If you do a quick Google search for “how to select your 401k investments?” You get a mind-numbing amount of results. Since nobody ever goes to Page 2 of Google, I decide to review page one’s results and summarize the similar ideas in all the articles.
The overwhelming factors came back to three recurring themes, Risk, Fees, and Time Horizon. All three are not unexpected, but how you evaluate your risk tolerance is important. Overestimate it, and you could leave yourself very upset. Underestimate it, and you could find yourself missing out.
Fees are always important, but you can not let yourself be convinced the low cost means it is better than something with a higher cost. Total return after fees is something you have to consider.
Finally, the time horizon is important as well. The phrase time in the market, not timing the market. There is a great chart showing why holding investments for the long term through ups and downs positively affects the probability of success. You still have to pick good investments, but the longer you hold them, the link show, the better your odds of success.
After reviewing some of the factors to consider when selecting 401(k) investments, I will dive into the different selections in the PG&E 401(k). You have many choices when selecting 401(k) investments inside the PG&E 401(k). There are Target Date Funds, Equity Funds, Bonds Funds & the PG&E Stock Fund. There is one more, the Self Directed BrokerageLink option, which opens the door to a much bigger 401(k) investment window.
Listen to this episode to better understand what is available inside the PG&E 401(k). You can always ask a question on the website under the Ask A Questions tab, whether it is about 401(k) investments or anything related to your personal financial goals.