Using Asset Allocation in your 401k Planning Strategy

Using Asset Allocation in your 401k Planning Strategy

How should I divide my 401k Investments?

Here's a quick quiz.

Which strategy is more likely to help you reach your retirement goals: Finding the next hot fund about to rally and investing everything in it, or splitting your money among carefully selected funds, some of which don't even appear to be winners? If you answered the latter, you probably have a good idea of what asset allocation is about. If you answered "finding the hot fund," you need to pay especially close attention to this article.

Asset allocation is a strategy used by long-term savers to spread their money over several investment classes. Its goal is to maximize returns for a given risk level. It's not an exciting strategy, but it has a good track record of helping savers reach their goals.

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