Is a 401(k) a Good Investment?

Video Transcript

"My name's Phillip Beningoso, I'm an investment professional and I'm going to be discussing how to know if a 401k is a good investment. Many employers offer a choice of 401k plans usually a group of mutual funds all run by one mutual fund company. Now getting to know as much as you can about mutual funds or about investing is a very important part. This will make you feel more comfortable about investing just in general and about taking participating in a 401k plan. As you learn more, your strategy for allocating those assets might change. So you may be more conservative, feel uncomfortable about investing at first and then later on you may feel more comfortable and readjust that allocation. Let me take you through a few quick steps that can make this process easier for you. Step 1 read the 401k plan prospectus and brochures that are provided by your employer. 2 is to note the annual returns of each one of those types of investments. 3 is to understand the differences among the various funds, bond funds, stock funds, all that will be critically important to your risk tolerance. 4 decide what your investment goals and priorities are. 5 is get to know your own appetite for risk. 6 is to study different theories of the asset allocation model. 7, divide your contributions among funds in a way that reflects your goals and appetite for risk. 8 is to avoid putting all of your money in one or two funds. 9 to avoid putting it in stocks or any one particular stock. 10, make sure that you take full advantage of your employers contribution to your retirement plan. Maximizing your returns is the best thing that you could ever do. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. Any investments or strategies mentioned here may not be suitable for everyone. My name's Phillip Beningoso and I'm an investment professional."