5

I'm helping a friend roll over his 401K into an IRA. How can I advise him as he selects what to invest his money in? Factors I know to consider:

  • Rate of return over 1, 3, 5, and 10 years (and Morningstar rating, yes or no?)
  • Expense ratio
  • Risk factors such as R squared

I realize there are appropriate asset allocations for each stage between bonds and stocks, etc. What else should my friend consider?

justkt
  • 4,124
  • 23
  • 33

1 Answers1

3

Another aspect to consider is the proper asset allocation for his risk level. You shouldn't recommend your friend to be 100% in developing foriegn markets unless they're really risk tolerant (and even then, its probably not the best way to get good returns).

There are numerous other posts about asset allocation as linked here.

Community
  • 1
CrimsonX
  • 3,397
  • 1
  • 28
  • 29