401k Best Investment Strategy For 2010 & Beyond

Your 401k best investment strategy for 2010 and beyond depends on the investment options in your 401k plan. Regardless, with a sound investment strategy any 401k investor can be a winner. Few people understand investment strategy or their investment options, so here we make it simple for you.

Millions of investors lost money in the “lost decade” of 2000 through 2009. It was a tough time to invest. Without a simple yet best investment strategy in 2010 and beyond, investor losses could continue to pound the uninformed 401k investor in the future. So, let’s start on page one and put together a sound investment strategy for people who know little about investments and investing who invest in a 401k plan.

First, look at the 401k investment options AND features available to you. If your plan offers TARGET funds, a safe STABLE ACCOUNT, and a REBALANCE feature you’ve got it made. If not, you’ll need to work a little harder to maintain a balanced investment portfolio… the secret to long term investing success. We assume here that you want to be a moderate or middle-of-the-road investor. In other words, you want to put your money to work to make a better return without taking much risk.

Let’s start with the easy way: your plan has target (retirement) funds, a stable account that is safe and pays interest, and a rebalance feature. First pick your target fund. For example, if you plan to retire in about the year 2040 pick target fund 2040; or target fund 2020 if that’s when you expect to retire. Now set things up as follows: