401k Investments: Should You Choose or Let a Professional?
 
401k Investments: Should You Choose or Let a Professional?

401k plans are retirement plans designed to supplement pensions and social security. They are funded through employee payroll deductions. An employer has the ability to match all or a percentage of funds contributed. The money is then invested for long-term success. Most individuals opt for bonds, stocks, or a combination of the two.

If you are just creating your 401k plan or if you are now just realizing the importance of yours, a question may arise. That question is whom do I let handle the decision-making. Unlike Social Security and pensions, you, the employee are in control. Your employer may limit some of your investment opportunities, but you always have choices.

The problem comes from financial experts. For larger corporations, especially where unions are involved, there is usually financial experts and advisors on hand. These individuals can help you make the right investment choices, but some do all the work. The employee, which would be you, still has to sign off on the investments, but many don't give it any thought. This is common with those in their 20s and 30s. They are not typically concerned about retirement yet, but do agree it is a good idea to start saving.

Relying on a financial expert was once concerned a safe play. After all, they are experts in the field. Right? Yes. Nonetheless, December 11, 2008 is a day that most financial experts will remember with distain. It was the day that the former chairperson of the NASDAQ stock market exchange was arrested for running a huge Ponzi scheme. To this day, the full financial impact has yet to be felt. It is estimated that hundreds of thousands of Americans lost most, if not all of their retirement. Many of these individuals are just like you. They relied on a qualified financial expert, who advised banking on Madoff's investment firm.

As of now, there is no connection between many of the financial experts and brokerage firms that directed their clients to Bernard Madoff. Many are victims too. It just goes to show that even the best financial experts can be wrong. What does that mean for you? Never trusts their advice alone. Do your own research first.

If you want to invest in stocks, go right ahead. If you want to pick the brain of a financial expert, ask them for stock recommendations. Return home and use the internet. Search the past years of movement on the stock market, search for outlook projections for each company, and so forth. If, at any time, you find a company that appears too risky, follow your best judgment. Opt to invest in a different stock. Better yet, most individuals have the option to choose between stocks and bonds. Ensure your financial security by opting for a mixture of both. If one suffers, you still have the other to fall back on.

As previously stated, some young adults are able to have their 401k plan arranged and managed by a company financial expert or a hired third party expert. If you were one of those individuals years go, look at your records. You should get quarterly or yearly statements in the mail and have a phone number or a website to access this information. It is important to look at the big picture. Don't just look at the money you have in your retirement account. Look at how much you have gained or lost over the past year.

Most experts do not recommended jumping ship just yet. The stock market has been in a downward spiral all year. It has all but hit rock bottom. Many claim you can't go anywhere else but up. With that said, get the ticker for each of your stocks. Find the company name and research it online. Is there a rumbling the company is heading for disaster? Consider trading. Just because a stock was profitable 10 years ago when your financial advisor selected it for you, it does not mean it still it.

Regardless of whether you have been contributing to and investing in your 401k for years or if you are just getting started, be prepared. Take the advice of a financial expert, but do your own research too. The internet, the news, and investment magazines can provide you with the insight needed to get the most from your retirement fund.

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Articles
401k Cash Outs versus 401k Loans

401k: Don't Put All Your Eggs in One Basket

401k Early Withdrawals: Are They Worth it?

401k Investments: Should You Choose or Let a Professional?

401K Investments: Wait or Make the Change?

401k Plans and Stocks: The Importance of Diversification

401k Stocks: Should You Pull Out Because of the Bad Economy

401k Stocks: Using the Internet as a Research Tool

401k: Where to Invest Your Money

Changing Jobs: What to Do With Your 401K

Don't Have a 401k: Get One Now

Dos and Don'ts of 401k Investing

How and Why to Monitor Your 401k

How to Diversify Stocks in Your 401k

How to Enroll in a 401k Program

Questions to Ask About 401Ks

Should You Take a 401k Loan?

The Pros and Cons of 401k Loans

Tips for Doing 401k Rollovers

Tips for Waiting Out the Poor Stock Market

Tips to Avoid Tapping Into Your 401k

Tips to Invest Your 401k

Why You Should Invest in the Stock Market Now

Why Your 401K is Important

Your 401k and Early Retirement

 

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This site is a common sense guide to 401k Investments: Should You Choose or Let a Professional?. In practical advice websites, like anything else in life, there are no guarantees of income made. Readers are cautioned to reply on their own judgment about their individual circumstances to act accordingly.

This site is not intended for use as a source of legal, business, accounting or financial advice. All readers are advised to seek services of competent professionals in legal, business, accounting, and finance field.

Any perceived slights of specific people or organizations are unintentional.

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