What is a good way to invest your 401K to maximize your profits?

Question

My husband has a 401K plan that is worth a good chunk of change. He wants me to invest it to see if we can make more of a profit. Right now its invested in stocks and we're losing money!! I have little knowledge of the stock market or what is a good interst rate for a savings account. With our economy going to sh*t we are hoping for something with a quick turn around time. Prices are on the rise, but our paychecks remain the same. Any ideas?

Answer 1

Hi Bobbie Jo, my recommendation to you is to diversify your portfolio by investing in all areas of the market (Stocks and Bonds).  If you are familiar with the MorningStar style boxes (large cap growth, large cap value, mid cap growth, etc).  Also you want to invest overseas as well using International funds or broad market index funds.  Don't stop investing due to a down market, continue or increase your regular investments that way when the market does eventually go up again you will benefit from having more money in the market.  Your allocation to each style box is dependent on your risk profile.  Most people think they like to take higher risks with their money to get a higher reward but, in reality that is ususally a misplaced idea and especially with retirement accounts like a 401k or IRA.  You need to be a little more conservative with these accounts in my opinion because you cannot replace money that you loose like you can with a non-retirement account because there are restrictions on how much you can put in each year.  Since retirement accounts have great tax advantages and potentially matching contributions from your employer you need to protect that advantage.

Answer 2

Give your money to Jesus. 2012 is near