Question:

In my retirement fund I have choices on which indexes to put money in...please help?

by  |  earlier

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Right now i have 77% in Government Securities and 22% in the International Stock index.

My other options are:

Fixed Income Index

Common Stock Index

Small Cap Stock Index

I think I should diversify....what do you think? I'm very new to the whole managing my finances thing. Please help...and please explain yourself to because I really want to learn.

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1 ANSWERS


  1. It all depends on how much risk you are willing to accept.  A more balanced portfolio would be:

    Common Stock Index     20%

    Small Cap Stock Index     20%

    International Stock Index     10%

    Government Securities     30%

    Fixed Income Index     20%

    Stocks and bonds (Gov Sec) frequently react in opposite directions.  If one is going up the other is going down.  Also, US Stocks and International Stocks don't always react in unison either.  The Fixed Income Index is a more stable investment, but it is also the one with the lowest potential return.

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