The Frugal Fiduciary Small Business 401(k) Blog
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To meet retirement goals as affordably as possible, 401(k) participants must do three basic things – save early and often, keep account fees to a minimum, and invest appropriately. To invest appropriately, participants must construct - and maintain – an investment portfolio that includes a diversified mix of investments based on their time horizon (time to retirement) and risk tolerance. An appropriate portfolio balances the participant’s growth potential with risk of losses. Striking this balance is important. Otherwise, a participant could miss out on returns by investing too conservatively when young or sustain unrecoverable losses by investing too aggressively when older.