With these 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 when you retire, and without a long-term investment strategy for asset management you might lose control of your retirement nest egg like an incredible number of other Americans have.
In an average, traditional 401k plan asset management basically amounts to picking mutual funds to invest in. The procedure is known as asset allocation and most of your investment options are either stocks funds, bond funds, or balanced funds which are a variety of both. An average plan includes “safe” options just like a money market fund or stable account that simply pays interest as well. In putting together an investment strategy the best investment portfolio will include all three of those 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 individual best investment strategy or best investment mix (asset allocation) will depend on what degree of risk you’re prepared to accept. For all of the people all of the time, these middle-of-the-road strategy of asset management did well. Keep 1 / 2 of your investment assets in stock funds with another half evenly split between bond funds and a money market fund or stable account. This way your investment portfolio risk is moderate, and your long-term returns must be respectable.
The important thing is to KEEP your money invested in this proportion over time scbam. Review your asset allocation or mix at least one time annually to keep on track with 50% in stock funds and 25% in each of the other two. Move money around to rebalance to these levels when the numbers get free from line. This may happen because each investment category will perform differently. Using this method you can keep risk in order at an average level.
Now, what’s your absolute best investment strategy to prevent premature taxes and penalties; and to keep your money working once you change employers? Simply execute a direct rollover with your 401k money going directly into a mutual fund IRA with a significant no-load fund company like Fidelity or Vanguard… every time you leave an employer where you’d retirement assets. This way you can consolidate your retirement nest egg in a single place and simplify your future asset management task.
Other advantages include low-cost investing, a broad collection of funds to choose from, and good service at no charge. With a toll-free call something rep will walk you through the method to assist you set things up, and help is available once you need it. This IRA is going to be your retirement nest egg where the best investment strategy and asset management discussed before can do the job throughout retirement. As you get older you simply 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 together helping them to attain their financial goals.