With the following best investment strategy managing your 401k or IRA investment assets can be greatly simplified both now and in the future. You’ll likely change jobs before you retire, and without a long-term investment technique for asset management you may lose control of your retirement nest egg like millions of other Americans have.
In an average, traditional 401k plan asset management basically amounts to picking mutual funds to invest in. The procedure is called asset allocation and most of your investment choices are either stocks funds, bond funds, or balanced funds which are a mix of both. An average plan includes “safe” options such as for instance a money market fund or stable account that simply pays interest as well. In assembling an investment strategy the best investment portfolio will include all three of these asset classes or fund types: stock funds for growth, bond funds for higher income, and a money market or stable fund for interest income and safety.
Your personal best investment strategy or best investment mix (asset allocation) will depend on what amount of risk you’re prepared to accept. For all the people all the time, the following middle-of-the-road strategy of asset management spent some time working well. Keep 50% of your investment assets in stock funds with the other half evenly split between bond funds and a money market fund or stable account. In this manner your investment portfolio risk is moderate, and your long-term returns must be respectable.
The important thing is to KEEP your cash invested in this proportion over time scbam. Review your asset allocation or mix at least one time per year to keep on track with 50% in stock funds and 25% in all the other two. Move money around to rebalance to these levels when the numbers get free from line. This will happen because each investment category will perform differently. As a result you can keep risk in order at a moderate level.
Now, what’s your absolute best investment strategy in order to avoid premature taxes and penalties; and to keep your cash working once you change employers? Simply execute a direct rollover with your 401k money going straight into a mutual fund IRA with a major no-load fund company like Fidelity or Vanguard… everytime you leave an employer where you had retirement assets. In this manner you can consolidate your retirement nest egg in one place and simplify your future asset management task.
Other advantages include low-cost investing, a broad collection of funds to select from, and good service at no charge. With a toll-free call a service rep will walk you through the process to help you set things up, and help can be acquired once you need it. This IRA is likely to be your retirement nest egg where the best investment strategy and asset management discussed before can do the job throughout retirement. As you obtain older you only change your investment mix to favor bond funds and money market funds vs. stock funds for less risk and more income in retirement.
A retired financial planner, James Leitz comes with an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to attain their financial goals.