Help Setting up 401k

[luckyluchiano]

Ok my company matches up to 6% so I`m putting in 6% each pay period. Do you guys reccomend just investing in the Highest Risk Stock Option, or diversifying the portfolio and spreading it out among stuff?

 

[hizzle]

It depends on your age and what you're comfortable with. Personally, if I'm in my young 20s, I'd put it all in a fund that mimics the S&P 500.

 

[jusdre86]

in my personal opinion, i wouldnt choose the highest risk because for some reason (in my own 401k) they don't bring the highest return. They definitely let you look at the past performance of that option, and if you look it probably doesn't have the highest return. What i did was to pick the option before highest risk.

 

[luckyluchiano]

Originally Posted by jusdre86

in my personal opinion, i wouldnt choose the highest risk because for some reason (in my own 401k) they don't bring the highest return. They definitely let you look at the past performance of that option, and if you look it probably doesn't have the highest return. What i did was to pick the option before highest risk.

I`m 22. They had the return rates and the one I picked had an overall 10% higher return than the others.

 

[toy collector123]

I just turned 22 and I put all mine in high-risk international funds. Doing much better than all these other mimics and gimmicks.
But i'm going to pull all my money out of a 401k. smh 

 

[troymcclure]

I am also 22 I have about 3 grand to play with. Looking to invest and not sure what to do with it. My father told me to look into a mutual fund - S&P 500 but i've read that 85% of the time it does not beat the market and to go the Index way?

 

[luckyluchiano]

Originally Posted by Toy Collector123

I just turned 22 and I put all mine in high-risk international funds. Doing much better than all these other mimics and gimmicks.
But i'm going to pull all my money out of a 401k. smh 

so you think 401k is a sham?

If I understand correct the only money I can lose is whats being matched by my company??

 

[jusdre86]

Originally Posted by LuckyLuchiano

Originally Posted by jusdre86

in my personal opinion, i wouldnt choose the highest risk because for some reason (in my own 401k) they don't bring the highest return. They definitely let you look at the past performance of that option, and if you look it probably doesn't have the highest return. What i did was to pick the option before highest risk.

I`m 22. They had the return rates and the one I picked had an overall 10% higher return than the others.

my bad bro, proceed then
  

 

[blazinbama]

Originally Posted by LuckyLuchiano

Originally Posted by Toy Collector123

I just turned 22 and I put all mine in high-risk international funds. Doing much better than all these other mimics and gimmicks.
But i'm going to pull all my money out of a 401k. smh 

so you think 401k is a sham?

If I understand correct the only money I can lose is whats being matched by my company??

I mean you can lose money if the stock market goes down the entire time you hold funds but the likelihood of that is probably zero.  Putting in 6% is smart, them matching is essentially like adding 6% to your salary.  I'd recommend a Target Retirement 2040 or 2050 fund if they offer it.  It diversifies for you and will become more conservative the closer you are to retirement.  Who do you guys have it through like Vanguard or something?

 

[idealapotheosis]

Who's your 401k vendor?Vanguard? Fidelity? Do they offer you only specific funds (A lot of smaller investors only offer you crappy funds to select from)? I'm lucky and have an employer that offers good vendors. I use Vanguard because of their low cost funds. Watch the expense ratios as they will eat your gains if you get one with a high expense ratio.

I personally am a fan of  Vanguard's "target retirement funds". They start aggressive and automatically adjust to be more conservative as you approach your selected retirement rate. As close to "set it and forget it" as you can get. Google and read about them. Fidelity's spartan funds follow the same methodology. Something that mimics the S&P500 market is fine if you are just starting out, but you will want to diversify.

Good luck my friend! Remember go in with a mindset of getting free money from your employer and saving for retirement and not with a mindset that I'm going to make a bunch of cash and can spend it.

 

[luckyluchiano]

We use Fidelity, they had a 2050 but I picked 2055 cause the avg returns was listed as higher.

 

[crcballer55]

Pick funds with a 10+ yr. track record.  Sure, you can find many high return funds that just opened, but they haven't shown a trend yet and the returns could just be a fluke.  If you picked a housing index in 2007 based on past performance, you would be completely screwed right now!  All my funds have a 10+ yr. track record with double digit returns.  To diversity internationally, I chose a Latin America fund that has performed very well over the past 15 years.

If you don't know much about investing, pick a target date fund for now to get your foot in the door.  Once you have gained some knowledge, start buying other funds and keep going.