by Catherine Rein
(last updated April 15, 2009)
I remember my first job out of college and how difficult it was trying to get up to speed on the investment options related to 401k planning. Having a plan for what to invest in and in what amounts is vital for long term 401k planning.
401k plans have been hard hit in recent months and it can be scary trying to determine what to do next. The acronym, DABL, will help you remember a strategy for your 401k investments. D stands for Diversification, A for Allocation, B for Buy and Hold and L stands for Long Term perspective.
Another way to think about allocation is to set any money you need in the next year away in cash. After that, any money you need in the next two to five years should be in a safe fixed-income investment, such as CDs or bonds. Any money you don't need in the next five to 10 years you should look at investing in the stock market.
If you are feeling the pain of the current market down turn, it can be tempting to turn away from your 401k. Stay the course and keep in mind the benefits of 401k investing, including tax benefits and employer match contributions.
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