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What Kind of 401k Investment Opportunities Exist?

It is important to keep in mind that each type of investment has its own degree of certainty and uncertainty. Since all investments perform differently, one way to manage risks is to diversify your portfolio by investing in a blend of different types of assets.

 

Aggressive Growth Funds Funds are comprised of stocks with greater-than-average potential for growth. Such stocks might include start-up companies, smaller companies, or companies in high-risk industries.
Balanced Funds Also known as Life Style Funds or Asset Allocation Funds. Blending both stocks and bonds; these funds allow diversification with potentially lower risk.
Bonds Funds Bonds represent loans to Federal or local governments or to a corporation, with a promise to repay at a set interest rate at a predetermined amount of time.
Growth and Income Funds Such Funds invest in companies with strong growth potential that also have a solid record of paying dividends (income).
Growth Funds Investing in relatively stable and established companies, which may or may not pay dividends. These funds try to identify companies whose stock values are expected to increase.
International or Global Equity Funds International Funds invest in stocks outside the United States. While Global Equity Funds invest in both foreign and U.S. companies.
Money Market Funds Assets in these funds typically consist of U.S. Treasury Bills, Certificates of Deposit (CD's), and other commercial investments.
Mutual Funds These options pool money from many investors and can invest it in various securities such as stocks, bonds, and money market instruments, and are designed to help reduce, but not eliminate, risk.
Stable Value Funds Designed to provide consistent, predictable growth over the long term. Sometimes referred to as the fixed fund or guaranteed fund, these funds are typically backed by contracts issued by insurance companies. This option is generally considered low risk. Company Stock- By selecting your employer's stock you acquire an ownership interest in the company.
Stock Index Funds Funds attempt to mirror the performance of the stock market indexes, such as the SP 500.

 


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