The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing

URL:  http://boards.fool.com/is-it-time-to-move-my-403b-contributions-whats-24490636.aspx

Subject:  Re: 403b Investment Strategy Date:  8/20/2006  10:26 PM
Author:  Adenovir Number:  53256 of 75825

Is it time to move my 403b contributions? What's the best strategy for 403b contributions?

I think you're doing fine as long as you are not within 5-10 years of retirement. You are probably up a bit over the past several years. Large cap US stocks, which make up most of the S&P 500, have underperformed the market for some time. This means that they may outperform the market in the future (reversion to the mean).

Many "experts" think that we are in a "low return world" and I don't disagree. But paying for active management (which I think would involve fundamentally indexed funds) to increase returns hasn't worked well in the past and there no reason to think that "this time it's different".

Even if historical studies have demonstrated the benefits of fundamental weighting, once too many people adopt an investing strategy, it tends to underperform.

As for the "best" strategy, it really depends on your risk tolerance and time frame. You might want to consider some diversification into small caps and foreign stocks, but do some research first.

Adenovir
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us