Re: Way OT: investments in 401K

Posted by TimV on August 01, 2004 at 06:03:46 from (68.175.151.24):

In Reply to: Way OT: investments in 401K posted by Kurt (mi) on August 01, 2004 at 04:10:03:

Kurt: You're definitely on the right track. The most important decision you can make with regard to a 401(k) is to actually participate in it! With regard to specific funds, I never feel comfortable giving other people investment advice--there's too many variables, and investment advice is seldom one-size-fits-all. However, there IS one thing that I'll mention. Take a look at whether or not your employer offers an Index Fund. This is a mutual fund with no active management--it simply buys the same stocks that make up the index it tracks, in the same proportion. The most popular index to track is the S&P 500, but there are funds that track many other indices as well. Because there are no managers to pay, expense ratios are very low. Because of low expenses, your returns will very closely track those of the index. In an average year, index funds beat 80% of actively managed funds, and over time this number goes up to around 98%. Yes, you MAY manage to find one of the 2% of funds that beat the odds, but I'll put my money (and I have) in index funds.

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