No. of Recommendations: 0
Welcome dihanna55. We're glad you could join us.

The best way to check out the funds you are offered in your 501K is to check them out on Morningstar.com. You want to understand what class they are (value, growth, balanced, large cap, medium cap, small cap, index, bond, fixed income, etc, etc) and how they perform compared to other funds in the same class. You especially want funds that are consistently in the top half of the pack (3 stars or more on Morningstar.com).

You will also want to look at their costs. Loads, expense ratio, 12b-1 fees, etc. Recent changes in management are a negative. Consistent performance is a major plus. And as always compare them to an S&P 500 Index fund (VFINX from Vanguard is a great comparison standard). Index funds are usually least expensive. Most managed funds cost more. And many do not perform as well. So choose an index fund first and if you add others, make sure their performance justifies their higher cost.

Fools would usually select an S&P 500 Index Fund or a large cap (preferably growth) fund as the basic investment. That can be 100% of your investment at the ages you describe while you investigate the others. Some would use a total market fund instead if available.

Then for diversification some would add in an international funds, a growth fund, a small cap fund, or a REIT. So at least 50% in your base large cap or index fund and then the rest divided between up to three other funds, no more than 30% in any of these. But always, only if they are decent performers and have moderate costs.

Ask away if any of this requires explaining.

Good luck.
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