How Do I Choose Investments for My 401(k)?

Sep 10, 2014

In this series of Tips from the Pros, MONEY taps the collective wisdom of expert financial planners.

If you have a 401(k) and you are looking at what stocks and bonds you should be investing in for your plan, here are some tips to help guide you.

Low cost investments & Broad diversification. Financial advisers suggest that you look at the world market when you invest. Just don't look to closely at how stocks and bonds have performed in the past to guide your decisions. Be smart and look ahead.

Calculate risk. If you are younger, then you can probably afford to take more risk because you have some time to recoup any losses you suffer. If you are closer to retirement age, you might want to scale back on the risk so you don't damage your savings too much.

Set it and forget it. If you are closer to retirement age, a target retirement date fund might be the best course of action for you. This fund allows you the broad diversification in the global market, but with low risk and higher yields. It requires very little handling after you set it up and will work for you until you retire.

Featured Advisers:

Erika Safran Safran Wealth Advisors

Benjamin Sullivan Palisades Hudson Financial Group

Gail Linn MetLife Financial Group of New York

All products and services featured are based solely on editorial selection. MONEY may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions