401k list of funds. How do you choose?

What is your list of funds? It is a little difficult to offer advice without knowing what the choices are. Unfortunately, some 401k plans have very poor choices.

I do have to say this though. Whatever choice you choose, it should be a better choice than you could have made a year ago.

Do you have a money market choice? If so perhaps 50% in that one for now.

With your paperwork there should be some graphs and such that show long term how each fund has done.

Depending on your age you will want to invest for long term. The longer you have the more risk you may be willing to take for bigger returns.

Now is actually a great time to be investing with the market so low. As long as you are in a stable fund you money will grow rapidly.

Who administer's the fund? They should also have a website that should help educate you.

You want diversification, above all. You need to determine a suitable investment breakdown that includes:

a. Domestic stocks.

b. Foreign stocks.

c. Bonds (fixed income).

If your plan offers a suitable target retirement date fund or balanced fund, that is a good choice. There's lots of info about this on the internet.

First thing you want to do, is set your asset allocation. Within your allocation, you decide how much to put in stocks, bonds, and cash. Then within your stock portion, divide it into large caps, mid caps, small caps, and international.

Here is my asset allocation. Not saying this would be right for you. But think along these lines.

30% large caps

10% mid caps

05% small caps

20% international

25% bonds

10% cash

Now that you've set your asset allocation, then look at the funds available to you to fit the allocation. There are various online asset allocatiors out there. I like the one at cnnmoney.

The most I would say is to go at least 80-90% equities.