual stocks are just way too risky in most cases, especially for novice investors, even if they look like a sure thing.  How are Enron and Worldcom doing right now?\n\nMake sure you hit all the assets classes, like Large cap stocks, small/mid cap stocks, international stocks, emerging markets stocks, government debt, corporate debt, hi-yield debt, foreign debt, emerging markets debt, real estate, commodities, and precious metals. That's 12 categories right there, so let's say you get started with with $1200, you're talking about $100 each. \n\nThen sit back and rebalance each year, back to your original percentages. This is called asset allocation. The thinking being, what's BEEN hot is more than likely not going to STAY hot. All markets, after all, are cyclical.  This is why people who invest their 401(k) by just putting in whatever's had the most recent best numbers never get anywhere--they're investig in something that DID will and IS probably NOT doing well.\n\nThis sort of portfolio should average 8-12% per year, so just split the difference and say 10%. Will it do 10% EVERY year? Of course not. I'd be surprised if it ever did EXACTLY 10%. That's an annual average. With that average, your money should double roughly every 7 years. \nSo, in 7 years you should have about $2,000\nin 14 years you should have about $4,000\nin 21 years you should have about $8,000\nin 28 years you should have about $16,000\nin 35 years you should have about $32,000\nin 42 years you should have about $64,000\nin 49 years you should have about $128,000\nin 56 years you should have about $256,000\nin 63 years you should have about $512,000\nin 70 years you should have about $1,024,000!\n\nOf course, if you keep adding money in, say $100 a month, you'll become a millionaire MUCH sooner. The key is discipline, and sticking in when markets are up OR down. Don't try to time the market--you'll NEVER get it right.\n\nHere's a handy formula:\n\n$100/month x 12% retutn x 20 years = $100,000.  \n\nSo if you invest $300 a month, you can expect to have $300,000 or so in 20 years, depending on what return you get.  And remember, even if you stop there, that money itself will double again in 7-10 years, depending.  Then double again.  Then double again.  You get the idea.\n\nIn short, you can make a HELL of a lot of money, with a small output on your part, if you do it right, and are patient.\n\nOh, and if you qualify, and do this all in a Roth IRA? Then every penny will be 100% TAX-FREE. That's a deal that's too good to pass up. That's why I tell all my under-30 clients--if you make under $90,000, and therefore qualify to do a Roth, you'd be a fool not to. Just having the power of youth (and therefore time) on your side is such an advantage, to squander it would be such a waste!\n\nHope this helps!\n--J.\n\nP.S. The previous answerer's advice about contacting Edward Jones is gold.  I would go to their website at www.edwardjones.com, enter your zip code, and find the closest office to you.  Chances are there's one within 10 miles.  They have 10,000 office in the US, UK, and Canada.  And they will take care of you right if you decide you don't want to go it alone.
916421
Here is the page to go to to find mid-cap funds on Yahoo.  Scroll down the category page until you find mid-cap.  They have a selection for mid-cap value, mid-cap growth, and mid-cap blend.  To select the ones with the best record,  select morningstar 4 star or better.  To select the ones that are no load, select no load under front load.  \n\nhttp://screen.yahoo.com/funds.html\n\nYou will find several pages of them.  Study several of them to learn more about picking mutual funds.  It will come in very handy during your life.
630556
You definitely want to roll it over to a self-directed IRA, where you'll be able to invest in stocks, bonds, mutual funds, annuities, and yes, even CDs.  Stay away from the bank, their idea of a good return on an IRA is a 5% CD. No one under 55 should ever have CD's in their IRA, it's a waste of both your age (which can be a powerful weapon) and the IRA's tax-deferred status.  CDs are for much older people, or for money that needs to remain somewhat liquid--which is something IRA money does not.\n\nDespite Scuhbby's inane assertion that the average mutual fund does 16-30% (no, the average mutual fund loses money), mutual funds are absolutely the way to go.  Pick a broadly diversifed mix of assets classes, cover all your bases, and remember to rebalance every year.  A financial advisor might be able to help you with this, but if you have the tools, talent, and time to do it yourself, go for it.  And oh yeah, the discipline, which is the most important.\n\nMake sure you hit all the asset classes, such as large-, mid- and small-cap stocks, international stocks, investment grade and hi-yield debt, foreign debt, commodities, real estate, and precious metals.  Come up with a mix you're comfortable with, and sit back.  A properly allocated diversified portfolio will average 8-12% return per year, on average, and you'll be able to take advantage of the IRA's tax-deferred status.\n\nMOST IMPORTANT, if you qualify income-level wise, IMMEDIATELY look into converting your IRA (once you've rolled over the 401k) to a ROTH IRA.  Thus, not only will your preserve your tax-exempt status year-to-year, you'll also ensure all future earnings will be 100% TAX-FREE.  Even a normal IRA/401k requires you to pay taxes when you take distributions.  Converting could have some current year tax consequences, so consult a financial advisor for your specifics, but in nearly every case I have found it to be worth it.\n\nHope this helps!\n--J.
