401k Plan Investing

Investing in your company’s 401k plan is one of the best things you can do to get yourself ready for retirement. There are several benefits to taking action on this, the first of which is saving money on a tax deferred basis for your retirement. In addition, even if your company matches 10% of your contributions, you have immediately earned 10% on your investment in your 401k plan.

Since most 401k plans allow you to set aside a certain percentage of your paycheck every month to contribute to your 401k plan, you are essentially Dollar Cost Averaging your investments. The result is that more shares of each mutual fund are purchased when prices are relatively low and less are purchased when prices are relatively high.

One disadvantage to some 401k plans is that you are limited in your investment choices. Another is that you must choose which mutual funds to place your money in on your own. That’s where we come in.

While we started this web site concentrating on Fidelity Mutual Funds or Vanguard Mutual Funds we have found a couple of important facts over time:

1. Asset Allocation is more important in wealth formation than selecting the best manager in an asset class

2. Investors have far fewer fund choices available to them in a 401k Plan than they had only 5 years ago.

Given these facts, our suggestion is that you concentrate on keeping your portfolio in balance by using our portfolio asset allocations as a guide for how you should be allocating your money in your 401k Plan. Since we do the work for you, just set up your contributions to be allocated in the same percentages as our Model Portfolios and you will save the time it takes to research the right choices.

To See Our Choices for Best Performing Mutual Funds for Your 401k Plan Check Out Our Newsletter.