| Many people have chosen mutual funds as their | | | | Each life cycle fund has a target retirement date |
| primary investment vehicle for their retirement | | | | and every year the allocation is changed to take |
| funds. This is a far superior choice over things like | | | | into account people aging. This is extremely |
| day trading and a savings account. Personal | | | | convenient and cost-effective. |
| investors often get stuck at this step though | | | | If you want something more hands-on you should |
| because they are overwhelmed by the options. | | | | definitely do some research before proceeding. |
| Here are some things to think about. | | | | Beware of funds that have high fees (especially |
| First of, seriously consider a "life cycle" fund. Most | | | | front end loads). These expenses don't seem like |
| financial planners advise their clients to make their | | | | a lot but over time due to compound interest |
| portfolios more conservative as they age. After | | | | they can take a huge amount out of your |
| all, you don't want to risk a crash when you have | | | | investment returns. Educate yourself on the |
| an aggressive portfolio close to retirement age. | | | | various types of funds that are available. The two |
| This is a very good idea but readjusting your | | | | main kinds are "Growth" and "Value" and they |
| portfolio every few years can be a hassle (not to | | | | perform best in different investment climates. |
| mention expensive.) A solution around this are life | | | | International stocks can buffer your portfolio |
| cycle fund. The capital in these funds is allocated | | | | from any domestic turmoil. Diversification is key. |
| towards various stock and bond mutual funds. | | | | |