How to invest on my 401k?

Question

I just got a decent job and my company offers 401k. The problem is I have no clue where to invest the money. Below is a list of stock options that my company (GE) offers. If someone could please just guide me a little I would kindly appreciate it.

Strategic Fund ( GSIVX )

Short-Term Fund

GE Stock ( GE )

Mutual Fund ( GESSX )

Index Fund ( VIIIX )

Money Market

Income Fund ( GESLX )

International Fund ( GIEIX )

Small Cap Equity Fund ( GSVIX )

Answer 1

I would be sure to pick up some GE stock at these price levels it has a very attractive dividend yield of 4.5%.  You also need to diversify through large/small cap equities and international funds as well some some bonds (income fund)

Answer 2

First, not sure why GE is listed in there. Assume you are under 25-35 here is your appropriate portfolio breakdown, assuming you don’t mind some risk. Instead of an 80%, 20% split between stocks and bond oriented investments, switch the 20% to what is called DRIPs (Dividend Reinvestment Programs). Companies such as KO, 3M, and GE offer these programs. These programs give you more shares as your dividend instead of a dollar figure. Obviously over time you money grows very fast due to compounding. 10% of your portfolio should be targeted towards speculation (positions you expect either a great return with high levels of risk. 70% (or the remaining part of your portfolio should be in the equity markets) A split between, value and growth oriented funds, international, small cap and large cap. So 20% of the 70% goes to international equities, 20% of the 70% goes to value oriented funds, 20% of the 70% goes to growth oriented funds, 20% of the 70% goes to large cap, and lastly 20% of the 70% goes to small cap. This way you are well diversified. Listen money market accounts should not be a part of your 401K. Money markets are emergency accounts so you don’t have to dip into your 401K in tough times. To accurately allocate from the info you gave above, I would need to see historic returns, expense ratios, fund management records. Take my advice and apply it to your options.

Good Luck!

Answer 3

I would go with the funds.   Small Cap, Income, Index and Mutual  A 401k is a long term investment.

Answer 4

I would prefer Index and International funds.  Just check a prospectus and make sure they have a history of decent returns before you invest, and make sure they are well diversified.

I would avoid buying company stock, "don't put all your eggs in one basket."