Chapter 84. Resources

Wherever you are in your career, make your 401(k) plan the core of your investment portfolio. Do you have an investment portfolio? Can you describe what's in it? To many people the word "portfolio" itself is intimidating. All it really means, though, is a collection of assets—securities and other investments such as bonds, gold, art, and real estate. Build your portfolio in a coherent way with your 401(k) plan as the centerfold.

You probably own some investments. You may own a home. Perhaps you have some mutual funds. Or maybe you've invested money in one of your passions, like Inuit art or tribal instruments. These various assets and investments represent part of your balance sheet, but a true investment portfolio should be more than just a list of investments. Some thought should be given to how these investments fit together and work together as a team.

Unfortunately, most people don't spend enough time on that part. They buy mutual funds, stocks, and other investments haphazardly, based on tips from friends or recommendations from brokers. If they get a year-end bonus, they buy a fund, or perhaps they take a vacation! If it's April 15 and individual retirement account (IRA) contribution time, they buy another fund. Then they read that a hot fund is about to close to new members, and they buy it—to get in under the wire, which is usually a mistake in any case. What they end up with is a grabbag. How it will perform is anybody's guess. My guess is that it will ...

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