My Home School News!

Everyone wants the 401K maximum balance they can get, right? That would mean your 401K maximum contributions going up in value all of the time. Well, fat chance. Even though markets go up and down all the time, it’s seems more down lately.  What goes around comes around again and again, so hang in there. To smooth out the bumps and get the maximum 401K plan values you can follow these 7 steps : 

1. Diversify across the three major categories . What’s a category? The three major categories are cash, bonds, and stocks.
2. Diversify across asset classes . What’s an asset class? It is like large cap (capitalization), mid cap and small cap stock mutual funds which would be under your stock category.
3.  Asset styles such as growth, value, and balanced . Let’s say you have a stock category and you have a large cap stock fund in it. You could further diversify into a large cap value stock fund and a large cap growth stock fund.
4. Keep your costs low. Use only the lowest cost investments such as no-load mutual funds, index funds, or ETFs . Keep your trading costs to zero if possible.
5.  Stick with your asset allocation plan . What’s an asset allocation? It is the percentages that you put into each asset class. Say you want to put 60% into stock. You could put 20% into large cap, 20% into mid-cap and 20% into small cap. The higher the risk and the more volatility in your portfolio, the higher the amount you put into stocks .
6. Rebalance once a year . That means if you put 60% into stocks at the beginning of the year and it grows to 65% at the end of the year, take that 5% and add it to another class that is doing poorly. You will be constantly selling high and buying low. Guess what? Many people view this as limiting gains but you are actually making a lot of money .
7. Stick with it!.  No matter what Fox News or famous Dave or Suzee blogger tells you, if you keep moving in and out of funds, you are gambling which is not the right way to get maximum 401K values. 

Get the 401k maximum balance going for you right now by utilizing the 7 steps above, and watch the money pile up over time . -Fern Alix LaRocca CFP® Wealth Coach