5 Basic 401k Investing strategies to get higher returns in your 401k plan. Learn how to pick 401k Investments. 401K (Retirement Investing)

[401K Retirement Investing] Basics of 4 01k Investing. 5 Basic 401k Investing Strategies. In 2017 It has never been more important for us to learn how to invest than now.In order for us to retire in the future we have to learn to invest our money to the best of our ability through a combination of 401K and other investments.

1. Discover Your Fund Choices: (Step 1)

Find out what investment choices are offered in your current employer’s plan. The fund choices, and number of available choices to choose from are going to vary from company to company. If you do not know what is offered ask your human resource department where you can find this information, and what provider they use.

Examples of 401k plan providers include John Hancock, Vanguard, and Fidelity to name a few.

Typically your provider will have an account you can access online where you can manage your 401K investments, research rate of return, fund choices etc. Log in, or create an account online to begin to perform your analysis.

The analysis may take you a few hours depending on the volume of funds you want to look at so you might consider breaking up your research into one hour blocks so you do not get burnt out.

2. Select the Criteria of the Funds You Want to Analyze (Step 2)

My 401k plan has roughly 60 investment choices. Yours may have less, or it may have significantly more, it all depends. If you have more than 100 choices I would consider selecting criteria important to you so your analysis will not consume your life. Here are examples of criteria you may want to consider to cut down on the number of funds you are going to look at:

– Rate of return over last 5 years, and last 10 years. (Example: Look
at funds that have the highest 5 – 10 return on investment)
– Fee ratios
– Are you more of a risk taker, or more conservative?

As you go through this process make sure you are writing down the fund names and ticker symbols as you go. If you can extract the data to excel that may be your best bet to save the most time.

Example: Fund Name: Fidelity Contra Fund: Ticker Symbol FCNTX.

I would highly suggest using Microsoft Excel. If you do not have excel considering using a binder or notebook so you can keep your notes easily organized.

3. Learn About the Funds (Step 3)

It is always hard for me to believe that so many people do not know what they are investing in when it comes to their retirement account, but they know so much about sports, or their favorite reality T.V. show. Generally speaking….through your 401K provider’s website you should be able to read about the funds online. I personally look at the following things:

– Top Holdings (What stocks make up this mutual fund?)
– Are the individual stocks in this mutual fund companies I would want to own?
– What is this funds long term track record, how long has the fund be around? I usually like to invest in something that has been around close to ten years or more.
– What is the expense ratio?
– How Risky is the fund?

Take notes as you go so you do not have to redo the work later.

If a financial advisor regularly comes to your company to give market updates try to meet with him (or her) to learn more about your retirement plan funds. The advisor should know these funds very well, and should be able to help guide you in this area. This does not mean you should avoid doing the research. If you have done your research ahead of time you can get their opinion on what you are thinking of investing in.

4. Utilize Free Resources such as Yahoo Finance to Aid You in the Research Process (Step 4)

Yahoo Finance is one of the most simple investment websites you can use to do additional research on your provider’s funds. In my particular plan the thing it was missing was stock charts.

I wanted to visually see how the fund was performing, and so I went to Yahoo Finance to do my research. If you cannot see the chart performance on your mutual fund I would highly, highly recommend taking the time to do this step.

Generally speaking you want to see a slow and steady increase in fund price over a long period of time. I’m looking for stable long-term growth for last 10 years, or more.

5. Choose Investments or Reallocate Your Current Investments (Step 5)

Time to take action!

Links:

Investopedia 401K Basics:

How to select 401K Investments:

Follow me on Facebook:

Follow me on Twitter:
@Mkchip123

Crushin by Audionautix is licensed under a Creative Commons Attribution license (
Artist: …(read more)

LEARN MORE ABOUT: IRA Accounts

INVESTING IN A GOLD IRA: Gold IRA Account

INVESTING IN A SILVER IRA: Silver IRA Account

REVEALED: Best Gold Backed IRA

If you are new to the world of investing, the idea of putting money into a 401k plan may seem daunting. However, 401K investing is an important way to save for retirement and can be an effective way to grow your wealth over time. In this two-part series, we will delve into the basics of 401K investing and some strategies to help you make the most of your retirement savings.

The Basics of 401K Investing

A 401k plan is a retirement savings account sponsored by an employer. Employees can contribute a portion of their salary to their 401k account, and in some cases, employers may also contribute to the account on behalf of their employees. The money in the 401k account is invested in a variety of securities, such as stocks, bonds, and mutual funds, with the goal of generating a return on investment over time.

One of the key advantages of a 401k plan is that contributions are typically made on a pre-tax basis, meaning that the money is deducted from your paycheck before taxes are taken out. This can lower your taxable income, which can lead to significant tax savings in the long run. Additionally, the money in a 401k account grows tax-deferred, which means that you won’t pay taxes on the investment gains until you start making withdrawals in retirement.

401K Investing Strategies

Now that you understand the basics of 401K investing, let’s explore some strategies to help you make the most of your retirement savings:

1. Start Early and Contribute Regularly: One of the most powerful strategies for building wealth in a 401k account is to start contributing as early as possible and to consistently contribute a portion of your salary. The power of compounding can significantly increase the value of your investments over time, so the earlier you start, the better.

2. Diversify Your Investments: Diversification is an important strategy for managing risk in a 401k account. By investing in a mix of different asset classes, such as stocks, bonds, and cash, you can spread out your risk and potentially increase your long-term returns.

3. Take Advantage of Employer Matching: If your employer offers a matching contribution to your 401k account, be sure to take full advantage of this benefit. Employer matching is essentially free money that can significantly boost the value of your retirement savings.

4. Rebalance Your Portfolio Regularly: Over time, the value of your investments may shift, causing your portfolio to become unbalanced. To maintain an appropriate level of risk in your 401k account, it’s important to periodically review and rebalance your portfolio.

In the second part of this series, we will delve into more advanced 401K investing strategies that can help you maximize your retirement savings. In the meantime, consider speaking with a financial advisor to get personalized guidance on the best way to invest in your 401k account.