60838
With $200 dollars a month, you might want to sign up for a 401k plan from an online brokerage firm while picking one or two mutual funds.  As long as you consistently deposit the amount of $200 dollars, you should realize a relatively fair or modest return.  It will also reduce your taxable income, saving you money on taxes and increasing your future retirement funds.  \n\nHowever, if you're looking for a higher return investment, allocate it to a money market ING Direct account.  I believe their offering 4.75%, which is a modest return but it offers you greater liquidity.  After a year, you might then swap it into a brokerage account and then invest it in growth stocks that can generate a higher return.
782690
Mutual funds are appropriate for some and the wrong investment for a growing number of people.\n\nFor me, I would NOT invest in mutual funds if it weren't for having a 401K. \n\nOverall, Mutual funds are not good (once you're educated in investing) and many people should not invest in mutual funds unless you have to (like if it were a requirement in a 401K).\n\nHere's why.\n\nFirst of all, mutual funds exist to take average person's money.\n\nSecond, mutual funds seem to be "happy" just to do better than the S&P index, since that's often the gauge. A monkey, yes monkey, can usually outpick most mutual funds. Over 60% of the mutual funds out there can't even outperform the market (CNBC just reported the current # was 72%). That's VERY SAD!\n\nThird, mutual funds have embedded management fees in their costs. Most of these mgmt fees are 0.5% to 2% annually.\n\nFourth, most mutual funds exist not to earn you a lot of money, but are more interested in NOT "losing" you lots of money. That way you stay with them and they continue to collect their fees.\n\nFifth, mutual funds are not as liquid as one might think. If you're in mutual funds and a Bush talks in the morning and you call your broker to sell because the market is now tanking, the broker will gladly take your order, but the order will not be executed until the day is over and the negative impact is already priced into the fund.\n\nSixth, many mutual funds charge extra "fees" if you buy/sell their fund within a certain amount of time, meaning you must keep your money in the fund 90 days to 2 yrs before you're free from the fees (read the fine print on trying to get a withdrawal). These fees can be up to 3% or so of your money as well.\n\nSeventh, mutual funds have to be in the market. So if the market is crashing or going down like it has between May and now, then the funds still have to be in the market and taking those losses too. With some practice, you can time your monies to avoid some of those losses (it'll take practice).\n\nConvinced yet? Need more? \n\nEighth, mutual funds have to be pretty diversified and so if there are hot and cold sectors, they are probably in both the hot sectors and cold sectors. However, as an investor, you can buy into just the sectors you want, like metals, or housing, or energy, etc. or right now, Brokers/Dealers, Retail, and insurance!\n\nNinth, mutual funds are so big, they can only invest in certain companies. A small mutual fund with $10 billion in assets. 1% of that money is $100 million. How many companies are this big where $100 million investment isn't the whole company? Do you want to limit yourself to just those larger companies like Times Warner, Microsoft, home depot, cisco, ebay which have been sideways for years? I think not.\n\nA better way would be to buy ETFs (exchange traded funds) or holders. These trade like stocks, so are very liquid, and do not have the high fees like the mutual funds. Further, you can buy/sell them as you wish. They represent sectors or indexes, so buying them gives you the same diversification as the sector/industry/index, but with much less overhead!\n\nSee Amex.com (american stock exchange) or ishares.com, holders.com for more info. \n\n\nYou need to invest for yourself. If you can't, then sure, use mutual funds. But be aware of the shortcomings (and as you can see, there are many). \n\nLet me know if you have further questions. \n\nBest of luck!