How Do I Manage My Investments?
Like many people, you may have found that your investments have not done very well recently – in fact, you may even be delaying retirement for a couple of years to make up for your losses. If you are in a company 401(k) plan, you may have had typically only ten or twelve funds to choose from, and your year end summary tells you that most of them lost money last year. The much sought diversification didn’t really help when you diversified between funds that all performed badly.
The truth is that a lot of the market performed poorly in this economic crisis, but also that you do not have to put up the lack of choice for ever. While you are working at a company and receiving company matching funds into your 401(k) it makes good sense to stick with that plan. The company’s contribution should easily amount to more than the increase in returns you could achieve by investing in marginally better funds outside the plan.
But when you leave the company and rollover your account, or any time you are saving independently for your retirement, you are free to choose your investments from a wide range of funds and securities. Be warned that if you transfer your 401(k) account into a new company retirement plan, you may restrict your choices again, so it is better if you just open an IRA instead with the funds.
If you are the type who likes to take an interest in your own affairs, you will be delighted with the amount of information that is available online. One of the major websites for financial information is www.morningstar.com. This has details on a wide variety of funds in which you might be interested, and they have even developed their own rating system to show you graphically the type of investment that you are looking at. Although they also have a paid service, you can find out a lot of information about retirement planning for free.
Of course it helps to discuss your findings with an investment advisor who knows your situation, and Ken Himmler (www.kenhimmler.com) has a great deal of experience in helping his clients with their retirement savings. Through his company, Integrated Asset Management (www.iamllc.biz), Ken coaches investors to optimize their investments and achieve financial security.
Authored by Kenneth Himmler, Sr.
